Termination of employment is a sensitive area in the Indian workforce. Whether due to performance issues, redundancy or policy violations, it must be handled as per legal norms. Understanding the termination rules for employees in India is essential for both employers and employees to avoid legal hassles.

List of termination rules for employees in India

Here's a list of key rules you should be aware of when it comes to employee termination:

• Notice period: As per the Industrial Disputes Act of 1947, employers must provide a notice period of 30 days or salary instead of notice when terminating a permanent employee.
• Reasonable cause: Employers must have a justified reason for termination, such as misconduct, redundancy or poor performance.
• Employment contracts: The terms outlined in the employment contract play a big role in determining lawful termination.
• Payment of dues: Full and final settlement must include salary, gratuity, leave encashment and other earned benefits.
• Labour law on termination of employee: This law ensures workers are not dismissed unfairly and are given the right to be heard.
• Layoff rules in India: For temporary suspension of employment due to business issues, layoff rules apply. Compensation of 50% of basic wages plus dearness allowance is mandatory under the Industrial Disputes Act.

Rules for employee protection against dismissal

Indian law protects employees from arbitrary or unjust dismissal. Here are the key protections:

• Legal termination of employment: According to Indian labour laws, termination must follow proper procedure and cannot be sudden or without cause.
• Protection under the Industrial Disputes Act: Workmen employed for more than a year cannot be terminated without approval from the labour department.
• Anti-discrimination laws: Termination on grounds like caste, religion, gender or disability is illegal.
• Disciplinary actions: These should follow natural justice, including issuing a show-cause notice, conducting a fair inquiry and allowing the employee an opportunity to present their side.
• Documentation: All termination actions must be properly documented to ensure transparency and compliance.

Conclusion

With a comprehensive workmen compensation policy, employer can offer financial support to employees in case of work-related injuries or death. This also helps organisations stay compliant with the Employees’ Compensation Act, 1923. Similarly, employers need to follow different rules and regulations before terminating an employee.

Disclaimer: The information provided in this blog is for educational and informational purposes only. It is advised to verify the currency and relevance of the data and information before taking any major steps. Please read the sales brochure / policy wordings carefully for detailed information about on risk factors, terms, conditions and exclusions. ICICI Lombard is not liable for any inaccuracies or consequences resulting from the use of this outdated information.