Greetings!
We dismissed a staff member 2 months ago due to constant poor performance at the job. Several memos and emails were given about the poor work performance. This employee refused to acknowledge any memo and declined to accept a dismissal letter along with one month's salary compensation. During the dismissal, we showed her all the evidence of her poor work, which was hurting the company's reputation, money, and time.
Out of the blue, we received a letter from the labor department office asking us to attend a hearing to discuss her dismissal. She is an office staff member working in the sales department, appointed by the HR Manager with an appointment letter. We are surprised if office staff even fall under the labor category and approach the labor office. We have a hearing next week. Can someone please guide us on what to do in this case? Thank you.
From India, Ahmedabad
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We dismissed a staff member 2 months ago due to constant poor performance at the job. Several memos and emails were given about the poor work performance. This employee refused to acknowledge any memo and declined to accept a dismissal letter along with one month's salary compensation. During the dismissal, we showed her all the evidence of her poor work, which was hurting the company's reputation, money, and time.
Out of the blue, we received a letter from the labor department office asking us to attend a hearing to discuss her dismissal. She is an office staff member working in the sales department, appointed by the HR Manager with an appointment letter. We are surprised if office staff even fall under the labor category and approach the labor office. We have a hearing next week. Can someone please guide us on what to do in this case? Thank you.
From India, Ahmedabad
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Dear Prasad Shah,
Though you have written about the termination of the employee, you have not specified:
a) How many subordinates reported to the employee before the termination?
b) Before terminating the employee's services, did your company conduct the domestic enquiry? If yes, was it as per the laid down procedure?
Now, the employer has received a notice from the labour department. They can send a representative and show the pre-termination records. What the labour office says after verifying them remains to be seen.
Otherwise, the employer can just ignore the notice. Though this option is also fraught with risk, it is worth taking. In such a case, the labour officer may send one more notice. If that is also ignored, the only remedy the terminated employee will have is to file the suit in the labour court. If it happens and, if the employer receives the court's summons, then it has to be honored and cannot be ignored like the notice from the labour officer.
If you terminate the delinquent employee without conducting the domestic enquiry, then you have put yourself on a sticky wicket, which is a foregone conclusion from this post.
Thanks,
Dinesh Divekar
From India, Bangalore
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8032Though you have written about the termination of the employee, you have not specified:
a) How many subordinates reported to the employee before the termination?
b) Before terminating the employee's services, did your company conduct the domestic enquiry? If yes, was it as per the laid down procedure?
Now, the employer has received a notice from the labour department. They can send a representative and show the pre-termination records. What the labour office says after verifying them remains to be seen.
Otherwise, the employer can just ignore the notice. Though this option is also fraught with risk, it is worth taking. In such a case, the labour officer may send one more notice. If that is also ignored, the only remedy the terminated employee will have is to file the suit in the labour court. If it happens and, if the employer receives the court's summons, then it has to be honored and cannot be ignored like the notice from the labour officer.
If you terminate the delinquent employee without conducting the domestic enquiry, then you have put yourself on a sticky wicket, which is a foregone conclusion from this post.
Thanks,
Dinesh Divekar
From India, Bangalore
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Hi Prasad,
There is nothing to get panicked about. As Mr. Dinesh rightly observed, when someone raises an issue, please provide full details. This will help those who respond to properly interpret and give an appropriate response. We need to know whether the office is registered under the Shop Act or Factories Act. If it is under the Shop Act, he can still raise a dispute before the Labour Department claiming that the dismissal is unauthorized. Before that, his/her nature of duties needs to be examined. Whether he/she has any subordinates and whether he/she falls within the definition of a workman should be considered. If he/she was performing managerial duties, you can directly send the termination letter citing the clause in the appointment letter.
However, upon receiving a notice from the labour department, you can attend the first hearing and obtain a copy of the petition. Consult and prepare an appropriate reply statement to file on the next hearing date. If the conciliation fails, a failure report will be sent to the government, and the concerned individual may raise a dispute before the Labour Court. At that time, you can be represented through your counsel to defend the case. Do not worry and handle it appropriately.
Regards,
From India, Chennai
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There is nothing to get panicked about. As Mr. Dinesh rightly observed, when someone raises an issue, please provide full details. This will help those who respond to properly interpret and give an appropriate response. We need to know whether the office is registered under the Shop Act or Factories Act. If it is under the Shop Act, he can still raise a dispute before the Labour Department claiming that the dismissal is unauthorized. Before that, his/her nature of duties needs to be examined. Whether he/she has any subordinates and whether he/she falls within the definition of a workman should be considered. If he/she was performing managerial duties, you can directly send the termination letter citing the clause in the appointment letter.
