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Relive (PM)     18 March 2014

Termination clause in appointment letter


I was working for a MNC and could not attend office for 15 days due to critical personal issues. Within 3 days I had informed the organization about my inability to work for few days. Without informing me they terminated my employment and also withheld my salary saying loss of pay for being absent. I was a confirmed employee. I need clarification on the clause in the appointment letter. As I understand, they are supposed to give one month notice or one month pay. Kindly help me if my understanding is correct. The clause in the appointment letter is as below.

"On confirmation, your services in the company may be terminated by either party by serving one month's notice or one month's salary in liu there of. However the Company shall have the right to terminate your services without notice for any misconduct or for any reason including, but not limited to for cause, unsatisfactory performance, and lack of funds, reorganization or elimination of the position." 

Though they have mentioned, they have the right to terminate without notice but haven't mentioned without one month's salary. That is bit confusing for me to go legal. 

Thanks for your help.


 6 Replies

Rohan (Manager- Legal)     18 March 2014

In this case they should pay you the one months' Salary in lieu of the notice . Or they should allow you to work for one month and earn your months' salary (their discretion). Regards the loss of pay of 15 days you were absent- I will be inclined to side with their version (assuming your earned leaves etc are not adjusted against those 15 days).

You will need to clarify the following;

1) What is the payroll date of your company. And which dates you started your 15 days absence in the month.

2) Did you initially expect the company to pay you for the whole month including the 15 days. Did you apply for sick leave or PL for any of those 15 days.

3) Is the company refusing to pay you for the months; dates which you had attended the office.

4) Do you have anything in writing (emails) from the HR clarifying their stand.

Relive (PM)     18 March 2014

Thanks a lot Rohan.

I am not expecting them to pay me for the 15 days leave that I had taken. They should atleast pay me for the 15 days as they didn't give me any notice. When I fought for it, they aren't even giving me the Form 16 and not submitting my PF withdrawal forms to PF office. Can anything be done about this?

I believe from your answer that, the termination clause in my appointment letter definitely means that they can terminate me without notice but they still have to pay me one month salary. Right?

Answers for your queries:

1) What is the payroll date of your company. And which dates you started your 15 days absence in the month.


It is 16th of every month


2) Did you initially expect the company to pay you for the whole month including the 15 days. Did you apply for sick leave or PL for any of those 15 days.


No, I am not expecting any pay for the 15 days I was on leave.


3) Is the company refusing to pay you for the months; dates which you had attended the office.


The have paid my salary for the month/dates I attended. 

4) Do you have anything in writing (emails) from the HR clarifying their stand.


No, I am trying to get it in mail, but they are not responding to mails but they call me to clarify.


Thanks again for your Help!!

Sanjay Malik (Manager- Legal & Compliance )     18 March 2014

in what kind of profile you were working how much length of service you have put into this company if not in admistrative/managerial/supervisor, than certainly, the company can not terminate your services without following due process of law.

most of companies have a clause in appointment letter and under their service rules" loss of lien over the job means if an employee absent himself for 10/15 without any information than there is a presumtion that he has abondend the job. but before that company should follow certain procedure, like sending recall notice, show cause notice and after 2/3 month absence simple letter for abondment of service on employee part.

it seems that in your case the company even have not sent you have single communication for your unathorized absent. in such cases termination can only be done after a reasonable period lapses and the employer have done every possible action to reach to employee and ask for a explanation for prolonged absent without information.

it can be challanged before the labour court. your termination is illegal, without following the due process of law, without giving opportunity to hear you.

Relive (PM)     18 March 2014

Thanks Sanjay.

I was for a IT firm as Solution Manager. I haven't absconded and I had sent mails stating my inability to work for few days. I had communicated that i will be back on certain day but had to etend my leaves. I was couple of days late to infor about the extension of leave.

They haven't given my any termination letter, either by post or by email. Now they are not even supporting for my PF withdrawal.


Kumar Doab (FIN)     18 March 2014

>>> This is once again a classical case of harassment and ‘How an ill informed employee is taken for granted and for a ride by HR personnel, Employers’!

You have posted that you were a confirmed employee!

Apparently HR has contemplated to declare you absconding and without following the due process……………………..and has not terminated you at all………………….YOU may demand to allow you to examine your personnel file and seek appointment from good offices of appointing authority, MD………………However on your complaint the Inspectors as narrated below can  examine Files/Records in office of company and can even call the record in their office………………………..and you can access the record by applying your resources and even RTI to o/o Inspectors…………………..

The HR may not succeed to prove the misconduct.

There are enough publications on ‘Why employer loose cases in court of law’.


>>> You, local office where you were posted and redg. Office of the establishment is located in which state?

