Asked March 18, 2017

Employee termination rule

  • 1 Answer

I want to know more about the Employee Termination rule without any reason? What can the employee do with his benefits and salary?

Answer 1

According to the Industrial Disputes Act, 1947 a 30 to 90-day notice period need to be given to an employee (an employee whose role is not primarily supervisory, administrative or managerial). You are entitled to a final payment (salary, PF), which must be made within two days of the date of termination.  Deductions are permitted from an employee’s wages, but only for specified reasons (eg, on account of fines, deductions for damage to or loss of goods expressly entrusted to the employee and recovery of loans or advances). Deductions are generally permitted only up to 50% of the employee’s wages. 


An employer can terminate his employee only on the following grounds:

  • misconduct,
  • disobedience,
  • fraud,
  • misappropriation and
  • breach of contract
  • performance


If you think the act of the company is arbitrary then you can file a civil suit before a labour court of the company’s jurisdiction. You can contact the jurisdictional Labour commissioner and apprise him of the unfair trade practices of the company.

Each company has their own rules for termination. However a general procedure is:

  • Initially the management would serve you a Show Cause Notice giving some target date for you to reply.
  • Then if the reply is not satisfying, then the management will have to conduct an inquiry giving you an ample opportunity for you to defend and then based on the inquiry report, action will be taken.
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