Approval Hierarchies in Termination Decisions

1. Meaning

Approval hierarchy in termination decisions means the system under which a proposed termination, dismissal, removal, or discharge of an employee must pass through one or more levels of authority before it becomes legally effective.

In an organisation, the hierarchy may look like:

Reporting Manager → HR Department → Disciplinary Authority → Senior Management/Board → Competent Authority → Final Termination Order

The exact hierarchy depends upon the employee's contract, service rules, standing orders, disciplinary regulations, statute, and the nature of the organisation.

The important legal principle is that the authority approving or passing a termination must have legal or contractual authority to do so. A higher-ranking officer cannot automatically exercise every disciplinary power merely because that officer is higher in the organisational hierarchy. The Supreme Court has repeatedly examined whether the person imposing punishment was the competent disciplinary authority.

2. Why Approval Hierarchies Are Important

Approval hierarchies serve several purposes:

A. Prevent arbitrary termination

A manager should not ordinarily be able to terminate an employee merely on personal dissatisfaction.

A hierarchy requires the decision to be examined by appropriate authorities.

B. Ensure compliance with service rules

Different organisations prescribe different disciplinary authorities for different levels of employees.

For example:

The actual authority must come from the applicable rules rather than simply from organisational seniority.

C. Provide procedural safeguards

Before dismissal for misconduct, the employee may be entitled to:

• charge-sheet;
• opportunity to reply;
• departmental inquiry;
• evidence and cross-examination;
• inquiry report;
• opportunity against adverse findings where required;
• consideration by the disciplinary authority;
• appropriate punishment order;
• appellate remedy.

D. Create accountability

Approval levels create a record showing:

1. who recommended termination;
2. who examined the recommendation;
3. who approved it;
4. who actually imposed the penalty; and
5. whether the person had statutory authority.

3. Difference Between Recommendation, Approval and Final Authority

This distinction is extremely important.

Recommendation

A manager may recommend:

"The employee's services should be terminated."

This does not necessarily mean that termination has legally occurred.

Approval

A higher authority may examine the recommendation and approve it.

But approval alone is not necessarily equivalent to the lawful exercise of disciplinary power. The relevant rules must determine what approval means.

Final termination order

The legally competent authority must issue the order where the applicable rules require the disciplinary authority itself to impose the penalty.

Therefore:

Recommendation ≠ Approval ≠ Final disciplinary order

The legal effect depends on the governing rules.

4. Competent Authority

The expression "competent authority" is central to termination decisions.

It generally means the authority legally empowered under the applicable:

• statute;
• service rules;
• standing orders;
• employment regulations;
• delegation of powers;
• appointment conditions; or
• contract.

In one Supreme Court decision concerning disciplinary powers, the Court examined the relevant delegation manual and concluded that the expression "Competent Authority" could include an authorised disciplinary authority where the rules so provided.

Thus, an organisation cannot simply argue:

"The officer was senior, therefore he could dismiss the employee."

There must be a legal source of authority.

5. Approval by a Higher Authority Does Not Always Cure Lack of Jurisdiction

Suppose:

• Employee A can be dismissed only by the General Manager.
• A Department Manager issues the dismissal order.
• The Managing Director subsequently approves it.

The question is whether the later approval validates the original order.

Not necessarily.

If the governing rules require the General Manager to exercise the disciplinary power, the action of an unauthorised officer may be legally defective.

The court will examine:

1. Who was the appointing authority?
2. Who was the disciplinary authority?
3. Who was authorised to impose dismissal?
4. Was there a valid delegation?
5. Did the delegation cover dismissal?
6. Was the approval given before or after the order?
7. Did the rules permit ratification?
8. Was an appeal available to the employee?

6. Separation Between Disciplinary and Appellate Authorities

A particularly important principle is that the disciplinary authority and appellate authority should ordinarily remain distinct where the service rules provide an appeal.

This is because an employee should have a meaningful opportunity to challenge the punishment.

For example:

Disciplinary Authority → Dismissal

then:

Appellate Authority → Appeal against dismissal

If the appellate authority itself passes the original dismissal order, the employee may lose the ordinary statutory appellate remedy.

The Supreme Court discussed this problem in Balbir Chand v. Food Corporation of India Ltd., observing that ordinarily an appellate authority should not itself impose the punishment where doing so would deprive the employee of the right of appeal.

7. Termination and Natural Justice

An approval hierarchy cannot be used to bypass natural justice.

Where termination is punitive and based upon misconduct, the employee generally must receive the procedural protection required by the applicable law.

