Team, I would like to discuss a small situation in one of the organizations I worked & would really like to have your views on the employee & employer course of action.....

As per the Employment Contract/ Appointment letter in this xyz company....either party have to give 3 months' notice while terminating/ending the contract or salary in lieu of the period not served.

Situation:Employee resigns & he is ready to serve 3 months notice as per contract and as per resignation letter ........ organization decides to accept his resignation & waive off the balance notice period. While relieving him from services with immediate it still mandatory for the organization/employer to pay him for the notice period? As the employee was ready to serve the notice but the organisation didn't allow him to do so !!!

Which clause should we refer to for the same as per the Indian contract act?

Plz suggest


From India, Calcutta
The employee has submitted resignation. Then, why should the company pay him notice pay? It is for the employee to pay it and as an understanding, or perhaps the employer has got substitute employee, the employer relieved him. While relieving, the employer is not bound top pay any notice pay. Had it been like employer terminating the service of the employee with immediate effect that the employer should pay 3 months notice pay.

From India, Kannur
As per the contract, employee has to give 3 months notice before resigning. The employer is free to relieve him immediately without adhering to the notice period.
Employee is not eligible for any notice pay from the employer.
If employer wanted to terminate the services of the employee, employer has to give three months
notice or notice pay. Normally, notice pay is given and relieved immediately by the employer

From India, Madras
If employer agrees to release earlier than the stipulated notice period, the employee will be paid till the date of relieving only, not upto the end of notice period. Pls check the conditions of appt letter.
From India, Lucknow
The employer doesn't need to pay for the notice period as the onus of separation doesn't fall on him. Since the separation was initiated by the employee, the employer has every right to release him with immediate effect without giving any notice period pay. There is absolutely no second thoughts about it.

From India, New Delhi
Re: notice period payout

In my humble opinion, the situation is slightly different.

1. The employee in all fairness gave 3 months notice after convincing his prospective employers that he needs to give 3 months notice to his current employer and accordingly they would have given him a joining time.

2. Please do not expect him to go back to prospective employer and say he wishes to join from tomorrow for which they may not be amenable and imagine the loss of face he would encounter with the new management and for all we know they may not want him before 3 months.

2 a. He may be planning to go abroad after 3 months -- so why should he lose out on his remuneration.

3. If the employee concerned has specifically mentioned in his letter of resignation that he wishes to be relieved after the expiry of his notice period -- the employer is bound to pay him for the notice period -- I think there are case laws to this effect (vaguely remember).

4. Ideal would be to check with the employee whether he is ok with early release and/or is he in anyway at a loss for such an action of the Management.

5. Management cannot have best of both worlds -- thereafter dont crib that employees do not serve notice periods. For the sake of equanimity atleast give a fair chance. One is dealing with human beings and treat them as one if we all want prospering industries. Fair play is the key word.


From India, New Delhi
It seems to be genuine when the employee has given one month notice whereas the employer intends to relieve him before the notice period ends he shall be compensated for his loss because an employee on notice period has every right of withdrawing his resignation before the date is due as was decided in Shambhu Murari Sinha Vs. Project & Development India Ltd in which it was held that "unless controlled by condition of service or the statutory provisions, the retirement mentioned in the letter of resignation must take effect from the date mentioned therein and such date cannot be advanced by accepting the resignation from an earlier date when the employee concerned did not intend to retire from such earlier date."

Therefore, it may be interpreted that if an employee puts his papers and seeks one month time to get relieved but the employer wants to advance the date of relieving then it shall be done after paying the employee the notice pay from the side of employer. A text of the aforesaid case is attached for reference.



From India, Kannur

Attached Files
File Type: doc SHAMBHU MURARI SINHA V.doc (39.0 KB, 348 views)

Sub: Notice period payout
Thank you very much Mr. Madhu for quoting all the relevant judgements of the Supreme Court, where it has been clearly laid out a) the employee can withdraw the resignation prior to the notice period is over, unless the terms of service or statutory provisions clearly states. b) the salary for the entire notice period is payable to the employee even in case the employer relieves him earlier.
Mr. Madhu -- this has been very elucidating.
I would also request you to kindly let me have your views on "CONTRACT SPECIFIED DIFFERENT NOTICE PERIOD FOR EMPLOYER AND EMPLOYEE' dated 29th October, 2010.
S. Rajaram

From India, New Delhi
Under normal circumstances notice period should be the same for employee and the employer. Regards, Madhu.T.K
From India, Kannur

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