Dear Sir,
As per the recent management decision, we are required to discontinue the services of certain employees whose tenure has exceeded five years.
In this regard, I would like to seek your advice on the most appropriate and compliant approach to implement this decision, ensuring minimal impact on the affected employees. We aim to handle the process with fairness, transparency, and compassion.
Could you kindly suggest the best course of action that aligns with labor laws and company policies, while also supporting the employees during this transition?
Looking forward to your valuable guidance.
From India, Mohali
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3As per the recent management decision, we are required to discontinue the services of certain employees whose tenure has exceeded five years.
In this regard, I would like to seek your advice on the most appropriate and compliant approach to implement this decision, ensuring minimal impact on the affected employees. We aim to handle the process with fairness, transparency, and compassion.
Could you kindly suggest the best course of action that aligns with labor laws and company policies, while also supporting the employees during this transition?
Looking forward to your valuable guidance.
From India, Mohali
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Implementing a termination process, especially for long-tenured employees, requires careful planning and execution to ensure compliance with labor laws and to minimize the impact on the affected employees. Here's a step-by-step guide:
1. Review Labor Laws: Familiarize yourself with the labor laws applicable in Mohali, India. Ensure that your termination process complies with these laws to avoid any legal complications.
2. Consult Legal Counsel: It's advisable to consult with a legal expert to ensure that your termination process is legally sound and doesn't expose your company to potential lawsuits.
3. Develop a Clear Communication Plan: Transparency is key during this process. Develop a clear communication plan detailing why the terminations are happening, how decisions were made, and what support the company will provide to affected employees.
4. Provide Adequate Notice: As per the Industrial Disputes Act, 1947, employers in India are required to provide a notice period or pay in lieu of notice to employees being terminated. Ensure you comply with this requirement.
5. Offer Severance Packages: Consider offering severance packages to the affected employees. This could include compensation, outplacement services, and assistance in finding new employment.
6. Conduct Exit Interviews: Conduct exit interviews to provide closure for the employees and to gather feedback that could help improve your organization.
7. Support Remaining Employees: Communicate effectively with the remaining employees to alleviate any concerns and maintain morale.
Remember, treating your employees with respect and compassion during this difficult process can go a long way in maintaining your company's reputation.
From India, Gurugram
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1. Review Labor Laws: Familiarize yourself with the labor laws applicable in Mohali, India. Ensure that your termination process complies with these laws to avoid any legal complications.
2. Consult Legal Counsel: It's advisable to consult with a legal expert to ensure that your termination process is legally sound and doesn't expose your company to potential lawsuits.
3. Develop a Clear Communication Plan: Transparency is key during this process. Develop a clear communication plan detailing why the terminations are happening, how decisions were made, and what support the company will provide to affected employees.
4. Provide Adequate Notice: As per the Industrial Disputes Act, 1947, employers in India are required to provide a notice period or pay in lieu of notice to employees being terminated. Ensure you comply with this requirement.
5. Offer Severance Packages: Consider offering severance packages to the affected employees. This could include compensation, outplacement services, and assistance in finding new employment.
6. Conduct Exit Interviews: Conduct exit interviews to provide closure for the employees and to gather feedback that could help improve your organization.
7. Support Remaining Employees: Communicate effectively with the remaining employees to alleviate any concerns and maintain morale.
Remember, treating your employees with respect and compassion during this difficult process can go a long way in maintaining your company's reputation.
From India, Gurugram
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Dear Sir,
please note the following :-
1. if you are terminating the services with immediate effect then you will have to pay notice period as per service rules for all concerned employees.
2. Retrenchment compensation at least @ 15 days salary per completed year as per labour law. if you can give more considering the current situation you may extend the same to one month for completed years of service
3. Gratuity as per Gratuity Act
4. unpaid wages/salary
5. yearly benefits as mentioned in CTC (LTA, Leave encashment, unpaid bonus)
*** As far as point number 01 above, better to talk to them and convince them to give their resignation so that, there will not be major unrest and it will help to settle with them amicably.
Thanks
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please note the following :-
1. if you are terminating the services with immediate effect then you will have to pay notice period as per service rules for all concerned employees.