The fundamental requirements include:

• notice of allegations;
• reasonable opportunity to defend;
• impartial inquiry where required;
• consideration of evidence;
• reasoned decision;
• legally competent decision-maker.

In Khem Chand v. Union of India, the Supreme Court emphasised the constitutional procedural protection available to government servants facing dismissal and held that failure to provide the required opportunity could invalidate the dismissal.

8. Article 311 and Government Employees

For certain government employees, Article 311 of the Constitution provides important safeguards.

Article 311 broadly protects a person holding a civil post under the Union or a State from dismissal, removal or reduction in rank except in accordance with the constitutional requirements.

Consequently, a departmental approval hierarchy cannot override constitutional protection.

The authority must consider:

• whether the officer is constitutionally protected;
• whether the disciplinary authority is competent;
• whether an inquiry is required;
• whether an exception to inquiry applies;
• whether the prescribed procedure has been followed.

9. Private Employment

In private employment, approval hierarchies normally arise from:

• employment contracts;
• HR policies;
• standing orders;
• disciplinary codes;
• company regulations;
• board resolutions;
• delegation-of-authority policies.

For example:

Team Leader

↓ recommends

HR

↓ examines

Department Head

↓ approves

Competent Disciplinary Authority

↓ issues

Termination/Dismissal Order

The contractual and statutory framework determines whether each stage is mandatory or merely internal.

10. Approval Under Section 33(2)(b) of the Industrial Disputes Act

A particularly important statutory example historically arose under Section 33(2)(b) of the Industrial Disputes Act, 1947.

Where the conditions of that provision applied, an employer taking disciplinary action against a workman during the pendency of industrial proceedings was required to comply with the statutory requirements and seek approval from the appropriate authority.

The Supreme Court explained that such approval is not a meaningless formality.

In Jaipur Zila Sahakari Bhoomi Vikas Bank Ltd. v. Ram Gopal Sharma, the Court held that when approval is refused, the dismissal/discharge does not become legally effective and the employee is treated as continuing in service.

This demonstrates an important concept:

Statutory approval can be a substantive legal condition for the effectiveness of termination.

11. What Does the Approval Authority Examine?

The approval authority may have to examine matters such as:

1. Whether a proper domestic inquiry was conducted.
2. Whether principles of natural justice were followed.
3. Whether there was prima facie evidence of misconduct.
4. Whether the action was bona fide.
5. Whether the employee was victimised.
6. Whether the action constituted an unfair labour practice.
7. Whether statutory requirements were complied with.
8. Whether wages or other required payments were made.
9. Whether the employer approached the authority within the prescribed time.

These principles were authoritatively discussed in Lalla Ram v. Management of D.C.M. Chemical Works Ltd.

12. Approval Does Not Mean Automatic Confirmation

An important distinction is:

Internal approval

versus

Statutory approval

Internal approval may merely represent organisational consent.

Statutory approval, however, may be a legal requirement before the termination becomes effective.

Therefore, HR policies should clearly specify whether an approval is:

• mandatory;
• administrative;
• supervisory;
• disciplinary;
• statutory; or
• appellate.

13. Case Law

Case 1: Parshotam Lal Dhingra v. Union of India

Principle: The authority empowered to impose penalties must be determined according to the applicable service rules.

The case concerned termination/removal of a railway employee and examined the statutory framework governing competent authorities and penalties. The Supreme Court analysed the relevant railway rules concerning dismissal and removal.

Importance

The case establishes the broader principle that termination of a government employee cannot be divorced from the rules governing disciplinary authority.

Case 2: Khem Chand v. Union of India

Principle: Procedural safeguards preceding dismissal are fundamental.

The Supreme Court considered dismissal of a government servant and emphasised the importance of the required opportunity before dismissal. The absence of the required procedural protection rendered the dismissal legally defective.

Importance

An approval hierarchy cannot substitute for natural justice.

Case 3: Surjit Ghosh v. Chairman & Managing Director, United Commercial Bank

Principle: The authority exercising disciplinary power must be considered in light of the applicable disciplinary framework, particularly where an employee has a right of appeal.

The case is important for the distinction between the authority imposing punishment and the authority hearing the appeal.

It was subsequently discussed in Balbir Chand v. Food Corporation of India Ltd.

Importance

The case supports the principle that organisational hierarchy should not destroy an employee's appellate remedy.

Case 4: Balbir Chand v. Food Corporation of India Ltd.

Principle: An appellate authority should ordinarily not itself impose the original punishment where doing so would deprive the employee of the right to appeal.

The Supreme Court examined whether the Managing Director could impose disciplinary punishment where the disciplinary structure contemplated another competent authority and an appellate remedy.

