Termination of employment in India
By Kumar Panda
The article in this issue of Corporate Amicus discusses laws relating to termination of employees and workmen in India. It summarises various requirements under the Industrial Disputes Act, 1947 and the Industrial Employment (Standing Orders) Act, 1946, and notes that the notice and payment of service compensation as provided under the state-specific shops and establishment acts (which differ from State to State) must also be complied with by the employers for terminating employees. The article also elaborates on the requirements in case of termination of an employee on account of misconduct. The author recommends that to avoid prolonged litigation one must have robust HR policies and appropriate documentation, in case of termination for misconduct. He also suggests obtaining an acknowledgement recording full settlement of dues, and execution of a separation agreement which also includes no-disparaging provisions.
Notifications and Circulars
- IBBI (Insolvency Resolution Process for Corporate Persons) (Second Amendment) Regulations, 2023 notified
- IBBI (Insolvency Professionals) (Second Amendment) Regulations, 2023 notified
- Listing of non-convertible debt securities by listed entities – SEBI (Listing Obligations and Disclosure Requirements) (Fourth Amendment) Regulations, 2023 notified
- Redressal of investor grievances through SEBI Complaint Redressal (SCORES) Platform and linking it to Online Dispute Resolution platform – SEBI Circular
- Holding of AGM, EGM through video conference clarified by MCA
- Limited Liability Partnership (Second Amendment) Rules, 2023 notified
- Regulatory reporting by Alternative Investment funds – SEBI Circular
- Insolvency Professional Entities acting as Insolvency Professionals to submit CIRP forms on IBBI platform
Ratio decidendi
- Contracts – Party when allowed to escape effect of a document signed by it – Plea of non est factum when available – Supreme Court
- Agreements inextricable in nature, containing non-compatible Arbitration clauses – Disputes to be resolved as per the main/umbrella Agreement – Delhi High Court
- After expiry of extension granted for completion of CIRP, Insolvency Resolution Professional / RP is not obliged to accept claim of creditor for considering it in the Resolution Plan – NCLAT
News Nuggets
- Arbitration clause in an unstamped agreement, whether valid? – Issue referred to 7-Judge Bench of the Supreme Court
- Insolvency – Liquidator does not possess unfettered discretion to cancel valid auction on mere expectation of higher price in future – Former promoter director is not a ‘related person’ in case of bidding of assets
- Insolvency – New management of corporate debtor is not responsible for non-compliances of MCA filings occurring before insolvency commencement date
- Insolvency – No provision for re-opening of a CIRP under IBC – Where a settlement fails, only a petition for fresh admission admissible
- Insolvency – CoC’s decision to accept relinquishment of personal guarantees is a commercial decision which cannot be challenged by dissenting financial creditor
- Arbitration – Claims cannot be referred to arbitration when prerequisites to arbitration as per the agreement are not fulfilled
- Arbitration – Court can, within the limited scope of judicial scrutiny under Section 11 of A&C Act, examine if claims are frivolous or meritless