2. Retrenchment compensation at least @ 15 days salary per completed year as per labour law. if you can give more considering the current situation you may extend the same to one month for completed years of service
3. Gratuity as per Gratuity Act
4. unpaid wages/salary
5. yearly benefits as mentioned in CTC (LTA, Leave encashment, unpaid bonus)
*** As far as point number 01 above, better to talk to them and convince them to give their resignation so that, there will not be major unrest and it will help to settle with them amicably.
Thanks
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Dear Raj Kumar Chauhan,
Your company wants to discontinue the services of certain employees whose tenure has exceeded five years. But why does your company wish to do that? What is the rationale behind such a decision? Is poor performance the issue?
Managing employee retention is always a challenge for most companies. A large number of articles are published in the HR magazines or forums on 'retention strategies'. By retaining the employees, companies wish to capitalise on their knowledge and the skills the employees acquire during the job. However, your company's case is opposite.
If you could provide us with the context of your company's decision, it will help us to give appropriate suggestions.
Thanks,
Dinesh Divekar
From India, Bangalore
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Your company wants to discontinue the services of certain employees whose tenure has exceeded five years. But why does your company wish to do that? What is the rationale behind such a decision? Is poor performance the issue?
Managing employee retention is always a challenge for most companies. A large number of articles are published in the HR magazines or forums on 'retention strategies'. By retaining the employees, companies wish to capitalise on their knowledge and the skills the employees acquire during the job. However, your company's case is opposite.
If you could provide us with the context of your company's decision, it will help us to give appropriate suggestions.
Thanks,
Dinesh Divekar
From India, Bangalore
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(Fact Checked)-The user's reply is a request for more information and does not provide any factual information that can be verified or corrected. Therefore, no output is required. (1 Acknowledge point)
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Dear Raj,
Your question depending upon below mentioned to Points you can refer which one is familiar to you
Depending upon Business existence's if you wanted to terminate long term employees make sure below mentioned points
1. In Appointment letter termination clause you should have to communicate with employee saying
Notice of Termination
a. On your being confirmed in our service, in the event of termination of your services by the Management or resignation
by you, either party will required to give two months’ notice or salary in lieu of notice and either party is not bound to give
reasons therefor.
b. Upon the termination of your employment or resignation, you will return all papers and Documents of the company
which may at that time be in your possession relating to the business or affairs of the company or any of its associates and
you will not retain any copies of extracts therefore. You will also return any property of the company in your possession.
also
Policies may be subject to changes based on Business requirement and Management decisions
By following your appointment letter which you can decide the procedure. But you have to settle Full and final settlement along with all Exit formalities with transparency.
if employee Poor performance or any other situations as raised by employee
you should required to communicate with them about their GAPS from actuals based on prior intimation which was mentioned in appointment letter you can take further termination procedure .make sure all records are maintained properly and need to kept safely for future reference.
if it is Employee
From India, Bengaluru
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Your question depending upon below mentioned to Points you can refer which one is familiar to you
Depending upon Business existence's if you wanted to terminate long term employees make sure below mentioned points
1. In Appointment letter termination clause you should have to communicate with employee saying
Notice of Termination
a. On your being confirmed in our service, in the event of termination of your services by the Management or resignation
by you, either party will required to give two months’ notice or salary in lieu of notice and either party is not bound to give
reasons therefor.
b. Upon the termination of your employment or resignation, you will return all papers and Documents of the company
which may at that time be in your possession relating to the business or affairs of the company or any of its associates and
you will not retain any copies of extracts therefore. You will also return any property of the company in your possession.
also
Policies may be subject to changes based on Business requirement and Management decisions
By following your appointment letter which you can decide the procedure. But you have to settle Full and final settlement along with all Exit formalities with transparency.
if employee Poor performance or any other situations as raised by employee
you should required to communicate with them about their GAPS from actuals based on prior intimation which was mentioned in appointment letter you can take further termination procedure .make sure all records are maintained properly and need to kept safely for future reference.
if it is Employee
From India, Bengaluru
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(Fact Checked)-Good advice on adhering to the termination clause in the appointment letter and conducting full and final settlements transparently. It's also crucial to maintain all records for future reference. (1 Acknowledge point)
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The decision begs rationale. Certainly, there could be no legal termination. Such an action would be arbitrary and unsustainable in law.
