Termination of Employment

Blog   wpadmin   December 15, 2021

Executive Summary:

This article covers:

      • The meaning, types of termination of employment; and
      • What should be the ideal steps in handling employee termination?


Employees and employers can separate or discontinue their relationships because of various reasons. Some workers may willingly quit their positions, while others may be fired due to misbehavior, poor performance, or other factors.

What is Termination of Employment?

The term “termination of employment” refers to the end of an employee’s employment with a corporation. An employee may be fired from a job of their own free choosing or as a result of an employer decision. Employers may terminate employees for a variety of reasons, including downsizing, poor job performance, or redundancy. An employee who is not actively working due to illness, a leave of absence, or a furlough is still deemed employed if the connection with the employer has not been legally ended with a termination notice. Employees can be terminated/fired without reason, notice, or warning in some situations, while they cannot in others. It all relies on the sort of work contract to which he is subject. There are two sorts of jobs available:

  • Employment-at-Will: When employees are employed under this, their employers have the right to terminate or fire them for any reason or no reason at all. As a result, they may be laid off without notice. Workers cannot, however, terminate at-will employees for discrimination or employees engaging in legally protected activities.
  • Employment on a Contract: It is a contractual arrangement in which an employee agrees to work for the employer under his control and supervision. Employees who have signed an employment contract are afforded more protection than those in the preceding group. If an employer terminates him/her before the contract time finishes, it is deemed unjust.

There are two types of Termination of Employment

  • 1) Voluntary and
  • 2) Involuntary Employment

What is Voluntary Termination and How Does It Work?

An employee may freely resign from their position with a corporation at any moment. Individuals typically do so when they discover a better job with another firm, retire from the labor force, quit in order to establish their own business, or just wish to take a vacation from working. Voluntary termination can also be the outcome of constructive dismissal, also known as constructive discharge or constructive dismissal. This signifies that the employee left the firm because he or she had no other option. They might have been working under severe strain and harsh working conditions, such as a low income, harassment, a new work location that is more than the employee can realistically commute to, and extended work hours, among other things. An employee who willingly quits a company may be compelled to put in their resignation, which is a written or verbal notice, in advance. Most industries demand a two-week notice period before terminating an employee. In certain circumstances, the employee provides notice at the time of termination or provides no notice at all, such as when an employee quits or fails to return to work.

What Is Involuntary Termination and How Does It Work?

When an employer lay off, dismisses, or terminates an employee, this is considered involuntary termination of employment. Employees who are laid off are frequently let go through no fault of their own, as opposed to those who are fired. Companies frequently opt to lay off people or downsize their companies in order to save operational expenses, reorganize their organizations, or because an employee’s skill set are no longer required. Employees are typically dismissed as a result of poor work performance, inappropriate behavior, or a negative attitude that does not align with the company’s culture.

Checklist for Terminating Employees:

Here’s a brief checklist of some of the steps you’ll need to follow when dismissing personnel.

  • Review company’s HR guidelines and practices before issuing a notice of termination to any employee. Every business has its own set of protocols for dealing with various circumstances.
  • The employment agreement will detail the notice time, severance pay, and other benefits that must be provided to the employee in the event of termination. The agreement generally signed at the start of employment and acts as a valuable reference that may be used in a court of law.
  • Serving a notice is an important aspect of terminating an employment. 30 to 90 days before termination, a severance notice must be delivered. This notification must be in written and provide a detailed explanation of why the employee is being fired.
  • Employees who retire, or get laid off, or reach the end of their contractual obligations are eligible for severance pay. Employees who have worked for a year or longer shall be paid one month’s wages. Employees must be granted three months’ pay if they are being laid off in a protected industry. Employees are entitled to gratuity payments after 5 years of continuous employment under the Payment of Gratuity Act.
  • According to the Industrial Disputes Act of 1972, retrenched (involuntarily fired) workers are entitled to 15 days of severance compensation for each year of service.
  • Exit interviews assist a company in gathering feedback and evaluating its work culture, environment, ethics, and other factors. It also aids firms in identifying areas for development when it comes to improving employee experience at work.

In the event of a dispute, employee protection and court jurisdiction are both important considerations.

A dismissed employee has the legal right to appeal to his or her jurisdictional authority. For one of the following reasons, employee may file a judicial appeal:

  • 1. An employee has been fired without a particular cause being given.
  • 2. The employee has not been found guilty of any wrongdoing and maintains his innocence.
  • 3. The employee believes his/her dismissal was made on unjustified reasons.

An employee must first construct a case and obtain clearance from respective local labor authority before seeking remedy of any of the following concerns. The matter may be handled by jurisdictional conciliation officers, industrial tribunals, or labor courts if consent is given. The Indian Industrial Act of 1947 was enacted to address the problems of workers in the manufacturing industry.

In India, most labor disputes take anywhere from six months to two years to resolve.


Depending on the state where company is based, regulation(s) for firing employees may be different. Different states have their own set of laws and follow somewhat different rules when it comes to jurisdiction. Employee termination method is also influenced by company’s basic values, beliefs, policies and work culture.

When terminating workers, a business must ensure that they have proper documents in place with valid reason for doing so. All communication must go through proper channels, in order to be produced in the event of a disagreement. Dismissing employees on ground of discrimination or personal interests are considered deemed unjust and unlawful.

Some companies, particularly in the case of major layoffs, outsource their termination process to third-party suppliers. Terminating employees in a methodical manner, in accordance with local laws and regulations, may save organization time, effort and money.

Legal Team

Proind Business Solutions Private Limited
306, Tower B, I-thum, Plot No A-40, Sector 62, Noida, UP, India- 201301
No.: +91 120 4224203
Email: info@proind.in, website: www.proind.in

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