Importance

This is directly relevant to approval hierarchies.

A higher authority should not automatically take over the disciplinary function merely because it occupies a higher position.

Case 5: S. Bhaskar Reddy v. Superintendent of Police

Principle: The authority imposing a major penalty must be the competent disciplinary authority under the applicable rules.

The Supreme Court considered a situation where the question arose whether the borrowing authority had the power to impose dismissal. The Court's discussion emphasised the importance of identifying the authority competent under the applicable rules.

Importance

A person who supervises an employee is not automatically authorised to dismiss that employee.

Case 6: National Institute of Technology v. Pannalal Choudhury

Principle: A termination/dismissal order passed by an authority lacking the prescribed disciplinary power can be invalid.

The case involved a dismissal order passed by the Principal and Secretary, with the question being whether that authority possessed the necessary power under the governing framework.

Importance

The case reinforces the rule:

Power to appoint or administer is not necessarily the same as power to dismiss.

Case 7: Lalla Ram v. Management of D.C.M. Chemical Works Ltd.

Principle: In proceedings concerning statutory approval of dismissal, the authority examines whether the domestic inquiry and dismissal satisfy the required legal conditions.

The Supreme Court identified several matters relevant to approval, including proper domestic inquiry, prima facie evidence, bona fide action, absence of victimisation and compliance with statutory requirements.

Importance

This is one of the leading cases on the legal significance of approval of dismissal.

Case 8: Jaipur Zila Sahakari Bhoomi Vikas Bank Ltd. v. Ram Gopal Sharma

Principle: Where statutory approval is required, refusal of approval means the dismissal/discharge does not legally become effective.

The Supreme Court explained that the dismissal order remains incomplete/inchoate until the required approval is obtained. If approval is refused, the employee is treated as continuing in service.

Importance

This is particularly important for understanding the difference between:

"Termination order passed"

and

"Termination legally effective."

14. Recent Judicial Approach: Competent Authority Must Have a Source of Power

Recent judicial decisions continue to emphasise that disciplinary authority must be traceable to the applicable regulations.

For example, in Surekha Domaji Bele v. Executive Engineer, Testing Division, MSEDCL (2026), the Supreme Court considered the question of disciplinary authority in the context of a corporation and emphasised that the disciplinary authority is determined by the applicable service regulations rather than by a simplistic assumption that the dismissing authority must always be identical to the appointing authority.

This is an important modern clarification:

Appointing authority, disciplinary authority and approving authority may be different persons, depending upon the governing rules.

15. Typical Approval Hierarchy in a Corporate Termination

A properly structured corporate disciplinary process may be:

Stage 1 — Complaint/Incident

An allegation of misconduct is reported.

↓

Stage 2 — Preliminary assessment

HR or management determines whether the complaint requires investigation.

↓

Stage 3 — Investigation

Relevant evidence is collected.

↓

Stage 4 — Charge-sheet/show-cause notice

The employee is informed of the allegations.

↓

Stage 5 — Employee's defence

The employee gets an opportunity to respond.

↓

Stage 6 — Domestic inquiry

Where required, an impartial inquiry is conducted.

↓

Stage 7 — Inquiry report

The inquiry officer records findings.

↓

Stage 8 — Disciplinary authority

The competent disciplinary authority independently considers the material.

↓

Stage 9 — Approval

Where the rules require higher-level approval, the decision goes to the prescribed approving authority.

↓

Stage 10 — Final order

The competent authority issues the final termination/dismissal order.

↓

Stage 11 — Appeal

The employee may approach the appellate authority where provided.

16. Can a Higher Authority Change the Punishment?

It depends on the governing rules.

A higher authority may sometimes:

• approve the proposed punishment;
• modify the punishment;
• reject the recommendation;
• remit the matter for reconsideration;
• exercise appellate/revisional jurisdiction.

But the authority must act within the powers granted by the relevant rules.

It cannot assume jurisdiction merely because it occupies a higher organisational position.

17. Role of HR in Approval Hierarchies

HR generally performs an important procedural role, but HR is not automatically the disciplinary authority.

HR may:

• verify the employee's service record;
• check applicable policies;
• prepare disciplinary documentation;
• coordinate inquiry proceedings;
• advise management;
• ensure consistency of punishment;
• maintain records;
• communicate the final order.

However, the final decision must be taken by the person authorised under the applicable legal or organisational framework.

18. Algorithmic and Digital Approval Hierarchies

Modern organisations increasingly use HR software to route termination decisions.

