Rights of Terminated Employees in India

Rights of Terminated Employees

Termination of employment is the departure of an employee from the job and the end of an employee’s job with the employer. Termination can be voluntary, i.e. upon the employee’s own will, or it may be involuntary, i.e. on the will of the employer.

Mostly voluntary termination of employment is in the form of resignation by the employee himself. Resignation by the employee should not be obtained through fraud or coercion. Involuntary termination of employment happens when the employer terminates the employment of an employee due to misconduct, discharge, or retrenchment.


In India, there is no standard procedure followed for the termination of employment of employees. An employer may terminate an employee as per the terms of the labour contract between the employer and employee or following the provision of an Act. An employer may be held responsible for wrongful termination. Employees have the right to certain legal protections against wrongful termination, as workers are protected from being fired for reasons that are against the law or public policy.

The employee has certain rights after his termination, which have to be fulfilled by the employer. The non-fulfilment of such rights empowers the employee to claim his right by suing the employer in a court of law.  In this article, we will discuss the rights of terminated employees so that they may be protected against exploitation by their employer.


Right to Receive a Notice for Termination of Employment

During the termination of employment, the employer needs to comply with federal and state laws because these laws supersede contract provisions. As per the state law in Delhi, The Delhi Shops and Establishments Act 1954 mandates that an employer can terminate an employee by giving him at least 30 days of notice or a salary in lieu of such notice provided that he has been with the corporation for more than three months. There is no need on the part of the employer to give notice to the employee if misconduct is the reason for termination. In this case, the employee has an opportunity to explain himself reasonably.

According to the Maharashtra Shops and Establishments Act, 30 days prior notice for termination of employment must be served by the employer to the employee who has worked with the company for more than a year. If an employee has worked with the company for more than three months but less than a year,  at least 14 days prior notice should be served by the employer.

Right to be Heard

The employee has the right to be heard against the termination of his employment.  He must be given an opportunity to explain his position and show cause as to why he should not be dismissed or discharged. Also, when an employee is discharged or dismissed, he must be provided with reasons for such discharge or dismissal.

The requirement of the right to be heard also goes hand in hand with the principles of natural justice. Under this principle, the aggrieved party has the right to be heard.  The right to be heard gives the employees an opportunity to ensure that the termination is not out of proportion in comparison with the offence.

Right to Sue By Reason Of Illegal or Unlawful Termination

An employee must be given just and reasonable cause for the termination of employment by the employer. It should be in consonance with the grounds mentioned by the statutes or by the employment contract. However, if there is found to be no just cause for the termination and is based on illegal grounds such as discrimination on the basis of religion, caste, gender, age,  disability, pregnancy, etc. then the employee can sue the employer on the grounds of illegal or unlawful termination of employment.

Right to Receive a Severance Pay

Upon termination of the employment contract with the employer, the employee has rights over certain payments, which he is entitled to receive at the time of termination. Such payment is known as severance pay. This includes the payment of the following:

  • Payment of salary in lieu of notice;
  • The unpaid salary for days worked ;
  • Encashment of unused paid leave;
  • Payment of gratuity to an employee who is employed for more than five years as provided for in the Gratuity Act, 1972;
  • Payment of 50% of the employee’s wages for up to 45 days where an employee employed for more than 1 year is laid off;
  • Compensation will be paid that will amount to 15 days average pay for every year of continuous service;
  • Payment of bonus for those employees who worked for at least 30 days in a financial year and earned up to Rs.10,000 under the Payment of Bonus Act of 1965;
  • Any other payment agreed to be paid on termination by the employer under the company policy.

The above-stated payment is applicable to a blue-collar employee and differs for a white-collar employee depending upon his company’s policy. 

Right To Have an Enquiry Conducted

An employee has the right to conduct an inquiry in case of improper and unjust termination. The facts and circumstances should be looked upon carefully and properly weighed to find the real fault on the part of the employee or if he has to be held responsible or not.

Both the employers and the employees have the right to protect themselves while entering into a contract of employment and being bound by it.  Apart from the basic rights governed by various laws with respect to the employee’s working condition, working hours, maternity leave, etc., the employee is given protection in the form of certain rights post-termination also. However, the blue-collar employees are in a better position since their termination is governed by strict statutes, whereas the white-collar employees are left to fend for themselves. Thus, it is of utmost importance for the government to come up with stringent laws to provide protection to the employees as well against the vagary of the employer.

