Wrongful Termination of Employment

INTRODUCTION

When a person is wrongfully terminated without any sufficient cause for termination, then it is known as wrongful termination of employment. The employer needs to give valid and strong grounds for terminating an employee. Wrongful termination can also include terminations where the employees are not given a chance to speak in their defence. The fundamental principle of Audi Alteram Partem stands violated when something like this happens. Such wrongful terminations are death within labour laws and industrial dispute laws.

LABOUR LAWS AND TERMINATION OF EMPLOYMENT

Labour laws come in the concurrent list of the constitution. This means that labour laws can be regulated both by the Centre and the State governments. Labour laws were introduced in India to provide some sort of balance between the ridiculously imbalanced power structures in an establishment. The imbalance and power play comes into the picture when we talk about the relationship between an employer and an employee. The labour laws were enacted to recognize the rights of employees as against their employers. These laws provide the employees a platform to raise their voices regarding their working conditions in an establishment. The labour laws include the industrial disputes act, industrial relations code, trade unions act, etc. 

UNDERSTANDING WRONGFUL TERMINATION OF EMPLOYMENT

The industrial disputes act is the primary which deals with the dismissal of employees. There are no specific grounds provided in the law for dismissal of the workers but at the same time, there has to be some degree of uniformity when it comes to the dismissal across all organisations. Under the law, any type of dismissal other than that via a disciplinary action is considered retrenchment. Retrenchment requires a one month notice period in which the reason for retrenchment must be mentioned. If an establishment has more than 300 workers who have been working for a continuous period of more than one year, then the prior permission of the government is required before the employer can terminate an employee.

The employee should be given enough opportunity to present his claim before terminating his services. An exception to the general rule is that of fixed-term employment. In fixed-term employment, the employee is terminated once the term of the employment is over. That will not be considered retrenchment under these laws. 

DIFFERENT TYPES OF WRONGFUL TERMINATION 

• A person cannot be terminated based on age, race, caste, sex, etc. 

• The employment agreement between the employer and employee cannot be breached by the employer on any grounds. 

• If a person is terminated because of any other factor such as any personal grudge or any personal factor of the employer. If the reason for termination is the downsizing of the company, then that is also not lawful termination. 

ISSUES THAT PERTAIN TO THE DISMISSAL OF WORKERS ARE UNDER THE JURISDICTION OF THE INDUSTRIAL TRIBUNAL

Issues that relate to dismissal, and grants of employees, are all governed by the industrial tribunal under section 44 of the industrial relations code. A point to be noted here is that the notice requirement under retrenchment is different across many legislations. Some jurisdictions do not mention any notice requirement at all. In such cases, the employment contract comes into force when no established law is found on the issue. The employment act will then govern such nitty-gritty conditions of work. In case, there are any arbitrary clauses within a contract of employment, the labour laws will always prevail over such contracts. One such law is that when the reasons for dismissal are not mentioned, the employee has a right to conduct an inquiry into the same and seek reasons for his dismissal. Legal notice can be sent by the employee to the employer when wrongful termination takes place and if there is no relief by way of notice, then the employee can approach the industrial tribunal. 

REMEDIES IN LAW AGAINST WRONGFUL TERMINATION OF EMPLOYMENT DISCUSSED THROUGH CASE LAWS 

1. The jurisdiction which is appropriate in claiming relief will depend on the type of relief claimed. In the case of Premier Automobiles Ltd. v. Kamlekar Shantaram Wadke of Bombay and Ors. The court held that a civil court will have jurisdiction in cases where the dispute does not qualify to be an industrial dispute. The court also stated that a civil court will have jurisdiction if the dispute is industrial and the right which is sought in the case is a common right and not an industrial right. The third point that the court raised was if the dispute is industrial and if the right sought is also industrial, then the civil court will not have jurisdiction. 

2. GE Capital Transportation Financial Services Ltd vs Tarun Bhargava – the court, in this case, held that even if the termination of employment is wrongful, the remedy of specific performance is not given to the employees because the employees work under private contracts. For the contracts of workers, on the other hand, the award of reinstatement can be ordered. However, the workers will not be reinstated if the employment was acquired through misrepresentation by the worker. If there is enough and proportionate cause for dismissing a worker then there is no law that can bar such dismissal. 

• At this point it is imperative to discuss what is the difference between workers and employees because the remedies provided under law for both categories are different. A worker is a person whose rights and duties are governed by statute and an employee is a person who mostly has a private contract with the employer and their rights are majorly governed by the employment contract as long as such contracts are not arbitrary 

3. Employers in Relation to the Management of Kuju Pundi Project of Central Coalfield Ltd., Ranchi vs. Their Workmen- In this case, the court also held that reinstatement can only be granted if the termination is against the statutory norms. In such cases, it doesn’t matter whether the termination was with or without cause. The procedure needs to be followed. Other factors the court/tribunal will consider while granting reinstatement is the age of the worker, the capacity of the employer, the kind of business the employer does, etc. 

4. S. S. Shetty vs Bharat Nidhi, Ltd – In this case, the court stated that the damages awarded should always be proportionate and reasonable as per the employment contract for employees. So if a contract stipulated that the notice period should be one month after retrenchment and if the same has not been abided by in the contract, then the court can give damages to the tune of anything that comes under that one month. The salary for that one month will be paid and not anything else. 

CONCLUSION

There are a lot of laws that govern the wrongful dismissal of employees. There have been nuances in the same concerning the difference between the employees and the workmen. The workmen have remedies available which are of a wider ambit than the employees who enter in a private capacity. 

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