However, upon receiving a notice from the labour department, you can attend the first hearing and obtain a copy of the petition. Consult and prepare an appropriate reply statement to file on the next hearing date. If the conciliation fails, a failure report will be sent to the government, and the concerned individual may raise a dispute before the Labour Court. At that time, you can be represented through your counsel to defend the case. Do not worry and handle it appropriately.
Regards,
From India, Chennai
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The office staff will also come under the category of workmen and fall under the scope of the Industrial Disputes Act. However, a person who has been supporting the sales team to achieve the sales target by and large will come under the category of employees with a purely administrative role. Though sales promotion employees of some industries fall under the scope of the Sales Promotion Employees (Conditions of Service) Act, not all salespersons will come under the said Act.
Regarding a letter from the Labor Department, I would say that the same is only a routine intimation. If you have enough proof to show that the employee was given opportunities to improve his performance, the question of reinstatement will not arise. Second, termination can be dismissal or termination simpliciter. If you have paid or are ready to pay notice pay as per the contract of employment or as per the ID Act, as the case may be, the same is enough. It is not necessary that in all cases, there should be a domestic inquiry before an employee is terminated. In Dr. Mrs. Sumati P Shere Vs. Union of India, what the Apex Court observed was that termination of an employee on poor performance should have been done after informing the employee concerned. In this case, the employee was appointed for a temporary/ad hoc period. At the same time, no officer will say that an employee who does not meet his day-to-day targets, spends more time on breaks, overstays intervals, or takes leave without intimation should be retained.
Therefore, what I feel is that you should attend the hearing and explain what exactly has taken place in the case of the said employee. Then instead of reinstatement, the officer will order payment of notice pay, which may be equal to one month's salary.
From India, Kannur
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Regarding a letter from the Labor Department, I would say that the same is only a routine intimation. If you have enough proof to show that the employee was given opportunities to improve his performance, the question of reinstatement will not arise. Second, termination can be dismissal or termination simpliciter. If you have paid or are ready to pay notice pay as per the contract of employment or as per the ID Act, as the case may be, the same is enough. It is not necessary that in all cases, there should be a domestic inquiry before an employee is terminated. In Dr. Mrs. Sumati P Shere Vs. Union of India, what the Apex Court observed was that termination of an employee on poor performance should have been done after informing the employee concerned. In this case, the employee was appointed for a temporary/ad hoc period. At the same time, no officer will say that an employee who does not meet his day-to-day targets, spends more time on breaks, overstays intervals, or takes leave without intimation should be retained.
Therefore, what I feel is that you should attend the hearing and explain what exactly has taken place in the case of the said employee. Then instead of reinstatement, the officer will order payment of notice pay, which may be equal to one month's salary.
From India, Kannur
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(Fact Checked)-Your response is correct. The Industrial Disputes Act does apply to office staff. Relevant documentation and proof of poor performance will be crucial during the hearing. Good advice! (1 Acknowledge point)
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Thank you everyone for giving a reply and valuable guidance. As more details are requested, I would like to state the following:
1. The employee joined our company on March 23 with a qualification of only HSC Pass. However, a VP in the company, on human grounds, provided a job to this underqualified woman to support her.
2. She was appointed as a Sales Assistant to make invoices, ewaybills, maintain sales records in Tally and Excel, arrange sales and dispatches in the absence of seniors, and also in charge of payment recoveries. She didn't have subordinates below her.
3. We are registered under the Factories Act, not the Shop Act, as we are a manufacturing unit and have this admin office in the city to handle the operations easily rather than far from the city.
4. For the last year, her performance constantly deteriorated. She also became a troublemaker, picking fights with other employees, not respecting even the Managing Director, making endless mistakes at work, ganging up with others to hurt the company's interests, and provoking others to go against management. In fact, her stance was that no matter whoever makes whatever mistake or indiscipline within the company, management should keep quiet, or she threatened to file false allegations or reveal company secrets. Once the HR Manager warned her not to make tea on her own in the office, she gave a two-page legal letter stating that HR was threatening her and she didn't feel safe inside the company, playing the victim card. We found that she even provoked other female employees that if any male employee scolded them for a work mistake, they could raise a workplace harassment complaint against them. She even brought her husband to the office once and made violent threats to the HR Manager.
Several memos were given to her, but she refused to accept any. An internal inquiry was conducted, and detailed emails about her misconduct, poor work performance, and false allegations were sent. But she didn't respond to the emails. Her anti-authority behavior spread wrong ideas among other staff. So finally, we had to terminate her, citing all the reasons for poor work performance. She didn't sign the letter, refused to accept one month's compensation, and left.
She got along with the CITU labor union, and CITU seems to have assured her that they would save her, and the company couldn't do anything to her. So her work and behavior both worsened by the day. We are certain that the next step is court summons only once labor office talks fail. We need to know how strong our case is. We don't understand what you meant by a domestic inquiry. Our HR manager sent enough memos, and we conducted an internal inquiry into her poor work and bad behavior. Other than that, did we miss anything that may go against us?
