During regular course, often a company employs number of employees on certain terms and conditions which are incorporated in the letters of appointment issued to them. However, during course of running the administration, it has been observed that some of the fresh entrants suffer from inefficiency and their performance level is not satisfactory to the management. In such a situation, it becomes imperative to get rid of such employees. Effective clauses need to be incorporated in the letter of appointment as per prevalent labour laws in India vesting right in the management to cease the employer-employee relationship on consideration of poor performance of the employee. There can be no iota of doubt that the company is entitled to engage the services of a person either on contract basis or on probation besides being other mode of appointment.
If a person is employed on contract basis, in such circumstances the service of the person may be terminated on expiry of the specific period of contract of employment. Termination of the service of the said employee as result of the non-renewal of contract of employment between the company and the employee concerned on its expiry will not attract the provisions of retrenchment and the management has the right to terminate the service of the employee on expiry of the specific period of employment.
Moreover, the management may appoint an employee on probation. Probationer means an employee who is provisionally employed to fill a permanent vacancy or post. The person, who is on probation, is kept on trial regarding his suitability for permanent appointment and is liable to be discharged on being found to be unsuitable for permanent absorption. Power to put the employee on probation for watching his performance and the period during which the performance is to be observed is the prerogative of the management. During the period of probation the suitability of the appointee has to be seen. If his services are not satisfactory which means that he is not suitable for the job, then the management has a right to terminate the service as a reason thereof. A probationer has no right to be confirmed merely on the expiry of probation period. The management may terminate the service of a probationer on expiry of the period of probation or extended period of probation on consideration of his unsatisfactory performance during the period of probation.
However, the under mentioned clause may be incorporated in the appointment to be given to the probationer:
“You will be on probation for a period of xxx month/ year from the date of your joining and the said period of probation will be liable to be extended for a further period of yyy month/ year at the sole discretion of the management depending on the assessment of your overall performance. Unless confirmed in writing, you will continue to be on probation. During the probationary period your service may be terminated without any notice and without assigning any reason whatsoever.”