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Retrenching or Terminating? Noticeable Difference and Duties of an Employer in Case of Termination

Posted by: The ADP Team on 12 July 2019 in Human Capital Management

(Volume – 46 of Coffee Break Compliance Guide from Anandan Subramaniam)

We have seen what Retrenchment is and what an employer needs to do while Retrenching an employee in our previous volume (CBCG Volume 44).

Here we discuss about Termination and the difference being, Retrenchment does happen when there is closure of Project, closure of a department, excess manpower, etc., and Termination can happen on Performance related issues or for other reasonable causes.

Basically such separations happens on issues related to Performance on the job or obligations under contract of appointment or misconduct or violation of confidential provision or any other breach of employment contract which are unacceptable by the employer at the workplace. Misconduct can be defined as Dereliction of duty, unlawful or improper behavior. These shall be made understood to every employee through regular communication, trainings etc., as part of periodical awareness.

The misperception of performance always happens when the employee do not know or understand the expectation of the, job to be performed / employer’s goal.

Have decided to terminate? A most unpleasant decision by the business establishments / owners, but it may be absolutely necessary for the business to continue. There are some best practices which can make termination smooth in an establishment, which shall be more ethical and professional manner possible.

If the termination is due to Performance related:

  • Make understand the employee what is expected from him while performing a job.
  • The Job Description may have the expected level of output or performance in a measurable metrics
  • A periodical feedback shall be made available to the employee with facts and whether any changes are needed to attain the required goal
  • During, under performance stages, make every effort of documenting those steps you have taken to counsel such employee
  • Still the employee is performing poorly or less than expected, let the supervisors or Managers be armed with the skill of measuring the regular performance through standard metrics and give a feedback
  • A regular report from such Supervisors or Managers will assist the employer in case of termination is underway as the action.
  • Regular training or putting the employee under PIP (Performance Improvement Plan) is also be considered during the above circumstances.
  • Finally, if the required performance is not seen, list down the reasons for taking termination decision and formally inform it to employee and get an acknowledgement
  • Let the communication has the details of last working day, notice pay if termination is without giving a notice

If the termination is due to other reasonable causes:

Termination for cause – Upon being found guilty of wilful insubordination or disobedience; theft, fraud, or dishonesty; wilful damage to or loss of employer’s goods; partaking of bribes or any illegal gratification; absence without leave for more than 10 days; habitual late attendance; disorderly behavior during working hours; or habitual negligence of work.

Mandatory Duties by employer while executing Termination

  1. Make understand the employee how he/she is to conduct himself/herself while performing duty and while in the office
  2. The Code of Ethics or HR Policy or Provisions of certified standing order is to be apprised during on-boarding and periodically.
  3. Besides the above, an awareness on Sexual Harassment also needs to be apprised to all employees, periodically
  4. An establishment shall applies the reasons for termination objectively and it shall be based on the facts proved by documental evidence or others.
  5. Act of misconduct differs from case to case and not restricted to single case
  6. Finally, if any specific cause, list down the reasons for taking termination decision and formally inform it to employee and get an acknowledgement
  7. It includes constituting and having a disciplinary panel, serving a show cause notice to the errant employee, and giving the employee a reasonable chance to put forth his defence. Proceedings have to be conducted in a fair manner, keeping in mind principles of natural justice.

Employees often challenge their dismissal on the ground that there was no reasonable cause for dismissal or that they had not been guilty of misconduct as held by the employer.

Ensure right decision based on documentations / metrics when it is Performance related and appropriate evidences when it is Conduct related.

Comply with the terms mentioned in the offer/appointment letter.

Avoid unfair termination which will attract legal complications.  We will see the detailed description about “Disciplinary Proceedings”, in the next volume.

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TAGS: Employer Responsibilities Employment Employment Legislation Labour Management

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