Indian laws classify employees in ‘workmen’ and ‘employee’ categories. A workman is provided various protective remedies under law and is entitled to certain statutory benefits which an employee may not be entitled to (depending on the terms of his contract of employment). Accordingly, an employee can usually be terminated on the basis of the terms of his employment contract (also known as a hire and fire rule). However, termination of a workman requires more compliance, adherence to processes and payment of retrenchment compensation to the terminated employee. It is therefore necessary to have legally correct termination / resignation procedures before firing employees. You address the following issues: a) termination without notice and its consequences; b) termination due to misconduct and how to go about it; c) terminating workmen in a legally correct manner; d) unfair dismal and what it means for an employer.
• Prevents employer-employee disputes.
• Categorizes an employee from a workman since majority lower-level IT personnel are workmen in India.
• Brings clarity from an employer – employee perspective.
• Prevents frivolous legal disputes.
Termination In cases where the employee voluntarily resigns or retires from employment, it is unlikely that there will be a dispute (unless there are elements of a breach being committed by the employee). In contrast, termination of employment by the employer often leads to a stand-off between an employee and employer which has all the ingredients for baking a potential dispute. Termination of employment due to misconduct, breach of the employment agreement including violation of restrictive covenants therein, is often escalated and settled through resort to courts. An important factor to be considered in a dispute relating to termination of employment by the employer is whether the employee being so terminated enjoys statutory protection of employment such as a “workman” as defined in the Industrial Disputes Act, 1947 (“IDA”) and/or protection under the state-specific labour laws such as the Shops and Establishments Act. The IDA also contains unfair labour practices on the part of the employer. If the employee does enjoy such protection, then before terminating the employment of such an employee for any of the above reasons, the employer would have to serve the employee with at least a 30 days’ notice or pay salary in lieu thereof. The procedure to be followed for termination due to ‘misconduct’ would involve framing of charges and issuance of a charge sheet, conducting an internal (domestic) enquiry by an unbiased inquiry officer, followed by issuance of a show cause notice. The process needs to be followed as per the principles of natural justice and the employee should be given an opportunity to submit his defence and call upon witnesses. Decision to terminate employment should be taken depending on the gravity of the misconduct on the part of the employee.

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