Discharge vs termination difference and should employer pay notice pay on last day

Dear Client,
When an employee is discharged rather than terminated, legal consequences arise especially when the discharge letter is prepared in advance and dated to the previous day the employee worked. If you are associated with discharge, where employees are let go off work due to incompetence among other factors while the latter is associated with termination on grounds of poor performance or engaging in unlawful activities. If you felt that you were going to be fired, this could be challenged on this ground alone. Under the Industrial Disputes Act, 1947 employees can be dismissed without any notice and without payment of notice wages unless he has been dismissed for misconduct. The Supreme Court has said that the final settlements, including notice pay, should be made on the last working day in various judicial pronouncements. Omission of this payment may also be deemed as a violation of the employee’s rights.

Hope you find this advice beneficial.

Dear Client,
An employer or an employee can initiate the discharge depending on the situation or consequences. A voluntary discharge means that you resign from a job in compliance with the terms of employment and in that situation, you are entitled to service-linked benefits up to the last date of work(LWD). An involuntary discharge means that an employer dismisses you from the company for a proven act of misconduct and even in that case you are entitled to service-linked benefits up to the last date of work(LWD). on the other hand, if an employee is terminated without cause, they are entitled to receive severance pay. The amount of severance pay is typically one month's salary for every year of service but may be more or less depending on the contract. Any Termination of a workman is covered under the Industrial Disputes Act and it falls under ‘Retrenchment’. In the case of Punjab Land Development Corporation Vs Labour Court, 1990 (II) LLJ, 70 SC, the Supreme Court held that The expression ‘retrenchment’ is not to be understood in its narrow, natural and contextual meaning, but is to be understood in its wider, literal meaning to mean termination of service of a workman for any reason whatsoever. Further, in the case of Santosh Gupta Vs State Bank of Patiala AIR 1980 SC 1219, the Supreme Court ruled that the expression retrenchment must include every termination of the services of a workman by an act of the employer. Under Chapters V-A & V-B of the Industrial Disputes Act, 1947, for retrenchment of a workman of an industrial establishment employing below 100 workmen, an employer has to one month's notice or wages in lieu of notice, Compensation of Fifteen days average pay for every completed year of service. 6 months and above to be treated as one year and service of Notice to the appropriate Government(Labour Commissioner). Thus, If an employee is terminated without cause, they are entitled to receive severance pay. The amount of severance pay is typically one month's salary for every year of service but may be more or less depending on the contract. An employee could be entitled to get 'payment in lieu of notice'. This means they stop work straight away but still get paid for their notice period. Termination or dismissal other than a disciplinary action for proven misconduct amounts to illegal termination/
retrenchment and is defined as an industrial dispute under Section 2A of the Industrial Dispute Act, 1947 which also violated the mandatory provision of Sec.25F and 25N of the I D Act that prescribed certain conditions to comply with by the employer before termination/retrenchment of a workman/employee from the employment. In that scenario, the terminated employee/workman can raise an industrial dispute before the concerned Labour Commissioner for redressal of the complaint failing which he can approach directly the Industrial Tribunal/Labor Court concerned for adjudication provided he is not holding the position of Manager/Supervisor but a workman as defined u/s.2(s) of the Industrial Dispute Act. Otherwise, in case he is holding the position of Manager/Administrative Officer in the Company, he has to file a civil suit before the Civil Court seeking appropriate relief in the matter.