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India: Termination of employment

Original and updating author: Kochhar & Co

Summary

  • Many statutory rules on termination of employment contracts apply only to employees defined as "workmen". With regard to employees other than workmen, legislation regulates some aspects of termination of such employees in shops and commercial establishments. (See General)
  • Employees defined as workmen, and all employees in shops and commercial establishments, are generally entitled to a statutory minimum notice period, except in the case of disciplinary dismissal. (See Notice periods)
  • Employees may generally be dismissed without notice on grounds of misconduct, but any such dismissal must be preceded by a disciplinary procedure. (See Disciplinary dismissal)
  • In the event of the "retrenchment" (that is, dismissal on grounds such as redundancy) of an employee defined as a "workman", the employer is required to give notice and reasons for the dismissal, pay compensation, and notify and, in some cases, obtain the authorisation of the public labour authorities. (See Retrenchment)
  • Employers are prohibited from dismissing employees who are on maternity leave, or receiving maternity or sickness benefits, while the dismissal of "workmen" on certain grounds is deemed an unlawful "unfair labour practice". (See Special dismissal protection and "unfair labour practices")
  • Employees in certain establishments are entitled to a statutory "gratuity" of 15 days' pay per year of service on termination of employment in some circumstances. (See Severance payments)
  • There is no statutory compulsory retirement age in the private sector. (See Retirement)
  • In certain establishments, employees defined as "workmen" are entitled to be provided with a service certificate on termination of employment. (See Service certificate)
  • Employees who believe that they have been unfairly dismissed may bring a court case or, in the case of "workmen", initiate an industrial dispute, seeking reinstatement and/or compensation. (See Unfair/unlawful dismissal)