🇮🇳 Termination Overview in India

Alastair Samson
Alastair Samson
  • Updated

Oyster policy is denoted in purple.


Customers who wish to explore termination of employment must contact Oyster (http://support.oysterhr.com/).   

In Karnataka, employees challenging their termination must appeal to the Commissioner of Labor.

Employees are entitled to a severance payment (called “retrenchment compensation") upon termination of employment, which will vary depending on whether the relevant employee is classified as a "workman" or a "non-workman". (See definitions under "Types of Employees"). Employers may dismiss employees without severance only for misconduct, and only if the employer has demonstrable proof of this misconduct.

For employees classified as "workmen" severance ("retrenchment compensation") must be paid out at the rate of 15 (fifteen) days' average wages for every completed year of a workman's employment along with 1 (one) month notice period or pay in lieu of such notice period indicating the reasons of retrenchment (defined as termination for any reason other than the employee’s retirement, disciplinary termination, or non-renewal of a temporary contract) of an employee. The employer is further required to notify the appropriate authority regarding the retrenchment of an employee.

For employees classified as "non-workmen," the retrenchment compensation/severance payment due is determined by the employment contract. For the workmen category, the terms of severance can be kept in line with the Industrial Disputes Act. Workmen may challenge a termination under the Industrial Disputes Act.

During the probationary period, the team member or Oyster may end the employment with immediate effect, unless otherwise required by applicable law. After probation, the team member may terminate the employment by providing statutory notice in writing at the end of the calendar month. Oyster may terminate the employment with due observance of any applicable statutory notice period or pay in lieu thereof (for workmen who have worked at least one (1) full statutory year (240 days). Oyster reserves the right to terminate employment with immediate effect and without compensation for serious misconduct or any other reason permissible by applicable law, so long as the misconduct has been established through a disciplinary inquiry, as per the Industrial Disputes Act.


Collective Termination

Collective termination procedures are widely defined and apply as soon as one employee is terminated, triggering the provisions of the Industrial Disputes Act (IDA) of 1947 applicable to collective terminations. The collective dismissal policies are only applicable to workmen that have been employed by the same employer for at least 240 days. The termination notice is required to be at least one month long, but the employment agreement can provide otherwise and is controlling.

As per the IDA, the employer is required to prepare and post (in a conspicuous place on company premises) a list of all workmen who will be retrenched, arranged according to seniority of their services in that category, seven days before the retrenchment date of the employees.




Best in Class


Was this article helpful?

0 out of 0 found this helpful

Have more questions? Submit a request