For example:

Manager submits termination recommendation

→ HR software checks policy

→ HR reviews

→ Legal reviews

→ Senior manager approves

→ Competent authority signs

→ Employee receives termination notice

Technology can assist the hierarchy, but it cannot create legal authority where none exists.

An automated workflow saying:

"Approved by Senior Manager"

does not necessarily establish that the Senior Manager had legal power to dismiss the employee.

The organisation must therefore ensure that the digital approval chain corresponds with the legally prescribed authority structure.

19. Common Legal Problems in Approval Hierarchies

1. Wrong authority passes termination order

The employee is dismissed by an officer who lacks disciplinary jurisdiction.

2. Approval obtained after termination

The employer terminates first and attempts to obtain approval later, even though the rules require prior approval.

3. Appellate authority becomes original authority

A senior authority imposes the punishment and thereby deprives the employee of the ordinary appeal.

4. Delegation is unclear

The employer cannot prove that disciplinary powers were validly delegated.

5. HR signs the order without authority

HR may have prepared the documentation but may not possess statutory disciplinary power.

6. Mechanical approval

The higher authority merely signs the recommendation without independently applying its mind.

7. Natural justice ignored

The approval hierarchy is completed but the employee was never given a proper opportunity to defend himself.

20. Judicial Review of Approval Decisions

Courts generally examine whether:

• the authority had jurisdiction;
• the correct procedure was followed;
• natural justice was observed;
• the decision was based on relevant material;
• the authority acted bona fide;
• there was discrimination or victimisation;
• the punishment was legally permissible;
• the applicable statutory requirements were satisfied.

The court does not ordinarily substitute itself for the disciplinary authority on every factual issue. However, where there is jurisdictional error, procedural illegality, violation of natural justice or perversity, judicial intervention may become appropriate.

21. Key Principles

The entire concept can be remembered through these rules:

Rule 1 — Authority must come from law or valid delegation

A higher position alone does not confer disciplinary jurisdiction.

Rule 2 — Recommendation is not termination

A manager's recommendation does not necessarily terminate employment.

Rule 3 — Approval may be legally significant

Where legislation requires approval, termination may remain ineffective until approval is obtained.

Rule 4 — Natural justice cannot be bypassed

A hierarchy cannot cure denial of a fair hearing.

Rule 5 — Disciplinary and appellate roles should be distinguished

The original punishment should ordinarily be imposed by the prescribed disciplinary authority so that the employee can exercise the available appeal.

Rule 6 — Service rules control

The exact answer depends upon the applicable service regulations, standing orders, contract and statutory framework.

Rule 7 — Digital approval cannot replace legal authority

An electronic workflow is only a mechanism for exercising authority; it does not itself create authority.

22. Short Example

Suppose a company employs Ravi as a Senior Executive.

The company's disciplinary rules state:

• Department Head may issue warnings.
• HR may initiate disciplinary proceedings.
• General Manager is the disciplinary authority for dismissal.
• Managing Director is the appellate authority.

Ravi is accused of serious misconduct.

The Department Head recommends dismissal.

HR conducts the required process.

The General Manager examines the inquiry and passes the dismissal order.

Ravi appeals to the Managing Director.

This is a proper hierarchy because:

Recommendation → Investigation → Disciplinary Authority → Dismissal → Appellate Authority

But if the Managing Director directly dismissed Ravi as the original authority, despite the rules assigning dismissal power to the General Manager, the legality of that action could be challenged, particularly if doing so deprived Ravi of the prescribed appeal.

This principle is consistent with the reasoning reflected in cases such as Balbir Chand, S. Bhaskar Reddy, and National Institute of Technology v. Pannalal Choudhury.

23. Conclusion

Approval hierarchies in termination decisions are designed to ensure that termination is not arbitrary, unauthorized, or procedurally unfair. The most important question is not simply "Who is the most senior person in the organisation?" but "Who is legally authorised to recommend, approve, impose, review and hear an appeal against the termination?"

Indian employment jurisprudence establishes that:

Competent Authority + Proper Procedure + Natural Justice + Valid Approval + Reasoned Decision = Legally Sustainable Termination

Conversely:

Unauthorised Authority + Procedural Defect + Denial of Natural Justice = Vulnerable/Invalid Termination

The cases of Parshotam Lal Dhingra, Khem Chand, Surjit Ghosh, Balbir Chand, S. Bhaskar Reddy, National Institute of Technology v. Pannalal Choudhury, Lalla Ram, and Jaipur Zila Sahakari Bhoomi Vikas Bank v. Ram Gopal Sharma provide a strong foundation for understanding this subject.