Hi all, I need your help. We are setting up our Indian office and are learning something about the working rules there. I wonder if someone could share my termination policy in Indian. In offer letter in other countries, we will normally write the following terms “Your employment may be terminated by either party without assigning any cause by giving one month’s notice or payment of one month base salary in lieu of notice.” We are not sure if this is in accordance with the Indian law. Is this illegal? Appreciate your advice. Best regards, Shirley
From China, Shanghai
From China, Shanghai
Dear Friend, The clause should be applicable for both parties ie., the employee can also leave the organization either paying one month basic salary or one month notice then this will be ok. You should also remove the word "without assigning any cause". Thanks and regards - kameswarao.
From India, Hyderabad
30From India, Hyderabad
The terms of the appointment order shall not circumvent the provisions of the Industrial Disputes Act and the Standing Orders of your company, if any. Therefore, whatever safe game you play about appointment order will not be maintainable if it is contrary to the rules of basic Acts. An employer is certainly free to terminate the services of employee(s) provided there is valid reasons. It should not be fabricated but real one. It should be taken as the last resort also. The termination policy should be dilute that if the employer wants to terminate services of employees, let the provisions relating to informing the government of the intention to retrench employees be followed and retrenchment compensation as prescribed under the ID Act paid to the respective employee. The law does not say that employer should retain a non performing employee but the employer has the right to fire him. But before doing so, give him an opportunity to improve his performance or try to relocate him by assigning some other task so that he could improve. If not found satisfactory, retrench him after giving prior notice and paying retrenchment compensation. It shall also be remembered that for an employee one year is more than sufficient to evaluate or appraise an employee and if you want to terminate him on the ground of non performance, do it immediately after you assess his performance. On the other hand, if you terminate services of an employee who has been with you for the last three or five years on the ground of non performance, it will be highly prejudicial and will be viewed as victimisation. Regards, Madhu.T.K
From India, Kannur
From India, Kannur
Dear To add to our Board Moderator.The Law is sinply understood like this. Special law for workmen guided by ID Act or Shops &Establishments Act .HereTermination is regulated by the Law. For Officers i.e Non Workmen it is regulated by Agreement/Contract .This is where your clause will come in. With Regards E-mail : 
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From India, Bangalore
From India, Bangalore
Thanks for inputs. One clarification from Rajan, Isn't all establishment covered either by ID or shops and establishment act. For example. How do you differentiate employees of an company registered in shops and establishment act.
From India, Delhi
From India, Delhi
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Termination Policy _Appointment Letter.jpg
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