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Termination clause in a MNC
Human Resources » Employee Relations

Chrm Message From: Jam Total Posts: 2 Join Date: 25/07/2008
Rank: Beginner Post Date: 25/07/2008 02:16:45 Points: 10 Location: India

I have joined a 100% Indian subsidiary of a US based MNC company in India dealing mainly in Analytical instrumentation, seven months back. I joined based on their offer letter and after one and half months I received the Appointment letter.

In appointment letter it is stated that:

" After you are confirmed in the employment of this company and if you wish to leave the company on your own, you will require to give one(Three) month's notice or compensation equivalent to your one month's (Three) full salary at the time of leaving, whichever is acceptable to the company. In case company is not happy with your performance after your confirmation in company's employment, Company can terminate your services with immediate effect. Incase of termination, you will not be entitled to claim any company benefit which please note." ... exact wordings.

Is this legally correct? I feel it is highly discriminatory and in professions like Sales where performance may not be constant everytime this policy is attrocious.

I had not yet signed this letter and returned to them. They also have forgot it seems. Now my 6 month's probation period is also over and I have received the confirmation letter also. Duplicate of which I need to send them duly signed. I hadn't send that also as it is after that this clause comes into effect.

This company is operational in India directly now only for last one and half years. In this last one and half years there is no history of anyone being fired on this grounds as per my knowledge. Bosses are of Croatian and Italian.

I have been a top performer in my function here already but this clause makes me very nauseating at times as well feeling of guilt in not sending the appointment letter and confirmation till now. But my conscience doesn't allow me to sign such a discriminatory document also.

This 3 months clause came into effect only last 9 months back. Prior to that it was one month notice and nothing for employers. For employees who had joined before they did send an additional letter saying notice period is increased to three months wordings same as above and asked them to sign and send that back (duplicate). In my knowledge very few old timers have sent that back.

What would be your advice should I talk to them on this? Does this type of appointment letter legally OK with prevailing labour laws of India. Does labour laws holds good for MNC's?

Please advice.