India: Termination of employment

Original author: Kochhar & Co
Updating author: Trilegal

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Summary

• Statutory rules on termination of employment contracts apply mainly to employees classified as "worker" and/or working in shops and commercial establishments. (See General)
• Employees classified as worker, and many employees in shops and commercial establishments, are generally entitled to a statutory minimum notice period, except in the case of disciplinary dismissal. (See Notice periods)
• Employees may generally be dismissed without notice on grounds of misconduct, but any such dismissal must be preceded by a disciplinary procedure. (See Disciplinary dismissal)
• In the event of the "retrenchment" (that is, dismissal on grounds such as redundancy) of a worker with at least one year's continuous service, the employer is required to give one month's notice (or payment in lieu) and reasons for the dismissal, pay compensation, and notify and, in some cases, obtain the authorisation of the public labour authorities. (See Retrenchment)
• Employers are prohibited from dismissing employees who are on maternity leave, or receiving maternity or sickness benefits, while the dismissal of worker on certain grounds is deemed an unlawful "unfair labour practice". (See Special dismissal protection and "unfair labour practices")
• Any employee leaving the company on or after 21 November 2025, will be entitled to exit payments calculated in accordance with the revised statutory definition of "wages". Exit payments are determined by the manner in which an employee leaves the organisation. (See Exit payments)
• There is no statutory compulsory retirement age in the private sector. (See Retirement)
• Employees who believe that they have been unfairly dismissed may bring a court case or, in the case of worker, initiate an industrial dispute, seeking reinstatement and/or compensation. (See Unfair/unlawful dismissal)