No matter how valid the reason is, firing an employee always puts the company in a sticky situation. Unless the circumstances compel the organization, we are all aware that companies don’t fire away their resources without a valid explanation. The decision to sack an individual who has been pragmatically involved across the company’s operations can certainly initiate the possibility of legal challenges. Much risk is involved if the employee has some contract and can go against the organization to take some legal actions. There are certain vital rules that the employer needs to ensure before terminating any resources which can return back as probable legal complicacies in future.
Legal Aspects of Firing an Employee
Being a concurrent subject in the Indian constitution, labor and employment regulation are governed at both the federal and state levels in India. The termination of employment is regulated by the Industrial Employment (Standing Orders) Act (IESA), 1946, the Industrial Disputes Act (IDA), 1947, the Shops and Establishments Act, which is implemented in most states with negligible differences. The application of employment laws across various states of the country differs with respect to the employer’s area of operation.
As per the structure of Indian labor laws, although there is no typical procedure to sack an employee in India, an employee may be fired according to terms and conditions mentioned in the individual labor contract signed between the employee and the employer. However, the terms may be correspondingly subjected to the country’s labor laws.
In cases where there is no specific labor contract, or the method of termination is not defined, the matter comes under the authority of the specific state’s labor legislation. The major reason behind this step is Indian federal law does not overtly require that employment contracts in written format.
Offering workers and employees with considerable protection, the courts as well as state and federal labor departments often hold on to a pro-worker attitude in employment termination disagreements. It is not unusual for employees who have been discharged from employment to exercise their right of appeal, or coordinate through trade unions to get what they rightfully deserve.
Rules To Consider Before Firing an Employee Without Any Specific Legal Hassle
- The Industrial Disputes Act, 1947 commands a 30- to 90-day notice period when firing “human resources.” In the case of manufacturing units such as plantations, and mines with more than 100 workingmen, ‘termination for convenience’ necessitates government approval; although in few other sectors, it requires only government notification.
- Following reasons cited by the India’s labor law justify termination for cause—wilful disobedience; burglary, scam, or deceitfulness; wilful impairment to or loss of employer’s goods; involvement in bribes or any illegal indulgence; absenteeism without consent for more than 10 days; routine late attendance; unsystematic behaviour during working hours; or customary inattention towards work.
- Employers that terminate the workforce for expediency must ascertain that the last person to join the organization in the same role is first made redundant because when such organizations start hiring for the same role, resources who were terminated for convenience should be provided with the opportunity to re-join the company.
- Before terminating an employee, who is pregnant or looking for maternity leave, companies must poise their accessibility against the risk associated with the provisions enlisted in the Maternity Benefit (Amendment) Act, 2017.