From India, Kochi
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From India, Kochi
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Dear Poster,
You know better,why do want to retrench the employees rendered services more than five years.
1. You can terminate on ground of appointment clauses leads to termination by notice rendered by either parties.
2. At the same time you can not terminate a workman under the appointment conditions, if not aligned with the clauses of standing orders.
3. A. The termination can be by paying notice pay, retrenchment compensation as per the ID Act 1947,as these employees have rendered services 240days.
3.B. These employees needs to be paid Gratuity because have rendered services 5 years& more.
4. The employer can be exempted from paying retrenchment compensation in case of employees Resigned.
5. The unpaid wages, bonus and encashment of accrued leaves.
6. Discuss with employees for a smooth termination.
From India, Mumbai
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You know better,why do want to retrench the employees rendered services more than five years.
1. You can terminate on ground of appointment clauses leads to termination by notice rendered by either parties.
2. At the same time you can not terminate a workman under the appointment conditions, if not aligned with the clauses of standing orders.
3. A. The termination can be by paying notice pay, retrenchment compensation as per the ID Act 1947,as these employees have rendered services 240days.
3.B. These employees needs to be paid Gratuity because have rendered services 5 years& more.
4. The employer can be exempted from paying retrenchment compensation in case of employees Resigned.
5. The unpaid wages, bonus and encashment of accrued leaves.
6. Discuss with employees for a smooth termination.
From India, Mumbai
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(Fact Checked)-Your response is largely accurate, but it's important to remember that the Industrial Disputes Act, 1947, requires the employer to give one month's notice or pay in lieu thereof, and retrenchment compensation at the rate of 15 days' average pay for every completed year of continuous service. Also, gratuity is payable under the Payment of Gratuity Act, 1972, only if the employee has rendered continuous service for not less than five years. Keep up the good work! (1 Acknowledge point)
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I would like to add one more thing, that is, if your establishment has been employing more than 50 employees (naturally, it should be) then you have to move some legal papers as well. In the case where the number of employees is not more than 100, at least an intimation to the Labour Department that you are going to retrench (yes, it is retrenchment and not just termination) the employees mentioned in the schedule attached for reasons to specified in the notice. At the same time, if the number of employees exceed 100, you should wait for an approval from the Labour department before initiating retrenchment. Obviously, the reason for retrenchment should never be that 'the employees have worked for more than five years' !
In order to make it legally compliant, you should follow "last in first out" principle also. That is, it should be the last employee who joined a department who should be asked to go. Moreover, you cannot appoint another person in the place of the person who was terminated.
Please understand that it is not just paying compensation as per section 25F or 25N of the Industrial Disputes Act or paying gratuity as provided in the Payment of Gratuity Act, but there are some legal and business ethics. Of course, in respect of employees who are having managerial powers, you can have a tri partite agreement and implement whatever is decided by the management but in respect of others (employees who do not have any supervisory or managerial role) you have to follow the above legal formalities.
Very simple, you cannot terminate a worker only for the reason that he has worked for more than five years.
From India, Kannur
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In order to make it legally compliant, you should follow "last in first out" principle also. That is, it should be the last employee who joined a department who should be asked to go. Moreover, you cannot appoint another person in the place of the person who was terminated.
Please understand that it is not just paying compensation as per section 25F or 25N of the Industrial Disputes Act or paying gratuity as provided in the Payment of Gratuity Act, but there are some legal and business ethics. Of course, in respect of employees who are having managerial powers, you can have a tri partite agreement and implement whatever is decided by the management but in respect of others (employees who do not have any supervisory or managerial role) you have to follow the above legal formalities.
Very simple, you cannot terminate a worker only for the reason that he has worked for more than five years.
From India, Kannur
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(Fact Checked)-Your information is correct as per the Industrial Disputes Act, 1947, and the Payment of Gratuity Act, 1972. It's important to follow these guidelines for a fair process. (1 Acknowledge point)
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(Fact Checked)-Your advice is accurate and aligns with the Indian labor laws. Just a note, convincing employees to resign should be handled delicately to avoid legal issues. (1 Acknowledge point)