Expansion of Corporate Market: Basis of Employer-Employee relation:
Globalization has led to a rapid expansion of the corporate market. It has led to swift in the amplification in the FDI which also changed the way of the job market. Mumbai, Delhi and Bangalore have emerged as the top three cities in India in terms of generating white-collar jobs with the financial capital of the country alone accounting for 28%1 of the new employment opportunities. With the development of these markets, the relationship between the employer and employee has also been revolutionized, so the nature of disputes have arisen because of stereotyping employees because of gender, pregnancy, age, caste or other disability, continuous harassment of employees which includes inequitable pay, unfair demands, long hours work, non-recognition, bullying, favouritism to other workers etc. Several laws2 have been drafted by the state to protect the interests of the employee community. And provide them the opportunity to act against any illegal termination made against them.
WHAT DOES WRONGFUL TERMINATION MEANS?
Wrongful termination is basically the firing of an employee unlawfully for a reason, such as discrimination or retaliation or an employee can be considered to have been wrongfully terminated if there is the involvement of discrimination in the termination, if public policy is violated, or if there were some company’s guidelines which were not followed. Here discrimination can be either on the basis of race, colour, nationality, gender, religion or ages. There can be other reason as well like being a whistleblower, complaining about the workplace or resisting from doing any illegal activity asked by the employer.
There are two ways of termination:
- Collective termination
- Individual termination
Collective Termination: This type of termination is permitted under Indian labour laws but only in certain circumstances. In case of retrenchment, employers are required to seek approval of the concerned labour department, depending on the number of workmen engaged. It is also important to note that in case of retrenchment, employers used to follow the “last in, first out” principle, in which the shortest-serving employees will be the first to get terminated.
Individual Termination: Dismissal of any individual workman would also come under retrenchment to which the employer has the obligation to provide prior notice of termination of 30-90 days with a compensatory amount. Retrenchment compensation should have to be paid at the rate of 15 days wages for every completed year of service. But in the case wherein in employees are terminated for their misconduct no prior notice of termination or retrenchment compensation would be required.
WHAT TO DO AGAINST SUCH ILLEGAL TERMINATION?
There are a few points which a victim of wrongful termination should keep in mind after getting terminated.
- Consult with an Employment Attorney: Such consultation is necessary, as each and every state has its own laws and so professionals of the state would be most helpful.
- Precautionary measures: To make your case strong it is important that victim must have their copy of the personal file which includes all the communication between the victim and the company including emails, memos, awards, letters etc. They should also have their letter of termination and other relevant paperwork regarding their termination.
- Case Review: It is important to review the case once, basically every relevant document such as employee handbook, policy manual and union contract. Failing to review it might be in the favour of the employer as their side took relevant measures to protect themselves which are unknown to the employee.
- Filing Case: After all the process, its time to file the case. It should begin with filing an administrative claim with the Equal Employment Opportunity Commission which should be done within 180 days of termination. According to the EEOC3, there is a general increase in awareness and interest in its services among the public. This is evidenced by increased emails, toll-free calls and office inquiries it received in the fiscal year 2018. Taking up 51% of the 76, 418 cases they handled in the year 2018, retaliation was the most common type of discrimination in the workplace. It was closely followed by sexual harassment and disability discrimination. However these do not strictly pertain to wrongful termination, but these numbers show a clear picture of the employees who now know their rights and are not afraid to raise their voice against it.
- Settle or not to settle: Its upon victim whether he wants justice or just a monetary profit. Many times to avoid court proceedings employers used to offer some monetary compensation which is of the high amount which also satisfies the victim too but monetary compensation is not always the goal of the victim of wrongful termination. They want to protect their rights by punishing those employers. It is very clear that both the attorney and the victim should be clear about their goal before filing case.
REMEDIES FOR EMPLOYEE SEEKING TO CHALLENGE WRONGFUL DISMISSAL
The remedies are available for employees seeking to challenge wrongful termination which include:
- Reinstatement of employment
- Back pay;
- Loss of wages and earning capacity;
- All other expenses.
LAWS PROTECTING VICTIMS OF WRONGFUL TERMINATION
There are several laws and acts which protect the rights of the victim. It offers the workers a considerable amount of protection. Courts as well as state and federal labour department looks after the disputes.