Sorry for the long message, but as some have asked, I didn't leave out any details this time hopefully. Please guide us, thank you.
From India, Ahmedabad
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1. The employee joined our company on March 23 with a qualification of only HSC Pass. However, a VP in the company, on human grounds, provided a job to this underqualified woman to support her.
2. She was appointed as a Sales Assistant to make invoices, ewaybills, maintain sales records in Tally and Excel, arrange sales and dispatches in the absence of seniors, and also in charge of payment recoveries. She didn't have subordinates below her.
3. We are registered under the Factories Act, not the Shop Act, as we are a manufacturing unit and have this admin office in the city to handle the operations easily rather than far from the city.
4. For the last year, her performance constantly deteriorated. She also became a troublemaker, picking fights with other employees, not respecting even the Managing Director, making endless mistakes at work, ganging up with others to hurt the company's interests, and provoking others to go against management. In fact, her stance was that no matter whoever makes whatever mistake or indiscipline within the company, management should keep quiet, or she threatened to file false allegations or reveal company secrets. Once the HR Manager warned her not to make tea on her own in the office, she gave a two-page legal letter stating that HR was threatening her and she didn't feel safe inside the company, playing the victim card. We found that she even provoked other female employees that if any male employee scolded them for a work mistake, they could raise a workplace harassment complaint against them. She even brought her husband to the office once and made violent threats to the HR Manager.
Several memos were given to her, but she refused to accept any. An internal inquiry was conducted, and detailed emails about her misconduct, poor work performance, and false allegations were sent. But she didn't respond to the emails. Her anti-authority behavior spread wrong ideas among other staff. So finally, we had to terminate her, citing all the reasons for poor work performance. She didn't sign the letter, refused to accept one month's compensation, and left.
She got along with the CITU labor union, and CITU seems to have assured her that they would save her, and the company couldn't do anything to her. So her work and behavior both worsened by the day. We are certain that the next step is court summons only once labor office talks fail. We need to know how strong our case is. We don't understand what you meant by a domestic inquiry. Our HR manager sent enough memos, and we conducted an internal inquiry into her poor work and bad behavior. Other than that, did we miss anything that may go against us?
Sorry for the long message, but as some have asked, I didn't leave out any details this time hopefully. Please guide us, thank you.
From India, Ahmedabad
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First thing is that, if her date of appointment was in March 2023, you should not have waited for two years (approximately) to terminate her. It is also often found that the employer gives an appointment order without specifying any probation period. Certainly, if she was under probation, we would have a space to breathe and take action even by dismissing without showing any reason and notice if we find that she is getting involved in activities against the management.
Second, since we have proof to show that she was given warnings at regular intervals and she was given a warning to improve her performance, you can certainly take a stand that her termination was not at all stigmatic but simpliciter only. Only in the case of termination causing stigma is an inquiry legally mandatory whereas if the employer finds that an employee is unfit for the work assigned, he can very well ask her to go by giving notice or wages in lieu of notice. The remedy available is offering one month's pay. The maximum the labor Officer can direct is to pay compensation considering the termination as 'retrenchment' and in such a scenario, the compensation will not exceed 15 days' pay for every completed year of service, i.e., again 30 days' pay.
The Union will always mislead the employees, especially when it is termination of employment. But when you are called for a conciliation by the Labor Officer, you can discuss the matter round the table and say that we cannot rehire an employee who cannot accept our office culture. Therefore, the chances of referring the matter for adjudication are remote, but the Labor Officer himself will come up with a solution.
From India, Kannur
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Second, since we have proof to show that she was given warnings at regular intervals and she was given a warning to improve her performance, you can certainly take a stand that her termination was not at all stigmatic but simpliciter only. Only in the case of termination causing stigma is an inquiry legally mandatory whereas if the employer finds that an employee is unfit for the work assigned, he can very well ask her to go by giving notice or wages in lieu of notice. The remedy available is offering one month's pay. The maximum the labor Officer can direct is to pay compensation considering the termination as 'retrenchment' and in such a scenario, the compensation will not exceed 15 days' pay for every completed year of service, i.e., again 30 days' pay.
The Union will always mislead the employees, especially when it is termination of employment. But when you are called for a conciliation by the Labor Officer, you can discuss the matter round the table and say that we cannot rehire an employee who cannot accept our office culture. Therefore, the chances of referring the matter for adjudication are remote, but the Labor Officer himself will come up with a solution.
From India, Kannur
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Thank you for good guidance,sir
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Dear Mr. Prasad,
The reason for termination was "Poor Performance." Was this clause included in the appointment letter or is it part of the Company Standing Order? These aspects will be crucial during the reconciliation process and may also be relevant in the labor court.
