Wages for Blue-Collar Workers

Either the employer or the employee can initiate the termination process. The process should be carried out in accordance with the provisions of the contract of employment entered into between the two parties.

1. Cases Where the Employer May Legally Initiate Termination

The employer may legally initiate termination of employment in the following situations:

• if the contract itself comes to an end;
• if the employee’s performance is unsatisfactory during the probationary period;
• in cases where the employer wants to terminate by notice;
• if there is a breach of contract by the employee;
• for reasons of retirement by the employee; or
• for purposes of retrenchment (downsizing).

2. Cases Where the Employee May Legally Initiate Termination

Employees may legally initiate termination of their employment in the following situations:

• in case of breach of contract by the employer;
• if the employee wants to resign during his or her probationary period;
• if the employee wants to resign by giving notice;
• for medical reasons by giving notice.

3. Notice and Termination Process

For employees subject to the Industrial Employment (Standing Order) Act, 1946, employers must issue a written notice of termination. For other employees, the matter of a written termination notice is governed by the terms of the parties’ service contract. A written termination notice should be duly signed by the person initiating the termination and a copy of the notice should be supplied to the other party. In all other respects, the termination process should be carried out in accordance with the provisions of the contract entered into by the employer and employee.

A typical contract of employment provides that an employer may terminate an employee after giving due notice in writing and any outstanding wages. The employer may also ask the employee to continue rendering services during the period of the notice.

Employment contracts usually stipulate that the employee must provide the employer written notice of his or her intention to discontinue providing services to the employer. Under standard practice in India, one month’s notice typically is required for junior-level employees and three months’ notice for senior-level employees. If the employer wishes, he can accept the resignation with immediate effect, subject to the payment of wages with respect to the time worked.

Notice requirements do not apply in the case of temporary employees, casual workers, probationers, trainees, and the like. In addition, no notice is required in case there is misconduct or breach of contract by any of the parties.