Do you have copy of the information supplied by you to company expressing inability to attend office due to some critical personal issues, and thereafter extension of leave, and Proof of Delivery of both and did the employer or manager communicate to you in writing for grant of leave of refusal to grant leave?

Do you POD of submission of PF forms?

Has the company made a mention of HR policy, leave policy, service rules and regulations in appointment letter issued to you?

Does the company keep it’s HR policy, leave policy, service rules and regulations, on a shared portal or in knowledge domain of employee or has it circulated it to employees………….AND have you downloaded it?

What is the reason of termination stated in termination order even if communicated verbally to you? Before issuing Termination Order did the supply any communication, notice, legal notice to you?

If company has not issued and supplied the Termination Order then what is your status in the records of the company? Did the company prohibit you to attend office after your extension of leave: Absconding, Abstaining, Absenting and hence terminated?

You need to ask it in writing and company should inform in writing!

Do you have detail all calls made by you and all calls received by you with date, time, phone numbers, name of company personnel?

Since company and its HR/Legal Cell Personnel are not replying in writing and resorting to verbal transactions you may record all calls.

Use a smart phone and software like ‘True Caller’. Speak dates, and names and be SMART, and get admission of having received everything e.g. emails, PF forms etc…………….

To whom you are writing and who are calling you: Line Managers, HR personnel/Legal Cell personnel…………………………………….? After you have recorded you should now write to good offices of appointing authority and narrate all incidences(mention all phone calls, dates, names brief minutes of discussion, emails etc)…………………….and let this representation be drafted by your lawyer. Request to regularize your leave.



>>> Employee and employer should not look into appointment letter alone.

Service conditions are stated in standing orders (certified/model) applicable to the establishment and extended   to the designation of employee, appointment letter, HR policy/service rules and regulations mention of which is usually made in appointment letter.

The service conditions/rules which are inconsistent with standing orders shall not survive.

The Model Standing Orders/Certified Standing Orders being a statue/instrument of law shall prevail upon any private agreement that employer might have signed with employee be it appointment letter, contract of employment………….….

The standing orders applicable to the establishment should be displayed at a conspicuous place in establishment by employer and certified copy should be supplied to employee on demand against a nominal fee say Rs.10/-

Employee or anyone can obtain copy of standing orders from CO (Certifying Officer) that might be DLC in o/o Labor Commissioner at location of redg. Office of the company against a nominal charge say Rs3/page.

The misconduct that is not specified in standing orders shall not constitute to be misconduct.

Therefore first of all check if the establishment has its Certified Standing Orders and your designation is covered by it or Model Standing Orders are applicable and you are covered by it.

Designation alone does not decide an individual shall be covered as ‘Workman’ as in ID Act or as ‘Employee’ as in Shops and Commercial Establishments Act or not?

IT/ITeS companies are covered by (name of the state) Shops and Commercial Establishments Act, Standing Orders.

Your designation may very well be covered by ‘Workman’ as in ID Act or as ‘Employee’ as in Shops and Commercial Establishments Act.

Your labor consultant/service lawyer may ask you a set of structured questions and may opine that you are covered!


Model Standing Orders:

9.:Leave:……………………….. If the workman after proceeding on leave desires an extension thereof he shall apply to the 12[employer or the officer specified in this behalf by the employer] who shall send a written reply either granting or refusing extension of leave to the workman if his address is available and if such reply is likely to reach him before the expiry of the leave originally granted to him.


(3)   If the workman remains absent beyond the period of leave originally granted or subsequently extended, he shall lose his lien on his appointment unless he (a) returns within 8 days of the expiry of the leave and (b) explains to the satisfaction of the 12[employer or the officer specified in this behalf by the employer], his inability to return before the expiry of his leave. In case the workman loses his lien on his appointment, he shall been titled to be kept on the badly list.

10.  Casual leave.--A workman may be granted casual leave of absence with or without pay not exceeding 10 days in the aggregate in a calendar year. Such leave shall not be for more than three days at a time except in case of sickness. Such leave is intended to meet special circumstances which cannot be foreseen. Ordinarily, the previous permission of the head of the department in the establishment shall be obtained before such leave is taken, but when this is not possible, the head of the department shall, as soon as may be practicable, be informed in writing of the absence from and of the probable duration of such absence.

13.                                                                Termination of employment: .--(1) For terminating employment of a permanent workmen, notice in writing shall be given either by the employer or the workmen - one month’s notice in the case of monthly-rated workmen and two weeks’ notice in the case of other workmen: one month’s or two week’s pay, as the case may be, may be paid in lieu of notice.

(2)   No temporary workman whether monthly-rated, weekly-rated or piece-rated and no probationer or badli shall be entitled  to any notice or  pay in lieu thereof if his services are terminated ,but the services of a temporary workman shall not be terminated as a punishment unless he has been given an opportunity of explaining the charges of misconduct alleged against him in the manner prescribed in Paragraph 14.

