When a worker/employee either individually or collectively is found guilty of any violation of the employment contract, the employer can take the following actions:

The employer may initiate disciplinary action against the worker by serving a show cause notice. The worker is required to reply to the notice within stipulated time with relevant facts and proof, failing which rigorous action can be taken.

The employer can insist and can grant leave to the worker as a matter of warning. The intention of this strategy is a worker will not be allowed to join with other workers for the time being.

As a matter of punishment for violation of employment contract, the employer can transfer a worker to another department, unit, or place of work, where it will be inconvenient for the worker to work, so that after some time the worker leaves the organisation on his/her own.

If a worker is found guilty of a violation of the employment contract and the employer does not want to take hard action, the employer may demote the worker, or may start to keep records of performance in a confidential report for the future purpose of deciding further promotions, increments and other benefits.

The biggest avenue available to an employer is termination of the services of an employee. Termination can be done in accordance with the provisions of Industrial Disputes Act. Where the Standing Orders are in operation in the concerned establishment, termination shall be in accordance with such Standing Orders. If an appointment letter/contract of employment contains provisions relating to termination, it must be observed strictly.

Dismissal occurs when the employer strikes the name of the employee from the rolls for the commission of a ‘serious misconduct’ in violation of the contract. The employer has to observe the conditions precedent to dismissal.

The employer can suspend any worker during domestic enquiry conducted against such an employee for an alleged violation. However, the employee has to be given subsistence allowance during such suspension until the domestic enquiry ends. If the enquiry finds the worker guilty, employment can be terminated according to the seriousness of the ‘misconduct’.

Under the Indian Contract Act of 1872, when a contract has been broken, the party who suffers by such breach is entitled to receive, from the party who has broken the contract, compensation for any loss or damage caused (which naturally arose in the usual course of things). For example, when a worker has agreed not to divulge trade secrets or information relating to employer’s business to third party and then subsequently breaches this secrecy clause, the employer is entitled to seek damages from the employee.

The employer can raise a dispute and can approach the appropriate authorities established under the Act for the settlement of the dispute. It can take actions in accordance with the directions given by such authorities. In dealing with illegal strikes by the employees, the employer will be liable as a principal offender under the Penal Code, if “he assists, abets, aids, enables another in the commission of the offence or procures that other to commit the offence”.