Termination Requirements
Termination in India, specific regulations and procedures must be adhered to, and the process may differ from the Netherlands. Termination in India is subject to local labor laws and requires compliance with statutory provisions. Employers must handle off-boarding procedures with care, involving primary stakeholders and considering any ad-hoc fees or recommended steps for particular termination cases.
Termination in India can be based on various grounds, including but not limited to:
- Redundancy due to business restructuring or economic factors.
- Long-term disability or incapacity lasting beyond a specified period.
- Frequent or prolonged absence due to illness affecting business operations.
- Underperformance in job responsibilities.
- Misconduct or violation of company policies.
- Refusal to perform contractual duties due to conscientious or religious objection.
- Disturbed relationship impacting the workplace environment.
Indian labor laws require employers to provide a valid reason for termination, and unilateral termination without proper justification may not be permitted. Mutual consent is often preferred, but in certain cases, permission from the relevant labor authorities may be required.
Notice Period
Notice periods for termination by mutual consent in India vary based on the length of an employee's service.
The general structure includes::
- Less than 1 year of service: 1 month's notice
- 1 to 3 years of service: 2 months' notice
- 3 to 5 years of service: 3 months' notice
- More than 5 years of service: 4 months' notice
The notice period typically begins at the end of the month.
Severance for Employees
In India, severance payments during termination by mutual consent are often negotiated and may vary based on the specific circumstances. The amount may be equivalent to 2-6 months of the employee's salary or more, depending on the situation.
In cases where termination is determined by legal authorities or labor courts, the statutory severance pay is applicable. Statutory severance is generally calculated as a percentage of the employee's gross monthly salary for each year worked.
Social Security