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Industrial Relations & Labor Laws Group Assignment

Managing Employee Exits:

Legal Regime, Issues &
Challenges
Submitted to: Prof. Rajendra Nath Mehrotra
 Introduction
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Employers must navigate a maze of INDIAN LABOR LAWS (INDIA)

overlapping and confusing employment laws THERE ARE TWO TYPES OF
NOMENCLATURE FOR BOTH
drawn from a variety of sources EMPLOYEES AND
Firms in India do not follow proper procedures EMPLOYERS:

while recruiting and firing employees EMPLOYEE

They risk facing a variety of legal and EMPLOYE
ES
reputation consequences
WORKMAN
Firms must draught contracts and human
resource (HR) materials with the legislative EMPLOYER
ESTABLISHMEN
MANAGING EMPLOYEE EXITS: LEGAL REGIME, ISSUES & CHALLENGES TS FACTORIES
LAWS GOVERNING EMPLOYEE EXITS
The two primary federal statutes that govern employment termination
The Industrial Employment (Standing Orders) Act (IESA), 1946
the Industrial Disputes Act (IDA), 1947
the Shops and Establishments Act
There is no uniform procedure for terminating an employee in India. An employee's
employment may be terminated in accordance with the conditions of the particular
labor contract terms may be governed by labour regulations in the country
employment contracts in India are not required to be in writing by law pro-worker
post ure MANAGING EMPLOYEE EXITS: LEGAL REGIME, ISSUES & CHALLENGES
COMPLIANCE
RULES

1. 30 to 90-day notice period is mandatory when terminating a “workmen.”

2. Termination of an employee is justified by various different factors like intentional disobedience; theft,
cheating, or dishonesty.
3. Employers t hat t erminat e for convenience must ensure t hat t he last person t o join t he same role
is irrelevant.
4. There are provisions for an employee being terminated if pregnant or seeking maternity leave.
5. Non-compete contracts are not enforceable under Indian law.
6. Employees must thus provide formal duties. 1
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MANAGING EMPLOYEE EXITS: LEGAL REGIME, ISSUES & CHALLENGES
 Legal Actions against organizations
Employee Steals or Inappropriately Accesses Company Data

Issues with Compliance Violations or Breaches of Confidentiality Due to Administrative Errors

Unnecessarily High Expenses Due to Unused Licenses and Unknown Recurring
Employee Exit Payments Productivity Loss Caused by Miscommunication
Legally managing the employee’s departure from the
business Recovering company assets
Revoking systems access
MANAGING EMPLOYEE
EXITS: LEGAL REGIME,
Challenges with Employee Exit

The exits are happening in the organization due to a lot many

reasons:
Disobedience/ will-full insubordination
Fraud, Dishonesty, or Theft
Loss/ Damage to the employer’s goods
wilfully. Taking bribes/ illegal gratifications.
Taking leave for 10 days without
notice. Late Attendance.
Disorderly behavior during
work. Negligence of work.
MANAGING EMPLOYEE EXITS: LEGAL REGIME, ISSUES & CHALLENGES

The types of termination of
employment are:
1.Voluntary termination: In this case the employee himself resigns
without any force or he might be seeking a better job. The reason
might be constructive dismissal where an employee gets
dissatisfied with his workplace (facing harassment, low wages, long
work hours, long commute, etc.). Forced discharge also comes
under constructive dismissal. Formal resignation requires a
letter/notice to be submitted within 30 days.
2.Involuntary termination: it happens when employees have to leave
against their free will. Reasons:
3.Layoffs & downsizing
4.Getting fired
5. Illegal dismissals
MANAGING EMPLOYEE EXITS: LEGAL REGIME, ISSUES & CHALLENGES
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LAWS THAT COMES UNDER
PRACTICE WHILE TERMINATION:
Indian Contract Act 1872 (“Contract Act”),
Industrial Disputes Act 1947 (“ID Act”),
Factories Act 1948 (“Factories Act”), Maternity
Benefit (Amendment) Act 2017 (“MB
Amendment Act”), Trade Unions Act 1926 (“TU
Act”), Building and Other Constructions
Workers’ (Regulation of Employment and
Conditions of Service) Act 1996 (“BOCW Act”),
Industrial Employment (Standing Orders) Act
1946 (“IESO Act”), Inter-State Migrant
Workmen (Regulation of Employment and
Conditions of Service) Act 1979 (“ISMW Act”),
Payment of Gratuity Act 1972, Contract Labour
(Regulation and Abolition) Act 1970 (“CLRA
Act”), Employees’ Provident Funds and
Miscellaneous Provisions Act 1952 and the
Employees’ State Insurance Act 1948 and
many other acts are there.
Thank You!