What are the grounds for termination under Labour Act 2017?

The Labour Act 2017 provides for various grounds for termination of an employment contract by the employer or the employee. Some of these are:

•  Mutual consent: The employer and the employee can terminate the employment contract by mutual consent at any time, provided that they give a written notice to each other and settle the dues and benefits of the employee.

•  Expiry of term: The employer or the employee can terminate the employment contract upon the expiry of its term, if it is a fixed-term contract. However, if the employee continues to work after the expiry of the term, the contract will be deemed to be renewed for an indefinite term.

•  Retirement: The employer or the employee can terminate the employment contract upon the retirement of the employee, which is 58 years of age or as prescribed by law or by the employment contract. The employer must give a written notice to the employee at least 3 months before the retirement date and pay the retirement benefits to the employee.

•  Resignation: The employee can terminate the employment contract by resigning from his or her job, provided that he or she gives a written notice to the employer at least 30 days in advance and completes the handover process. The employer must pay the dues and benefits of the employee within 7 days of receiving the resignation notice.

•  Dismissal: The employer can terminate the employment contract by dismissing the employee for any of the following reasons:

•  Incompetence or lack of qualification: The employer can dismiss an employee who is incompetent or lacks the relevant qualification for his or her job, after giving him or her an opportunity to improve his or her performance within a reasonable period.

•  Misconduct: The employer can dismiss an employee who commits any misconduct, such as dishonesty, theft, fraud, violence, harassment, insubordination, breach of confidentiality, negligence, absenteeism or violation of rules or policies. The employer must follow a due process of investigation, inquiry and hearing before dismissing an employee for misconduct.

•  Physical incapacity: The employer can dismiss an employee who is physically incapacitated to perform his or her job due to illness, injury or disability, after obtaining a medical certificate from a licensed doctor and giving him or her a reasonable period to recover.

•  Redundancy: The employer can dismiss an employee who becomes redundant due to restructuring, downsizing, merger, closure or automation of the enterprise, after giving him or her a written notice at least 30 days in advance and paying him or her a severance pay equivalent to one month's salary for each year of service.