Thank you.
From India, Mumbai
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The reason for termination was "Poor Performance." Was this clause included in the appointment letter or is it part of the Company Standing Order? These aspects will be crucial during the reconciliation process and may also be relevant in the labor court.
Thank you.
From India, Mumbai
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(Fact Checked)-Your reply is accurate. It's crucial to have poor performance as a clause for termination in the appointment letter or company standing order for legal support. (1 Acknowledge point)
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This should be considered as termination simpliciter and not dismissal. In the absence of Standing Orders, the terminal clauses in the appointment order shall be considered as valid.
The Workmen of Sudder Office, Cinnamara vs Management of Sudder Office And Anr ((1972)4SCC746) and Amy N. Irani vs Makers Development Services (P) Ltd ((2003)IILLJ847BOM) are a few citations wherein the Courts have said that employment is based on trust and the employer cannot be compelled to let one continue if he has lost trust and confidence.
In this case also, the employer seems to have lost confidence in her, and it was after repeated requests to improve her performance and attitude that the employer terminated her. Therefore, principles of natural justice have been followed. Moreover, the employer has initiated a termination simpliciter by offering her one month's salary in lieu of notice.
From India, Kannur
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The Workmen of Sudder Office, Cinnamara vs Management of Sudder Office And Anr ((1972)4SCC746) and Amy N. Irani vs Makers Development Services (P) Ltd ((2003)IILLJ847BOM) are a few citations wherein the Courts have said that employment is based on trust and the employer cannot be compelled to let one continue if he has lost trust and confidence.
In this case also, the employer seems to have lost confidence in her, and it was after repeated requests to improve her performance and attitude that the employer terminated her. Therefore, principles of natural justice have been followed. Moreover, the employer has initiated a termination simpliciter by offering her one month's salary in lieu of notice.
From India, Kannur
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(Fact Checked)-Your reply is correct. The cases cited are relevant and your interpretation of them is accurate. This termination should indeed be treated as simpliciter, not dismissal. (1 Acknowledge point)
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Dear Prasad,
Greetings.
As per the inputs given by Madhu, it's more than enough. You don't need to panic in any way. You have clearly mentioned, "several memos and emails were given about poor work performance." I would like to ask, did you put the employee into any special training based on her performance?
If you have not provided any training based on performance and have directly dismissed her, the hearing that you are being called for will ask you to provide her training and give her one more chance.
It would be great if you could share with me the exact details of the officer who sent you the letter for the hearing, the date of the hearing, the venue, and your company details. I can help you with a smooth process.
Note: Being a company VP, it's not mandatory for you to be directly present for the hearing. You can designate a representative from the HR team and legal team to attend the hearing.
Please share the details so that we can help you officially regarding the same.
From India, Vijayawada
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Greetings.
As per the inputs given by Madhu, it's more than enough. You don't need to panic in any way. You have clearly mentioned, "several memos and emails were given about poor work performance." I would like to ask, did you put the employee into any special training based on her performance?
If you have not provided any training based on performance and have directly dismissed her, the hearing that you are being called for will ask you to provide her training and give her one more chance.
It would be great if you could share with me the exact details of the officer who sent you the letter for the hearing, the date of the hearing, the venue, and your company details. I can help you with a smooth process.
Note: Being a company VP, it's not mandatory for you to be directly present for the hearing. You can designate a representative from the HR team and legal team to attend the hearing.
Please share the details so that we can help you officially regarding the same.
From India, Vijayawada
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Dear,
The Labor Department has full authority to conduct dispute hearings. First, you need to review the conditions in the worker/employee's appointment letter to see if they include provisions for termination if the worker/employee fails to meet sales-related targets.
Check your establishment's standing orders to see the provisions for removing workers or any other employee, such as conducting an internal inquiry, and ensure you have followed those provisions. Attend the Labor Department's proceedings and present your stance on their raised points.
If the employees consistently disregard your instructions, you have the full right to terminate them.
From India, Pune
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The Labor Department has full authority to conduct dispute hearings. First, you need to review the conditions in the worker/employee's appointment letter to see if they include provisions for termination if the worker/employee fails to meet sales-related targets.
Check your establishment's standing orders to see the provisions for removing workers or any other employee, such as conducting an internal inquiry, and ensure you have followed those provisions. Attend the Labor Department's proceedings and present your stance on their raised points.
If the employees consistently disregard your instructions, you have the full right to terminate them.
From India, Pune
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(Fact Checked)-Your advice is accurate. It's crucial to review the appointment terms and adhere to the internal policies for termination. Always present a compelling case during hearings. (1 Acknowledge point)
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(Fact Checked)-Your advice is correct and precise, shedding light on the process and the importance of the employee's duties in determining their classification as a workman. Well done! (1 Acknowledge point)