Wrongful Termination & Related Employment Lawsuits under Employment Law
Wrongful Termination under Employment Law
1. Meaning of Wrongful Termination
Wrongful termination (or unlawful dismissal) occurs when an employer ends an employee’s contract of service in violation of:
The terms of the employment contract,
Statutory provisions, or
Principles of natural justice.
It is not merely termination but termination without lawful reason or procedure.
2. Grounds that Make Termination Wrongful
Violation of Employment Contract – If termination breaches contractual terms such as notice period, compensation, or agreed conditions.
Unlawful Grounds of Termination – Termination due to discrimination (gender, caste, religion, disability, union activity, maternity, etc.).
Retaliation / Victimization – Dismissing an employee for filing a complaint, whistleblowing, or participating in union activities.
Absence of Due Process – No show-cause notice, no domestic inquiry, or denial of opportunity to be heard.
Statutory Protection Violations – Example: Dismissal of a pregnant woman during maternity leave (Maternity Benefit Act, 1961).
3. Legal Framework in India
Industrial Disputes Act, 1947 – Protects “workmen” from unjust dismissal; requires retrenchment compensation, notice, and permission for closure/lay-off.
Shops and Establishments Acts (State Laws) – Provide protection to non-workmen employees regarding termination and notice.
Contract Act, 1872 – Wrongful dismissal can lead to breach of contract claims.
Constitutional Safeguards – Articles 14, 16, and 21 protect against arbitrary state action in public employment.
4. Remedies Available to Wrongfully Terminated Employees
Reinstatement with Back Wages (common in industrial disputes).
Compensation/Damages for breach of contract.
Compensation for Mental Agony in cases of harassment or victimization.
Constitutional Remedies (Writ petitions in public employment cases).
5. Key Judicial Pronouncements (Case Law)
Punjab Land Development & Reclamation Corporation Ltd. v. Presiding Officer, Labour Court (1990)
The Supreme Court held that “retrenchment” covers every kind of termination except punishment for misconduct. Hence, termination without complying with retrenchment provisions (notice, compensation) is illegal.
Mohan Lal v. Management of Bharat Electronics Ltd. (1981)
The Court held that termination without giving a proper hearing and following the principles of natural justice is wrongful.
D.K. Yadav v. J.M.A. Industries Ltd. (1993)
The Supreme Court ruled that termination without reasonable opportunity of being heard violates Article 21 (Right to Livelihood) of the Constitution.
Nehru Yuva Kendra Sangathan v. Mehbub Alam Laskar (2008)
The Court held that even contractual employees cannot be terminated arbitrarily if procedure laid down in the contract is not followed.
Air India Statutory Corporation v. United Labour Union (1997)
Termination of workers without considering their statutory rights and protection was struck down. The Court emphasized the welfare and security principle.
Shamsher Singh v. State of Punjab (1974)
In public employment, termination by way of “camouflage” (i.e., showing it as termination simpliciter but actually punitive) was held invalid.
State Bank of India v. Sundara Money (1976)
Even termination of a temporary employee without following retrenchment rules under the Industrial Disputes Act was held illegal.
6. Principles Derived from Case Law
Natural Justice – No employee can be terminated without due process (hearing, notice, inquiry).
Substance over Form – Even if the employer calls it “simple termination,” courts can look into the real reason.
Equality and Fairness – Arbitrary or discriminatory termination violates Articles 14 and 21.
Statutory Compliance – Retrenchment, layoff, or dismissal must follow provisions of the Industrial Disputes Act.
Contractual Adherence – Employers are bound by the contract terms in private employment.
7. Conclusion
Wrongful termination under Employment Law is not merely about losing a job but about violation of fairness, due process, and statutory rights. Courts in India have consistently protected employees from arbitrary dismissal, recognizing the right to livelihood as a fundamental right and balancing employer authority with worker dignity.
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