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A curated and categorised database of common questions regarding the law.


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11 What form of notice of termination must be given?

Unless the offense is a gross misconduct where dismissal without notice is possible, notice under the contract of employment must be given in writing.
12 What form of notice of termination must be given?

Unless the offense is a gross misconduct where dismissal without notice is possible, notice under the contract of employment must be given in writing.
13 What reviews are required before an employee is terminated (relations, management, legal, etc.)

It is advisable to set up a clear management structure, by reference to the disciplinary procedure, to govern what decisions may be made by what level of management. With large organizations, it may be advisable for a central personnel function to be involved in the decision to dismiss or to be a source of information as to past practice to ensure consistency of treatment in the organization. It is also recommended that the decision be reviewed by management at a level at least one level higher than the dismissed employee or the employees conducting the disciplinary procedure.
14 What reviews are required before an employee is terminated (relations, management, legal, etc.)

It is advisable to set up a clear management structure, by reference to the disciplinary procedure, to govern what decisions may be made by what level of management. With large organizations, it may be advisable for a central personnel function to be involved in the decision to dismiss or to be a source of information as to past practice to ensure consistency of treatment in the organization. It is also recommended that the decision be reviewed by management at a level at least one level higher than the dismissed employee or the employees conducting the disciplinary procedure.
15 Is it possible to reach a termination agreement that can preclude court litigation? If so, what are the legal requirements for an effective release of employment claims?

A binding agreement minimising the possible success of a claim for breach of contract can be reached by a contract between the employer and employee. This need not be in any particular form, needing simply to meet the normal contractual requirements of Indian law of there being an offer and acceptance of such in writing. An effective method of precluding any claims by the employee is as part of the agreement to prevail upon the employee to treat this agreement as a voluntary cessation of employment on terms and conditions agreed in the contract and obtain this in writing from the employee. However, no contract can preclude the employee from going to court as on a worst case basis, the employee can go to court claiming the contract was signed under duress. Thus, it is only possible to minimise the chances of an employees success in such a case with a watertight agreement.
16 Is it possible to reach a termination agreement that can preclude court litigation? If so, what are the legal requirements for an effective release of employment claims?

A binding agreement minimising the possible success of a claim for breach of contract can be reached by a contract between the employer and employee. This need not be in any particular form, needing simply to meet the normal contractual requirements of Indian law of there being an offer and acceptance of such in writing. An effective method of precluding any claims by the employee is as part of the agreement to prevail upon the employee to treat this agreement as a voluntary cessation of employment on terms and conditions agreed in the contract and obtain this in writing from the employee. However, no contract can preclude the employee from going to court as on a worst case basis, the employee can go to court claiming the contract was signed under duress. Thus, it is only possible to minimise the chances of an employees success in such a case with a watertight agreement.
17 What are the legal consequences if a termination is not handled properly? What are the potential penalties for a wrongful termination?

A union may legally challenge a termination by raising an industrial dispute in the appropriate forum. Individual employees may also approach a labor court to challenge a termination order.
The potential penalties for a wrongful termination in a labor court are
i) reinstatement of the wronged employee with full seniority and benefits
ii) full back wages for the period he was wrongfully terminated.
In case of a civil court, the employer is liable to pay compensation for damages suffered by the employee due to wrongful termination. There are no guidelines for such awards which are left to the discretion of the judge.
18 What are the legal consequences if a termination is not handled properly? What are the potential penalties for a wrongful termination?

A union may legally challenge a termination by raising an industrial dispute in the appropriate forum. Individual employees may also approach a labor court to challenge a termination order.
The potential penalties for a wrongful termination in a labor court are
i) reinstatement of the wronged employee with full seniority and benefits
ii) full back wages for the period he was wrongfully terminated.
In case of a civil court, the employer is liable to pay compensation for damages suffered by the employee due to wrongful termination. There are no guidelines for such awards which are left to the discretion of the judge.
19 What circumstances will justify group layoff? Can there be a collective layoff due to business restructuring even though a negative economic situation cannot be demonstrated?

, there are also provisions in the law dealing with group retrenchments in case of transfer of an undertaking or in case of closure of part or the whole of an undertaking. It is to be noted that under the Industrial Disputes Act, the term ‘lay off’ refers to a temporary laying off of one or more workmen and the term as applicable under this context is ‘retrenchment’. While retrenchment is possible under law, in practice Indian Employers or Multinational Companies operating in India have found it extremely difficult to put this law into practice due to two reasons: a) Industrial unrest and unions obtaining injunctions from courts leading to lengthy litigation with no certainty of success at the end and b) Requirement of permission from the government which, in keeping with the ‘idealistic socialism’ framework of the constitution takes a lenient view of the employee’s perspective and results in the lack of a suitable exit policy. Thus, although a negative economic situation need not be demonstrated, industries find it difficult to retrench groups of employees even in case of negative economic situations.
20 What circumstances will justify group layoff? Can there be a collective layoff due to business restructuring even though a negative economic situation cannot be demonstrated?

, there are also provisions in the law dealing with group retrenchments in case of transfer of an undertaking or in case of closure of part or the whole of an undertaking. It is to be noted that under the Industrial Disputes Act, the term ‘lay off’ refers to a temporary laying off of one or more workmen and the term as applicable under this context is ‘retrenchment’. While retrenchment is possible under law, in practice Indian Employers or Multinational Companies operating in India have found it extremely difficult to put this law into practice due to two reasons: a) Industrial unrest and unions obtaining injunctions from courts leading to lengthy litigation with no certainty of success at the end and b) Requirement of permission from the government which, in keeping with the ‘idealistic socialism’ framework of the constitution takes a lenient view of the employee’s perspective and results in the lack of a suitable exit policy. Thus, although a negative economic situation need not be demonstrated, industries find it difficult to retrench groups of employees even in case of negative economic situations.
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