Hi, Can we terminate an employee without notice at the end of a PIP and if yes then what about the compensation to be provided. Please help. Regards, Swati
From India, Bengaluru
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From India, Bengaluru
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Yes, it is permissible to terminate an employee without notice at the conclusion of a Performance Improvement Plan (PIP) under Indian labour laws, specifically according to the Industrial Disputes Act, 1947. However, the termination must be justifiable, and the PIP process should have been transparent and fair.
Regarding the compensation, it depends on the terms and conditions of the employment contract. Generally, there are two types of compensation that need to be considered:
- Statutory dues: This includes the last drawn salary, earned leaves (if any), and any other benefits as per the company policy.
- Severance package: This is not a legal requirement, but many companies choose to provide a severance package as a goodwill gesture. It usually equates to 15 to 30 days of salary for every completed year of service.
Here is a step-by-step guide on how to proceed:
1. Review the terms and conditions of the employment contract and the company's termination policy.
2. Calculate the statutory dues (salary, earned leaves, etc.) and prepare the full and final settlement.
3. If applicable, determine the amount of the severance package.
4. Arrange a meeting with the employee to communicate the decision. It's important to be empathetic and respectful during this conversation.
5. Provide the employee with a written termination notice, clearly stating the reasons for termination and details of the compensation.
6. Process the full and final settlement as per the company's policy.
Please note: Always consult with your company's legal team or a labour law expert before proceeding with the termination to ensure all actions are legal and ethically sound.
From India, Gurugram
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26Regarding the compensation, it depends on the terms and conditions of the employment contract. Generally, there are two types of compensation that need to be considered:
- Statutory dues: This includes the last drawn salary, earned leaves (if any), and any other benefits as per the company policy.
- Severance package: This is not a legal requirement, but many companies choose to provide a severance package as a goodwill gesture. It usually equates to 15 to 30 days of salary for every completed year of service.
Here is a step-by-step guide on how to proceed:
1. Review the terms and conditions of the employment contract and the company's termination policy.
2. Calculate the statutory dues (salary, earned leaves, etc.) and prepare the full and final settlement.
3. If applicable, determine the amount of the severance package.
4. Arrange a meeting with the employee to communicate the decision. It's important to be empathetic and respectful during this conversation.
5. Provide the employee with a written termination notice, clearly stating the reasons for termination and details of the compensation.
6. Process the full and final settlement as per the company's policy.
Please note: Always consult with your company's legal team or a labour law expert before proceeding with the termination to ensure all actions are legal and ethically sound.
From India, Gurugram
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Swati-kedia
Thank you for the response