Wrongful Termination of Corporate Employees in India: Safeguarding Your Rights

Corporate Practice - SS LAW CODES

In today’s dynamic corporate environment, job security can be a significant concern. Unfortunately, instances of wrongful termination, where an employee is fired without a valid reason or by following improper procedures, can occur. This article explores the legal recourse available to corporate employees who face such situations in India.

Understanding Wrongful Termination

A termination is considered wrongful when it violates the terms of the employment contract, company policies, or relevant labour laws. Here are some common reasons for wrongful termination:

  • Termination without cause: Every employee has the right to be dismissed only for a valid reason, such as poor performance, misconduct, or redundancy. Termination without following proper disciplinary procedures or providing a fair opportunity to defend oneself can be considered wrongful.
  • Discrimination: Termination based on factors like caste, religion, gender, or disability is illegal and discriminatory.
  • Retaliatory termination: Firing an employee for exercising their legal rights, such as whistleblowing or taking medical leave, is strictly prohibited.

Measures a Corporate Employee Can Take

If you believe your termination was wrongful, here are some steps you can take to protect your rights:

  1. Provisions under the Companies Act, 2013:

The Companies Act, 2013, offers certain safeguards for employees of registered companies.

  • Section 280: This section empowers the National Company Law Tribunal (NCLT) to address grievances of employees related to their termination, including wrongful termination. You can file a petition with the NCLT seeking reinstatement or compensation.
  1. Grievance Redressal Mechanism:

Most companies in India are mandated to have a grievance redressal mechanism as stipulated under the Industrial Disputes Act, 1947. This mechanism allows employees to raise concerns about their employment, including wrongful termination, with a designated grievance redressal officer within the company. If the issue is not resolved at this stage, you can approach the Labour Commissioner.

  1. Relief under Employment and Labour Laws:

Several employment and labour laws in India provide protection against wrongful termination. Some key ones include:

  • Industrial Disputes Act, 1947: This Act provides for reinstatement and back wages in cases of wrongful termination.
  • The Payment of Wages Act, 1936: This Act ensures timely payment of salary and other dues even in the case of termination.
  1. Compensation in Case of Wrongful Termination:

If your case of wrongful termination is upheld, you may be entitled to various forms of compensation, including:

  • Back wages: You are entitled to receive unpaid salary for the period between your termination and the court’s decision.
  • Loss of benefits: Compensation may be awarded for the loss of benefits like health insurance or provident fund contributions.
  • Reinstatement: In some cases, the court may order the company to reinstate you to your original position.
  • Compensation for mental distress: You may be awarded compensation for the emotional trauma caused by the wrongful termination.
  1. Filing a Lawsuit:

If the aforementioned steps fail to resolve the issue, you may consider filing a lawsuit against the company in a civil court. This is a more complex process and may require legal representation.

  1. Greviance Portal for Corporate Employees:

The Ministry of Corporate Affairs (MCA) launched an online grievance redressal portal specifically for corporate employees. This portal allows employees to register complaints against companies related to various issues, including wrongful termination.

Special Legislation – Need of the Hour?

Currently, there is no specific law in India solely dedicated to addressing wrongful termination in the corporate sector. While existing legislation offers some protection, some argue for a more comprehensive law with clearer definitions and swifter redressal mechanisms.

A dedicated law could address issues like:

  • Standardization of termination procedures: Clear guidelines on conducting disciplinary inquiries and providing fair hearings during the termination process would benefit both employers and employees.
  • Burden of proof: Shifting the burden of proof to the employer in cases of termination could make it easier for employees to establish wrongful termination.
  • Time-bound resolution: Setting time limits for resolving grievance redressal complaints could expedite the process and provide faster relief to aggrieved employees.

 

Wrongful termination can have severe consequences for an employee’s career and livelihood. Fortunately, Indian legal provisions offer recourse for those who face such situations. By understanding their rights and taking the appropriate steps, corporate employees can seek justice and potentially receive compensation for their losses. The ongoing discussion around the need for specialized wrongful termination legislation highlights India’s commitment to evolving its legal framework to better protect employee rights in the corporate world.

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