Termination and Resignation of Employees as per Indian Employment Law

Termination is never an easy task. Unless conducted the right way, it can lead to litigation, industrial relations problems and bitterness. It is therefore of utmost importance, that the Human Resource Department of an establishment adopt a waterproof strategy for terminating its employees so as to avoiding litigation and Industrial relations trouble, yet at the same time, defend itself properly in the court of law and stay under the umbrella of law.

The Model Standing Orders under the Industrial Employment (Standing Orders) Act 1946 lays down the following sequence in which termination of a Workman may be carried out –

I. Issuance of Charge sheet –

  • The Charge sheet must state in detail the facts and circumstances of the employment misconduct committed.
  • Must contain relevant heads or categories of misconduct under which the workman is charged. These will be in the Certified Standing Orders of the Factory or establishment. If there are no Certified Stranding Orders then Model Standing Orders shall apply.
  • The charge sheet has to be served upon the workman personally or sent to his residential address.

II. Issuance of Notice of Enquiry –

  • Law never provides for seeking explanation in response to charge-sheet, however, it is always better to seek explanation so that conducting enquiry will be easier.

III. Domestic Enquiry –

  • Submit list of witnesses.
  • Provide all relevant documents to workers.
  • Ensure that worker is represented properly and is put to the notice that he has the right to be represented by the person of his choice and depending upon the circumstances more particularly if management is represented by a lawyer and the charge is serious which requires the help of legally trained persons.
  • Employer to lead evidence.
  • Offer witness for cross-examination.
  • Close evidence of management and allow worker to lead his evidence.
  • Evidence of the worker.
  • Written submission of both the sides.
  • Submission of enquiry report.

IV. Enquiry Report –

  • If the enquiry officer holds the worker guilty then show cause notice is required to be issued indicating the nature of proposed punishment along with copy of the report of enquiry officer. \
  • Reasonable opportunity is required to be given to the worker to offer his comments on the same.
  • On receipt of explanation to show cause notice or without explanation if the worker fails to give any explanation, the management can decide upon the disciplinary action as provided in the standing orders if applicable/applicable laws, rules and service condition.

Factors to be considered while giving punishment of termination:

The courts in India have termed the punishment of termination as an “economic death”. While carrying out disciplinary action against a worker or giving termination, gravity of the misconduct and past record of the employee shall have to be seen.

Consideration of past record is of paramount importance as failure to consider past record may allow courts to interfere with termination. Gravity of the misconduct is always examined by the courts apart from the nature of misconduct on the basis of past record and length of service. If his past record is clean and the worker has put in long years of service, the court may set aside termination and give relief of reinstatement with some back wages and continuation of employment.

Now, Termination or Suspension may be carried out without conducting Domestic Enquiry but only in the rarest of rare cases. Find out more about what the law says on this issue here.