Employee Termination - Employment Termination by Employer/company in India During Covid-19 Lockdown – a brief write up

Company - Employee - Employment Termination During Covid 19 Lockdown – a brief write up

These coronavirus (COVID 19) pandemic has been like a shock throughout the companies forcing companies to make tough employment decisions, which maybe realigning their workforces, restructuring their finances, and those who have been laid off / terminated are at the receiving end for no fault of theirs.

Employees may not like the companies’ decision but at the end of the day they are running a business and that too has been hit financially very hard due to the pandemic.

However, companies’ should exercise caution while retrenching a workman or employee and not be doing such termination or retrenchment with personal agendas in mind, they should be diligent in following the labour laws of their State as maybe applicable to them and should usually follow the LIFO "Last in First Out"  method(unless any other method approved by the appropriate government or concerned authority) for retrenchment instead of randomly selecting the employees to be retrenched. 

Also while terminating an employee the companies should ensure that they are adhering to the laws applicable and there is a strong reason for such termination(as Employees family depends on them) and the employee has been given adequate opportunity to represent his side to the company, there cannot be termination on account that no reason exists for termination.

Many companies are terminating employees citing reason of Covid 19 pandemic but this is incorrect, incase of the pandemic reason they need to retrench, which needs the permissions of the appropriate government and the Lifo method (or any other method as aproned or as provided by the appropriate government) to be followed for selecting the employee to be retrenched, there is a retrenchment allowance that needs to be paid to the employee together with other applicable components such as leave encashment, bonus, gratuity, balance pay or any others as maybe applicable to the company. But few companies either due to lack of knowledge or in a hurry may seem to be violating this procedure, which is a very old procedure established by the laws applicable in India, and are in due  course are making themselves liable for default by violating the laws applicable.

Hence, since the pandemic has definitely affected the companies and the employees, it is suggested that both need to think with a humane approach and negotiate amongst each other in order to help each other and save both, As both of them are they are equally very important for each others existence. 

And just in case it’s not possible for any one of them to continue their contracts with the other part, than they should be very careful in following the termination procedure such as giving adequate notice period as per employment contract, pay in lieu of notice, taking sign offs where required, paying salary due, etc., otherwise it may land themselves in serious default of non-adherence to applicable laws of the land.

Author - Adv. Jatin Shamsunder Adhav, The author is a lawyer by profession practicing in field labour and various other laws and can be reached on 9762382477 or adv.jatinadhav@gmail.com for any errors or omissions. Note- This should not be construed as any legal advice or solicitation; you may read it at your own discretion and seek legal advice from your counsels/attorney if required. Please do not treat this as any kind of legal advice. This is cost free and for private circulation only. Reader’s discretion is advised. Please check the entire relevant circulars/ orders/information before any publishing or further circulation etc.