Downsizing - A legal view
Termination of employment usually has to be for a reasonable cause. Here's what organizations need to know from a legal standpoint when downsizing
The law recognises the need to balance the interests of employees with the genuine reasons for termination that employers might have
In the Indian context, termination of employment usually has to be for a reasonable cause, which means that an employer must have a justifiable reason for the termination, and does not have unbridled discretion. The three most common reasons for termination of employment in India are – (a) redundancy, (b) performance issues, and (c) misconduct. Restructuring/Redundancy What the courts have said? A restructuring exercise can often lead to roles within the organisation becoming redundant. Where the employer has sound commercial reasons, courts have held this to be a reasonable cause for termination. What is the process to follow? For workmen: The process to be followed in a redundancy termination depends largely on whether the employee in question is a 'workman' under the Industrial Disputes Act, 1947 (ID Act) which defines a 'workman' as a person engaged to perform manual, unskilled, skilled, technical, operational, clerical or supervisory work, and specifically excludes (a...
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