Questions & Answers
Computation of arbitrary dismissal upon termination
Good afternoon Hari,
I have been given a termination letter by my company and asked to leave without serving the notice period.
The company said they will pay me for the 1 month notice period salary and extra 1-month salary. As per the law, I'm supposed to get 1 month notice period salary and another 2 months salary, right?
Just to let you know, I am on an unlimited contract. The notice period mentioned in the contract is 1 month.
Dear Sir/ Madam,
Thank you for reaching out to me on this.
Many people have the confusion that they should receive 3 months salary straight away as compensation when terminated wrongfully.
However, the law stated, "up to three months salary as compensation".
The compensation is not 3 months by default but up to three months. In substance, there exists a discretion upon the court to award 1,2 or 3 months salary as compensation.
In usual cases, the court awards 1 month's salary as compensation, hence I would advise if you wish to settle for this amount, it's a good settlement.
I would always recommend to amicably settle the dispute instead of involving in lengthy litigation, especially when there is no guarantee for receiving 3 months salary.
I trust you will find this helpful.
Regards,
Hari Wadhwana
