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Termination of Service in Human Resources

By HWA | Publish On: April 30, 2011 | Posted In:

Human Resources

According to the popular saying, “all the good things should come to a stop”, and so does employment. After the long process of recruitment, selection, training, working and career development naturally, the employee moves on. The process of ‘moving on’ or in terms of employment can mean different things under different circumstances.

  • Resignation of the employee
  • Retirement upon reaching an agreed predetermined age
  • Retrenchment due to downsizing or redundancy
  • Dismissal due to gross misconduct or poor performance or non-compliance
  • Expiry of fixed term contract
  • Expiration of contract due to the interaction with outside forces such as operation of law or death, illness or imprisonment.

Termination of Service in Human Resources

Issues with Resignation:

  • High investment in training
  • Feedback of reasons during exit interview
  • Extension or shortening of notice period
  • Restriction to further access of sensitive information
  • Leaving report – used as work reference for reference
  • Collection of Security cards, tags or credit cards
  • Final settlement with the candidate

Issues with Retirement:

  • Retirement age in the state – national differences
  • Health related issues due to age
  • High cost of pension payments
  • Career opportunities for younger staff

Issues with Retrenchments:

  • Downsizing due to automation of processes
  • Layoff due to fall in the demand for the product
  • Opposition from trade unions
  • Loss of public confidence
  • Fall in morale of remaining employees, stress and job-insecurity

Issues with Dismissal:
An employee is dismissed if the employer terminates the contract of employment or the fixed term contract expires and is not renewed

  • Redundancy – job has ceased to exist
  • The service of the employee is no longer required
  • Gross misconduct, negligence and poor performance of the employee for a prolonged period of time

Industrial Relations Act of 1967 states that employees depending on the income from jobs for their survival should not be at the mercy of uncaring employers. The legislation introduced to protect the job-security of employees. There are procedures that needed to be complied both for employers and employees who want to dismiss and who want to file against, respectively with the department of Industrial Relations.

  • Employee files written claim within 60 days of dismissal
  • A meeting between both the parties is facilitated by the Industrial Relations Officer.
  • The dispute is settled when reinstatement or compensation takes place
  • Unsettled cases are taken to the Industrial Court for arbitration, which decides whether the dismissal was just or unjust.

Compensation for unlawful/unfair dismissal

  • General principle is that one month’s pay for every year in service and back pay from the date of dismissal till the date of judgment.
  • In some cases employer has been ordered to pay future wages up to the date of retirement under contract of employment.

For more details you can visit our websites at and
This article is in continuation with our previous articles on Human Resource Management which include Human Resource Development, Performance Appraisal, Compensation & Rewards, Recruitment & Selection

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