In this case, the employee will not receive a notice of dismissal or severance pay. However, in the latter form of termination, the employee will receive a notice of dismissal 30-90 days prior to termination of service or severance pay. This article will discuss termination without cause and pay.
Termination without cause
An employer has the right to end an employment relationship without a good reason and therefore is not required to justify the dismissal of services. However, he or she is obliged to send a notice of termination, 30-90 days prior to cessation of services and clear all dues, making the following payments:
1. Salary in lieu of notice when the notice has not been given
2. Salary for the days worked which remain unpaid
3. Encashment of unused paid leaves
4. Payment of gratuity to the employee who served for five years or more, as given in the Payment of Gratuity Act 1972
5. Payment of bonus for those employees who worked for at least 30 days in a financial year and earn up to Rs.10,000; as per the Payment of Bonus Act 1965
6. Any other dues contractually agreed under the company policy
The payment of aforementioned dues comes under the title of Severance Pay. The practice of offering severance pay less than what a workman is entitled to is not uncommon. If the employee feels that the package offered is unjust, he or she can approach the labour court regarding the same. It is advisable to hire a corporate lawyer to review the severance package before consenting to it.