2] DISCHARGE : The termination of employment of employees who are not workman are governed by the notice period in their employment contract and the Shops and Establishment Act ( ”S & E” ) of the state in which they work. Generally the State S & E’s provide for atleast one month’s notice of termination or pay in lieu of termination and in some instances, termination needs to be with cause and in some cases the employer needs to pay compensation for terminating the employee. The notice of dismissal under an employment contract should not be less favorable than what is prescribed under the law.
3] RETRENCHMENT : The ID Act sets out the steps to be undertaken for retrenchment. The term retrenchment has been defined to mean termination by the employer of employment of a worker, for any reason other than disciplinary grounds, with certain exceptions.
An employer who proposes to retrench a workman, who has been continously employed for more than one year , must give one month’s notice ( together with the reason for retrenchment) or pay in lieu of such notice to the workman.The employer must also inform the local labour authorities of the retrenchment within a stipulated time frame.