Termination of employment means the departure of the employee from the job. And, also means the end of the employee’s job with the employer. In India, there is no standard form for terminating the employment of the employee. The employee has the option either to resign or he /she got termination from the employer. In case of voluntary resignation, the employee resigned from the job of his own will. Whereas, in involuntary termination, the employer terminates the employee’s job on his own will due to misconduct, retrenchment or discharge, lay off, etc.

Illegal Termination

Illegal or unfair dismissal is an act of removing the employee from employment without assigning him a proper or valid reason. Nevertheless such an act of terminating the employee without giving him sound reason or an opportunity of hearing is against the principles of natural justice. Labor and industrial law deal with the employment issues of the employer and employee.

Different Types of Illegal Termination

Termination of employment is a very stressful period in the life of the employee. There are different ways of termination as follow:

  • Discrimination

If an employee is terminated on the basis of age, race, sex, nationality, or any other such discriminatory grounds then that termination is illegal. If an employee is terminated on the basis of having a disease that is non-communicable then that termination is wrongful. For instance termination of an employee who has HIV.

  • Breach of Contract

If the employee and employer have signed an employment agreement and the employer doesn’t abide by the terms of that agreement and on that basis terminates the employee then that termination is wrongful.

  • Retaliation

the employer doesn’t have any right to terminate the employee on the basis that the latter has filed an official complaint against him for discrimination or is participating in an investigation for discrimination.

  • Reporting a violation of law to the government authorities

The act of reporting the wrongdoing or illegal act of the employer or the company is known as whistleblowing. An employee who is a whistleblower cannot be terminated for reporting the wrong or illegal act of the employee as he is protected by the law.

  • Employer not following the company’s own termination procedure

For terminating the employee, the procedure of termination mentioned in the company policy needs to be followed by the employer. If the employer deviates from the termination policies then that is wrongful termination.

Laws against Wrongful Termination

In India, there are several labor laws that help in the prevention and safeguard of illegal termination of employment. If any of the above-mentioned terminations are done then it is in violation of the fundamental rights of that person. For this purpose The Industrial Disputes Act, The Workmen Compensation Act, and State Shops and Establishment Act primarily deal with wrongful termination of the employee.

In India, both the Judiciary and Legislation are pro-labor. Furthermore, it leads to the enactment of many provisions to safeguard the employees. Many laws have been made by the state governments for further protection against the illegal termination of the employees for instance The Karnataka Shops and Establishment Act, 1961, The Maharashtra Shops and Establishment Act, etc.

Rights of Employee Post Termination of Employment

If a person who is wrongfully terminated from the employer establishes that he has been wrongfully terminated then that person has the following rights:

  • Formal Complaint

A person wrongfully terminated has the right to write a formal complaint or grievance letter to the Human Resource Department (HR) against the illegal termination. The HR then has to evaluate the case and conduct an impartial investigation against the claims of the employee. Then it can pronounce the judgment which usually resolves the matter and halt the termination.

  • Right to be Heard

Every employee shall get a right of hearing against wrongful termination, this right goes hand in hand with the principles of natural justice. The employee shall get an opportunity to explain his position and also show cause why the employer is terminating him/her. The employer should also provide the employee with the reason for his termination.

  • Right to receive notice of termination:

The employer has to serve the employee with the notice of termination according to the federal laws of the country. The employer has to give the employee notice of thirty days or a salary in lieu of such notice provided that he has worked in the corporation for more than three months.

  • Right to sue

The employer should give the reason for the termination of the employee. And, it shall in accordance with the grounds that are there in the statutes. Further, by the employment contract. If the reason is not in accordance with the statutes or employment contract then the employee has the right to sue the employer or the corporation for illegal termination.

  • Right to receive severance pay

The employee’s right to payment is intact throughout the process whether it is an illegal termination or he/she resigns.

The employee has right of payment in cases of all the legitimate dues, encashment of unused paid leaves, payment of gratuity to an employee who has been employed under that employer for more than 5 years under Gratuity Act, 1972, payment of 50% of the employee’s wages for up to 45 days in case the employee is employed for more than 1 year is laid off.

Compensation will have to be paid that will amount to 15 days average pay for every year of continuous service. And,  payment of bonus to those employees who worked for at least 30 days in a financial year and earned up to Rs. 10,000 under Payment of Bonus Act, 1965, or any other payment agreed to be paid on the termination of the service of the employee.


Wrongful or illegal termination of an employee is a violation of his fundamental rights. However, the aggrieved party can move to the court to for righting the wrong. The court has the power to order the employer to pay compensation to the employee. Also, it may impose fines or additional compensation to the employee that was terminated. In India, many laws and acts have been enacted to protect the interests of the employees. However certain loopholes are present in these acts which are exploited by the employers. The legal relationship of the employer and employee is governed by the employment contract. Which sometimes is biased towards the employer and it doesn’t leave much bargaining power for the employee. It is important to enact and implement such laws that will safeguard such managerial employees.

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