Ours is a private medical college attached to a teaching hospital. We have our own certified standing orders. There is a provision in our certified standing orders where the service of a permanent employee may be terminated by giving one month prior notice or pay one month's salary in lieu of notice, by either side. Can we do so? Is the provision legally valid? Please let me know.
From India, Guntur
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17From India, Guntur
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In the outset, I would like to say that there are two kinds of Standing Orders (not as per law but in practice), i.e., one is genuine standing orders and standing order prepared and even certified just for namesake so that they can engage trainees! The second type of standing orders will be used only to show the PF authorities that the trainees being engaged are apprentices as per standing orders and hence exempted from PF. They will also give a citation of the Campco case to satisfy the PF officers. Although they will show the case citation of Ramnarayan Textile Mills in reply to establish which trainees can be exempted and why all trainees of any number cannot be treated as exempted trainees.
We will consider that this case comes under the first category of Standing Orders. Normally, the Standing Orders cover the employees coming under the definition of a workman in the Industrial Disputes Act, and the certification of the same would be done only in consultation with their trade union. As such, if there is a clause that the service of a permanent worker can be terminated just by giving one-month notice, the same will be binding on both the worker and the employer. Hence, there is no legal issue for terminating the service after giving one month's notice.
Madhu T K
From India, Kannur
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We will consider that this case comes under the first category of Standing Orders. Normally, the Standing Orders cover the employees coming under the definition of a workman in the Industrial Disputes Act, and the certification of the same would be done only in consultation with their trade union. As such, if there is a clause that the service of a permanent worker can be terminated just by giving one-month notice, the same will be binding on both the worker and the employer. Hence, there is no legal issue for terminating the service after giving one month's notice.
Madhu T K
From India, Kannur
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Dear Lokanadha Babu,
In continuation of the opinion by Shri T K Madhu, I would like to mention that it would have been better if you had reproduced the clause of standing orders. The notice of termination, if any, has to be supported by the reason, and the reason has to be supported by records/evidence, as it is likely to be challenged.
Shailesh Parikh
99 98 97 10 65
Vadodara
From India, Mumbai
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In continuation of the opinion by Shri T K Madhu, I would like to mention that it would have been better if you had reproduced the clause of standing orders. The notice of termination, if any, has to be supported by the reason, and the reason has to be supported by records/evidence, as it is likely to be challenged.
Shailesh Parikh
99 98 97 10 65
Vadodara
From India, Mumbai
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In respect of a discharge simpliciter, the clauses of the Standing Order are sufficient. Even without any reasons, an employee can be terminated following the contract of employment or standing orders. The only difference is with regard to workers coming under the purview of the ID Act. Since the standing orders are applicable to workers and have been accepted by them before certification, it is not open for defense by the workers as well.
From India, Kannur
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From India, Kannur
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I agree with the indirect observation of our friend Mr. Madhu that the attempt of the poster to dispense with the services of the permanent employee by giving one month's notice as per the particular clause of termination of employment in the certified Standing Orders amounts to "discharge simpliciter". No doubt that discharge simpliciter, per se, is not punitive in character and in fact, has no adverse consequences as the employee would be entitled to all service benefits. Even then, I am quite unable to lend support to the proposed termination by giving one month's notice as per the clause of the Standing Orders in view of the fact that a catena of cases decided by the Supreme Court categorically explain that discharging an employee simply by giving notice or paying in lieu of notice, though as per the terms of the contract of employment, is unconstitutional as it violates Art.14 of the constitution which guarantees "equality before Law" to every citizen.
Of course, the provision in the contract of employment for unilateral termination of employment by the employer or employee by giving a notice of a certain period may be valid for employment could never be an endless contract or an everlasting bonded slavery. However, certain aspects of employment like the classification of employees such as temporary, permanent, etc., coupled with the Principles of Natural Justice would act as a deterrent when an employer decides to abruptly use such an enabling clause to deprive the job of a permanent employee without any reason. If it is allowed, it will end up in unquestionable hire and fire according to the whims and fancies of the employer who is certainly a more powerful party to the contract of employment.
In discharge simpliciter, the employer has unguided and unrestricted power to terminate the services of the employee by giving notice or granting pay in lieu thereof, without giving any opportunity of hearing to the employee. That's why the Supreme Court opined in S.S. Mulley vs JRD Tata and others [1979(2) SLR 438] that the exercise of such power by the employer violates the principle of natural justice and is against the spirit of Art.14 of the Constitution. In the Central Inland Water Transport Corporation Ltd case [1986(2) LLN 382], the Supreme Court held such a provision in the service rules is against public policy as per sec.23 of the Indian Contract Act, 1872.
From India, Salem
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Of course, the provision in the contract of employment for unilateral termination of employment by the employer or employee by giving a notice of a certain period may be valid for employment could never be an endless contract or an everlasting bonded slavery. However, certain aspects of employment like the classification of employees such as temporary, permanent, etc., coupled with the Principles of Natural Justice would act as a deterrent when an employer decides to abruptly use such an enabling clause to deprive the job of a permanent employee without any reason. If it is allowed, it will end up in unquestionable hire and fire according to the whims and fancies of the employer who is certainly a more powerful party to the contract of employment.
In discharge simpliciter, the employer has unguided and unrestricted power to terminate the services of the employee by giving notice or granting pay in lieu thereof, without giving any opportunity of hearing to the employee. That's why the Supreme Court opined in S.S. Mulley vs JRD Tata and others [1979(2) SLR 438] that the exercise of such power by the employer violates the principle of natural justice and is against the spirit of Art.14 of the Constitution. In the Central Inland Water Transport Corporation Ltd case [1986(2) LLN 382], the Supreme Court held such a provision in the service rules is against public policy as per sec.23 of the Indian Contract Act, 1872.
From India, Salem
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