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by Jaspreet Kaur Kohli
  1. Dear team ,

    This side Riddhi, I was Hired on 14 Jan in IDFC First Bank for Credit Card Process on the Pay roll of your company (HGS) .
    So I want to inform you that the Management ( Senior HR- Prajakta) is forcing us for Do Resignation on today after 25 Days of my joining without any valid reason.Also at the time of interview no one informed us that there will a probation period or any pre mock test or assessment. I know I can’t divulge all the things in this mail but still I am sharing my problem with you for hoping best, because this phenomena is making me debilitate.

    So please do needful as I don’t want to resign because I was already hired for 1 year contract.

    Thanks & Regards
    Riddhi porwal

    1. Hi Ridhi,

      Through this blog, we wanted to educate employees like you about their rights. However, we don’t hold any legal power to help you through this. Can we connect you to an employment lawyer who can help in this regard?

      1. Hi mam So my employer has terminated me and is denying to give me notice period he has not mention in my offer letter about probation period I worked for 4 months in that company and he fired everyone because he wanted to close the office without any warning What can I do about that ?

  2. I request for laptop from beginning but got desktop. Due to unavoidable conditions during vivid times i travelled a lot , unable to be available all time. But instead of giving laptop i was removed from my project and kept on bench…. So resigned but three months notice period for relieving….Having stress in mind i undergone bike accident and told 3months bed rest…. So send my documents given by doctors …..but company told me that one month without pay leave then again three months notice period…. I can’t continue….is there any way to comeout from this company peacefully

  3. Hi I recently joined a new company since September 2020, and till date i have not got the increment and i was being threated many times my boss every time if i refuse other than my related work, and now i am in fear of getting fired for no reason. Since they have not given me an confirmation letter yet and i am on CTC terms (CTC term was accepted by me under pressure since i lost my previous job due to lockdown) even after working near 1 year and 6 months still i am not getting any benefit.
    If i am fired for any unknown reason how can i demand the notice period salary? pls help

  4. Hi this is Hrithik. I joined my company Just wines on May 16th, 2022 as Senior associate lead generation and I was told that it will be a 5 day working job with two fixed Saturday and Sunday week offs. They are paying for my travel allowance. but recently they have asked everyone to come and work on Saturdays which is unpaid. They have not asked us to sign anything that its mandatory to work on saturday, and i cannot work on saturdays because of many factors. when i tried to explain my manager the reason i cannot work on saturday, he is threatening me to resign and when i denied to resign. he said we will take it from you and find a replacement. Its 3rd of July, 2022 today. I am supposed to get a good pay this month because of my performance the previous month but I am afraid they will not process my incentives. and in case they terminate me on this case they wont pay me for an extra month.

    1. Hello,
      So I am.working for a company since a months and now they have put on on pip and and salary on hold.
      1. I was not informed about pip starting within a month.of joining.
      2. As per labor law can salary be put on hold with any notice ?
      3. If terminated will the employer pay only the salary or should they be paying notice period parent as.well.

    1. My company terminated me stating i have trust issues with my manager. They gave jn writing they will pay me the salary and incentives. I had 75k incentives now they are refusing to pay saying i did something after they terminated me. And not telling the reason. What should i do

  5. Hii,
    I have been working in this company for 1 year, suddenly company has some funding issue so they are forcing me to resign today of 10 to 15 day notice period, please help me what should i do.

  6. Hi
    I have been working in this company since last year September without getting paid and without signing contracts: the problem starts when my boss tells me about training courses should i attend in February this year: then when the invoice come from training centre which i suppose to attend my training then the boss start telling me that i should pay back all the transport money that he gave me during my training: and now they dismissed me because of I told them that I can’t afford to pay back all the money they gave me its was for transport they didn’t mention before that it’s a loan

    So in that case what should I do about it am I allowed to report them in CCMA

  7. Hello,
    May i know if an employer can send emails to his customers and vendors, informing about termination of an employee. Also in this email can they ask for any proof of employees interaction with them

  8. Dear Team
    I have been terminated from Parle Biscuits Pvt. Ltd. because of my Area Sales Manager demands Phone Dog & Tv from me & also my Divisional Sales Manager demands phone from me, I have given Phone & Dog to my ASM & he is also having drinking habit daily he used to call me & he always need Whiskey half from me
    I have written this mail to company honour Mr. Arup Chauhan & whole team of Parle, but they have terminated me from my job without giving me a notice.
    Kindly tell me what I do?
    Rajesh Malik

  9. Hi Team,
    I have few concerns here, I was terminated by the company due to PIP but I didn’t get the two months salary. I have asked the HR team they said due to PIP you are not eligible to get two months salary. Even I checked the HR policy no where mentioned “If employee under PIP and terminated for the same reason, he will not get the 2 months salary”. My team manager announced the hike % of this year. May be they did the cheating to me. I am not sure, now whom to ask like company CEO or Director. Some one please guide me. If I am wrong.

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