INDIA Law and Practice Contributed by: Anshul Prakash, Kruthi N Murthy and Deeksha Malik, Khaitan & Co
7.3 Dismissal for (Serious) Cause There is no set list of acts of “serious/gross miscon - duct” or statutory guidance on what amounts to seri - ous misconduct warranting summary dismissal. When determining an act to be misconduct or gross miscon - duct, factors such as whether the alleged act affects discipline in the organisation should be considered, or whether the act is backed by an improper motive and whether the act, if condoned, would send the wrong message to others. As a general principle, termination on account of misconduct (gross misconduct or otherwise) should be preceded by a domestic inquiry conducted in accordance with the principles of natural justice. The employee should be given a fair opportunity to present their case/defend themselves against the charges lev - elled. To commence the domestic inquiry/proceed - ing, an employer is required to share a charge sheet or serve a show-cause notice to the employee con - cerned, so that they are aware of the charges levelled against them and can prepare to present their case. The parties should also be allowed to present their evidence/witnesses and cross-examine the witnesses presented by the other party. Following the inquiry, the findings should also be recorded and communicated to the employee. As per judicial precedents, the requirement to conduct a disciplinary inquiry may be dispensed with in some cases, if: • the misconduct is so apparent that a disciplinary inquiry is not required; or • the act constituting misconduct has been uncondi - tionally admitted by the employee. 7.4 Termination Agreements While there is no statutory requirement for execut - ing termination agreements/exit documentation, it is industry practice (and recommended) to record the terms of an employee’s exit in an appropriate docu - ment and set out the exit payments, the release of claims provisions, post-employment obligations and restrictive covenants, etc. There are no prescribed procedures/formalities or limitations in respect of the execution of termination
documents. Depending on the nature of the exit, the documentation may vary. In the case of resignation by an employee, a resig - nation acceptance letter is issued by the employer pursuant to receipt of a written resignation letter/email from the employee concerned, and it will have to be countersigned by the employee. In the case of key employees, employers may require them to execute more detailed “settlement and release agreements” that record the full and final settlement payments, as well as the related logistics and conditions. In the case of termination of employment by the employer, the employer will issue a termination let - ter/notice, which is not required to be countersigned by the employee (since such termination is a unilat - eral act of the employer). In the case of termination simpliciter, there is no requirement to mention the circumstances of the exit in the termination notice, while in cases of termination for cause/misconduct, the termination letter will have to set out the details of the proven misconduct against the employee. 7.5 Protected Categories of Employee Industrial relations laws in India (such as the ID Act, the IESO Act and most S&E Acts) provide protection against dismissal for the non-managerial category of employees. Protections prescribed for non-man - agerial employees against dismissal include prior notice requirements, payment of Retrenchment Com - pensation, prior approval requirements (in cases of employees engaged at factories, mines and planta - tions engaging more than the specified number of employees), etc. The MB Act also prohibits the dismissal or discharge of women (engaged in managerial or non-managerial roles) during their pregnancy or while on maternity leave.
8. Disputes 8.1 Wrongful Dismissal
Employees may initiate wrongful dismissal claims on various grounds, including shortfall/denial of exit payments and failure to follow the due procedure for
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