        (3)   Where the employment of any workmen is terminated, the wages earned by him and other dues, if any, shall be paid before the expiry of the second working day from the day on which his employment is terminated.

14.Disciplinary action for misconduct.--(1) A workman may be fined up to two per cent of his wages in a month for the following acts and omissions, namely

        (2)   A workman may be suspended for a period not exceeding four days at a time, or dismissed without notice or any compensation in lieu of notice, if he is found to be guilty of misconduct.

(e)                                                                                      habitual absence without leave or absence without leave for more than 10 days,

15.  Complaints.--All complaints arising out of employment including those relating to unfair treatment or wrongful exaction on the part of the employer or his agent, shall be submitted to the manager or other person specified in this behalf with the right of appeal to the employer.

        16.  Certificate on termination of service.--Every permanent  workman shall be entitled to a service certificate at the time of his dismissal, discharge or retirement from service.


NOTE. - There is a provision under  this  Act for issuing a service certificate at the time of  dismissal, discharge or retirement and every person is entitled to take such certificate.

         17. Liability of 17[employer].--The [1][employer] of the establishment shall personally be held responsible for the proper and faithful observance of the standing orders.

18.  Exhibition of standing orders.--A copy of these orders in English and in Hindi shall be pasted at [2][*****] and on a notice-board maintained at or near the main entrance to the establishment and shall be kept in a legible condition.


>>> If employee is not covered by these enactments the service conditions may be governed by appointment letter, service rules and regulations of the establishment.


>>> Your lawyer may opine to  demand the certified copy of standing orders applicable to the establishment, leave policy, service rules and regulations of the establishment, conduct and discipline rules, service conditions applicable to you…………………..   




>>> If employer defaults on payment of wages it may default on PF,ESIC,TDS etc………..

Employee can approach:

----Employees Unions, It/ITeS employees unions e.g:

Shiv Mahiti Ani Tantradyan Sena(Shiv IT SENA)


--- Trade Unions e.g; CITU, AITUC, INTUC ............................

--- Inspector under (Name of your state) Shops and Commercial Establishments Act, If it is commercial establishment.

The employer has to maintain and submit requisite forms and registers according to Shops and Commercial Establishments Act. If the employer makes false entries it is offence.

--- Inspector under Payment of Wages Act: applicable to all employees drawing wages up to Rs.18000/pm as per def. of wages in the Act. 
Refer to: Payment of Wages Act; Sec13A and 2: 3*[(i), (ia), 3*[(vi), 3, 4 ,5, 13a, 14, 15, 16, 17A, 20…………..

and if the Inspector agrees to cover you may immediately submit Form’N’ for recovery of wages.

The employee should approach within 1 year or has to get the delay condoned.

--- O/o Labor Commissioner

----RPFC thru nearest PF office ;The declinature to attest the PF forms is cognizable offence. The designated HR personnel and employer can be in trouble. Employer has to submit attested PF forms to corresponding pF office in 5 days and supply the acknowledgment issued (for employee) to employee by effective modes of communication.

It is almost certain that employer shall claim that employee is absconding and is not terminated hence PF forms can’t be attested.

Therefore it is necessary that you record calls.


----ESTC Inspector in jurisdictional ESTC office
--- ITO; TDS where you file your ITR

CIT-TDS (jurisdictional) where company files ITR

There are provisions for penalty/punishment for non issuance of Form16 by the deducator…………..

----Lawyer/Law firm

---Civil Court

Employees have been contemplating to file criminal complaints u/s 406, 420……………………………and to approach employer as creditors treating unpaid wages as debt on employer e.g;

Before you act further It shall be appropriate to show the job advt, job application, interview call letter, offer letter, selection letter, appointment letter, CTC sheet, Salary Structure, Salary slips, STANDING ORDERS APPLICABLE TO THE ESTABLISHMENT (CERTIFIED/MODEL) AND EXTENDED TO YOUR DESIGNATION, HR policy, Service rules and regulations, Conduct and discipline rules, resignation letter/termination notice, etc …………. Communications exchanged with company to a competent and experienced Labor consultant/service lawyer at your location, give inputs in person and proceed under the expert advice of your lawyer.











Attached File : 1015413361 model standing orders industrial employment standing orders rules.pdf, 1015413361 model standing orders industrial employment standing orders rules.pdf downloaded: 255 times

V. VASUDEVAN (LEGAL COUNSEL)     18 March 2014

At the outset, the termination itself is void since abandonment cannot be presumed. The Company ought to have issued you a show cause and time line for resuming duty. However, a fair practice should be from either side and an employee should  avoid absenting without at least an intimation to the employer. technological advancement has provided numerous means of communication and a long  absence without intimation can't be explained!

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