Employment Contracts, Standing Orders, Termination Advisory

Why Employment Contracts Matter

A well-drafted employment contract is the foundation of a compliant and dispute-free workplace. It should clearly set out designation, compensation, working hours, leave entitlements, confidentiality obligations, non-compete and non-solicitation clauses (where enforceable), notice periods, and grounds for termination. Ambiguity in these terms is one of the leading causes of litigation. A contract that is vague about probation periods, bonus structures, or termination clauses can expose an employer to claims of wrongful dismissal or unpaid dues months or years down the line.

We advise clients to periodically review and update their contract templates to reflect changes in labour law, business structure, and industry practice — a one-time draft used for a decade is rarely still fit for purpose.

The Role of Standing Orders

For establishments covered under the Industrial Employment (Standing Orders) Act, 1946, having certified Standing Orders is not optional — it is a statutory obligation. Standing Orders govern classification of workmen, shift working, attendance, leave, suspension, disciplinary action, and termination procedures. Where an establishment fails to certify its own Standing Orders, the Model Standing Orders prescribed under the Act typically apply by default, which may not align with the employer’s actual practices or intentions.

Getting Standing Orders certified — and ensuring day-to-day HR practices actually mirror them — is essential. Disciplinary action taken in violation of certified Standing Orders is one of the most common grounds on which labour courts set aside dismissals, even where the underlying misconduct was genuine.

Termination: Where Employers Face the Most Risk

Termination is the single most litigated aspect of the employment relationship, and for good reason — procedural lapses here carry disproportionate consequences. Employers must distinguish carefully between termination simpliciter, termination for misconduct, retrenchment, and resignation, as each carries distinct procedural requirements under the Industrial Disputes Act, 1947, and applicable Standing Orders.

Key safeguards include:

• Issuing a proper charge sheet and conducting a fair domestic enquiry before dismissal for misconduct
• Complying with notice period and retrenchment compensation requirements where applicable
• Maintaining documented performance records to support termination on grounds of unsatisfactory performance
• Ensuring full and final settlement is processed correctly and promptly

Skipping even one procedural step can convert a legitimate termination into an actionable wrong, resulting in reinstatement orders, back-wages, or compensation awards.

How Bakshi and Associates Can Help

Our employment law team assists businesses at every stage — drafting and reviewing employment contracts, securing certification of Standing Orders, conducting compliant disciplinary enquiries, and advising on termination strategy to minimize litigation exposure. Getting this right upfront is significantly less costly than defending it in court later.

If your organization needs a review of its employment documentation or guidance on a specific termination matter, our team is available to assist.