Multinational Companies (MNCs), Terminating Employees Illegally – Legal Recourse

Terminating an employee is a complicated issue that requires careful consideration and adherence to the law. Some companies end employees because of illegal or unethical motives. It can have severe consequences for both the company and the employee. This blog will explore the most common reasons for illegal terminations of employees by employers, as well as legal protections against wrongful termination.

The following is a brief introduction to the topic

In recent years, the issue of termination has received significant attention, especially in India. According to a study by the Centre for Monitoring the Indian Economy, India’s unemployment rate will reach 7.97% by March 2021. This is due to millions of people being laid off because of the COVID-19 epidemic. Many Indian companies and MNCs engage in illegal terminations despite the protections for employees against wrongful dismissal. Some companies have taken advantage of this situation and terminated employees without following legal procedures. Some employees were closed because of their age, gender, or caste. This violates India’s antidiscrimination law. Some companies terminate their employees without adequate notice or compensation, which is against Indian labor law. The employee and company can suffer serious consequences from these illegal termination practices, such as legal action, financial penalties, and damage to their reputation. It is also essential to understand when a termination is unlawful.

What is wrongful termination?

A wrongful termination of an employee is an act where an employer terminates/dismisses/removes an employee without providing valid grounds for such conduct. In cases where an employer or company cannot provide good reasons for terminating an employee prematurely, this is considered illegal. When an employee is denied the right to be heard, regardless of the reason, this violates the fundamental principle Audi Alterem Partm which says, “Listen to the other side.”

Circumstances in which a termination is illegal

Discrimination. If an employee’s termination is due to race, gender or age, religion, or any other protected characteristic, it violates antidiscrimination law. It is, therefore, an unethical and illegal termination.

Retaliation. If an employee is terminated due to reporting harassment, discrimination, or other illegal activities, this is against whistleblower laws.

Violations of public policy. It is illegal if a termination is made because an employee exercised their legal rights (such as voting, taking time off to serve on jury duty, or reporting workplace safety violations).

Breach of contract. If a termination is made in violation of an employee’s employment contract, this is illegal according to contract law. In most cases, the offer or appointment letter will include a clause stating that an employee must serve a one-month notice period if they resign. The employer will be penalized if the employee does not fit the notice period. It is the same for vice versa.

In India, it is also paramount to have laws that protect employees from being terminated illegally. These laws protect employees’ rights, ensuring that they aren’t unfairly fired from their job. These laws also provide a framework for resolving disputes between employees and employers, promoting an efficient, healthy work environment.

Analysis of Indian laws on termination of Employment

In India, the termination of employees is governed by various laws and regulations. These include the Industrial Disputes Act of 1957, the Shops and Establishments Act of 1960, and the Contract Labour Act of 1970. These laws protect employees from wrongful terminations and require that employers provide adequate notice to terminated workers or compensate them for their loss. These laws prevent employers from completing workers based on gender, age, or caste. They also provide protections to whistleblowers that report illegal activities in the workplace. The Indian government has recently introduced several amendments to the labor laws that aim to protect employees. One of these is the Code on Wages, 2019, which aims to standardize and simplify wage regulations for all industries. There are still cases of illegal terminations of employees by Indian MNCs and companies despite these laws and regulations.

Employees’ Rights after termination of Employment

Right to Compensation

There is also a remedy when a right has been granted by law or contract. Employers should allow the employee to serve their notice period. If this is not possible, the employee should receive a compensation of 15 days’ salary or an equivalent notice period.

Right, to receive a separation payment.

The severance pay is the payment that an employer makes to an employee after they have been terminated. It is meant to support the employee financially during the transition between jobs. Employees in India have the right to receive a severance package after termination. This includes the salary payment as a substitute for notice, unpaid wages for days worked, and the encashment of paid leave. It also provides gratuity for employees working for more than five years, as per the Gratuity Act of 1972, and any bonus payments under the Payment of Bonus Act of 1964.

The right to a severance payout is not absolute. The terms of the collective bargaining agreement or the employment contract may limit it.

Right, to receive an official notice of termination.

A right to a termination notice refers to the employee’s right to be informed by their employer in advance about the termination. The employee can use this notice period to make necessary preparations, find a new job, or seek other employment opportunities. The employee has a right to receive a termination letter specifying the termination date.

Right to be Heard

The right to be heard is a fundamental aspect of Indian labor law. The right to be heard ensures that employees facing termination can defend their rights and present their case before making any decisions.

You have the right to sue for illegal or unlawful termination.

This right allows employees to seek recourse and hold employers accountable for wrongful termination, such as termination, based on the grounds explained above in this blog. This right will enable employees to have their employers responsible for any wrongful terminations, including stops, based on grounds such as those explained in this blog.

Right to an investigation

The employee has a right to ask questions in case of an unjust or improper termination. The facts and circumstances must be carefully examined and weighed to determine if the employee is at fault.

Pregnant women’s rights to employment protection

The Maternity Benefit Act of 1961 allows women to take up to 26 weeks of maternity leave. The Maternity Benefit Act 1961 prohibits the termination of a woman’s job during or because of her absence while on such vacation. It also offers other benefits, such as nursing breaks and medical leave, and employers must provide pregnant women with a safe, healthy working environment. In India, an employer cannot terminate a woman’s job based on her pregnancy.

Employees in India have both civil and criminal remedies against illegal termination. In India, employees have civil and criminal remedies available against unlawful termination.

Employees have legal remedies.

Civil remedies include

Filing a lawsuit: An employee may file a civil suit to seek remedies, such as reinstatement of their position, back pay, compensation for financial loss, damages for mental suffering, and any other relief that the court deems appropriate.

The Employees’ Right to Approach Labor Authorities: Employees may file complaints with labor authorities, such as the Labor Commissioner, Labor Court, or Industrial Tribunal, under the Industrial Disputes Act 1947.

Employees can seek arbitration or conciliation if their employment contract contains a clause that allows them to do so.

Criminal Recourse

If the termination is due to criminal offenses such as fraud or forgery, an employee may file a complaint with the police. The police will investigate and, if necessary, bring criminal charges against the employer.

This includes

A criminal complaint can be filed against an employer under Section 406 (Indian Penal Code) for criminal breach.

A complaint can be filed against an employer under Section 420 IPC for cheating.

A complaint can be filed against an employer under section 499 of IPC for defamation.

The conclusion of the article is

The Indian labor laws can be complicated. Seeking expert guidance is the best way to ensure that you use the remedies available effectively to deal with unlawful termination. Employees must speak with legal experts or labor law specialists to understand the available treatments. This blog contains information for general knowledge only. It should not be construed as legal advice.