As labour law is considered as a concurrent subject in the Indian constitution so labour and employment regulations are governed at both the federal and state levels in India. The main federal statutes that regulate the termination of employment include the Industrial Employment (Standing Orders) Act, 1946 and the Industrial Disputes Act 1947, as amended. The rights of Indian labours are also regulated by the Shops and Establishments Act.
Some Important Compliance Rules When Terminating Employees in India:-
(i) The Industrial Disputes Act, 1947 states and mandates that a 30- to 90-day notice period must be given when terminating “workmen.” While in manufacturing units, plantations, and mines with 100 or more workers, government approval is required for “termination for convenience”.
(ii) There are following reasons cited by Indian labour laws that justify termination for cause:-
- willful disobedience;
- theft, fraud, or dishonesty;
- willful damage
- any illegal gratification;
- an absence without leave for more than 10 days;
- habitual late attendance;
- disorderly behaviour during working hours; or
- habitual negligence of work.
(iii) Employers must ensure that the last person to join the organization in the same role is first made redundant when they are terminated for convenience as it is the most ideal practice followed by most of the firms.
(iv) As per the provisions of maternity act, it is the duty of the employer to balance employee convenience which is in compliance with the above act.
To hear the claims of workmen the ID Act provides for the appointment of Concilliation officers, Court of Enquiry, Labour courts, Tribunals etc while as per S&E Act there are appropriate authority or civil court where non-workmen may approach. It also provides for the conciliation of disputes and voluntary reference of disputes to arbitration, before approaching the labour courts. And for that claim workmen do not have to pay any fees to any authorities. In the case of discharge, dismissal, retrenchment or any form of termination of service, a workman can raise dispute directly before conciliation officer. All other ‘rights disputes’4 and ‘interest disputes’5 may be raised by the trade union or by their management before the labour court and industrial tribunals, respectively.
Whistle Blowers Protection Act 2014: It governs the corruption and misuse of power by public servants and protects those who exposed such wrongdoings.
Prevention of Corruption Act 1988: It has been recently amended which now punishes those who bribe any public servant for any illegal act.
CASES RELATED TO WRONGFUL TERMINATION
Hindustan Tin Works(P) Ltd V Employes6
A three-judge bench of the Supreme Court held “Full back wages would be the normal rule and the party objecting to it must establish the circumstances necessitating departure.”
Surendra Kumar Verma v. Central Government Industrial Tribunal-cum-Labour Court7
A three-judge bench of the Supreme Court stated that, “Plain common-sense dictates that the removal of an order terminating the services of workmen must ordinarily lead to the reinstatement of the services of the workmen. It is as if the order has never been, and so it must ordinarily lead to back wages too”. It further held that only in exceptional circumstances the court may exercise its discretion to deny the relief of full back wages.
Michael Manwell v. Rochester Gear, Inc. (Michigan)8
The employee sued for wrongful termination where he was allegedly sent home after demonstrating potential COVID-19 symptoms. Plaintiff alleges defendant (employer) violated the FMLA and public policy.
Chapman v. Alaris Health, LLC (New Jersey)9
Employee, a nurse assistant, sued for wrongful discharge in violation of public policy, and in violation of state whistleblower law. Plaintiff alleges that despite testing positive for COVID-19, defendant terminated her for not returning to work.
The time has come for India to enact some more strict legislation which will provide protection to the white-collar employees who are illegally terminated on baseless grounds with hardly any right of being heard and after the termination as well the employer coerce them with post-termination duties. For the sake of aggrieved parties (employees) the initiation of arbitration proceedings as well as rendering justice as fast as possible is necessary.
1 Supra 2
2 The Employees’ State Insurance Act, 1948, The Beedi Workers Welfare Cess Act, 1976, The Contract Labour (Regulation and Abolition) Act, 1970, The Equal Remuneration Act, 1976, The Industrial Disputes Act, 1947, The Industrial Employment (Standing Orders) Act, 1946, The Maternity Benefit Act, 1961, The Minimum Wages Act, 1948, The Trade Unions Act, 1926, The Workmen’s Compensation Act, 1923
4 Second Schedule of ID Act
5 Third schedule of ID Act
6 (1979) 2 SCC 80
7 (1980) 4 SCC 443
This article is authored by Aanchal Sinha, Second-Year, BA.LLB (Hons.) student at ICFAI University, Dehradun.