Saswatabanerjee
Partner - Risk Management
Tsivasankaran
Consultant
Sanjeev.Himachali
Hr & Od Consultant
Jhuma Tiwade
Manager- Human Resources
Pani Ram Arya
Human Resources
+9 Others

Dear Seniors,
I got an issue with one of our employee. She has given resignation due to her own issues and informed that she will serve the notice period. but, as she has given resignation on her own, we relived her from duty today itself. now she is asking to pay 1 month salary for notice period. Please suggest me what we can do in this case.
From India, Kakinada

Hi,
The employee is willing to serve the notice but you have asked her to go so it is your obligation to pay her. Please check the resignation clause of appointment letter of your company and act accordingly.
From India, Mumbai
She has an issue, if she stated in her esignation that she will resign withe effect from afuture date which may be one month away B.Saikumar Mumbai. 09930532927
From India, Mumbai
Normally the clause reads like this

" Your services may be terminated by giving one month's notice or one month's pay in lieu of notice. You may resign from the services by giving one month's notice or one month's pay in lieu of notice"

PURPOSE:

If the management terminates suddenly, the employee will face hardship and to compensate this hardship to certain extent, 30 days notice or 30 days pay is given.

Similarly, whn an employee resigns, the Management will face the hardship of not having a person for that job and also need to spend money to manage the same job by incurring OT etc.To compensate the manegement, 30 days notice is prescribed and to pursuade employees to be sround for 30 days, notice pay is also included

Logically, bot parties can say that they do not want the compensation.

PRESENT CASE

The employee opts to resign and she gives a letter saying that she would like to be relieved on a specific date.Her intention is to leave the company and there is no hardship created to her by the Company. It is for the management to take a decision to relieve her either on the same day or on any day during the notice period.. We need to understand the purpose for such clauses and apply the logic.

Some may not agree with my argument and there had not been any case law either on this subject( To my knowledge) But I followed this with this logic for 35 years and wherever I had worked, we followed this logic.

T Sivasankaran
From India, Chennai
You need to see the relevant clauses in appointment letter, standing orders, hr manual (assuming given to emoloyees) and terms of employment if any. Some companies have a clause saying management has a right to accept resignation with or without notice, at their choice. If you have a clause to that effect, then you can relieve her and not pay

In any other case, younhave to pay notice period salary even if you do not want her in the office. If you wish to take a humane view and if you consider your reputation in job market (and also you may need to interact with the same person in another company on professional basis) then you must pay for the notice period. She may face financial hardships If she loses 1 months salary. It's not a good idea to have someone leave with a bad idea of your company when it could be avoided.

Likewise, the above arguments do not apply if she was asked to leave for fraud, shoddy work or any matter of dispute that makes it impossible for her to workin the office.

There is a practice of gardening leave in western economies that apply to senior employees. It's a period for which they get paid, can't work for anyone else or join next job, but are not wanted in office (confidentiality issues). At the same time available for anything the company might need. Unfortunately few companies follow that in india
From India, Mumbai
Hi, in my opinion you have to consider the clause of appointment letter only. regards, Pani Ram Arya
From India, Gurgaon
in this case the employee has resigned on her own and not terminated by the employer. Therefore it is the discretion of the employer to either make her work the notice period or releive her immdediately. the employee can not claim notice pay in lieu of the notice period. if the empoyer had terminated her, she would have been eligible for notice pay...
From India, Bangalore
Ms.Rupawati
Since the employee has expressed her intention to resign from 21 July 2012 but you have relieved her immediately, it is advisable, both on technical grounds as well as on grounds of administrative prudence, to pay her one month salary and end the matter on win-win situation.
B.Saikumar
mumbai
From India, Mumbai
Dear Seniors,
In our appointment letter we have mentioned that " your service may be terminated at any time by one month's notice in writing by either side". So, now she is showing that point and asking us to pay the 1 month salary for notice period otherwise she will proceed legally.
Is that point which we mentioned in the appointment letter is legally strong on Employee side? Please suggest me.
From India, Kakinada
But she has not been terminated. She has resigned. If she has resigned, its up to the employer make har work for the full notice period or releive har immediately. If she was terminated by the employer, she would be eligible for notice pay.
From India, Bangalore
As I understand, the employee has submitted her resignation and as per terms of her appointment she has given to the Company the required Notice and has agreed to serve out the said Notice Period.
The management, however, decides to accept her resignation with immediate effect and relieves also with immediate effect.
Under the circumstances the Company is obliged to pay her salary in lieu of the the shortfall in the Notice period.
Best Wishes,
Vasant Nair
From India, Mumbai
Normally notice of one or two months is insisted by the employer only to ensure that handing over of charge and smooth take over by new employee takes place.This notice period can be waived at the discretion of the management.Similarly employee has an option to either give notice or pay one/two month's pay in lie of notice as per terms of employment. If any employee give a notice of one month and it is accepted by the management, the term of employment comes to an end . Employee can claim wages only if it is a termination by the employer.Giving one month's notice is a requirement and acceptance of the resignation is management's prerogative. Of course one has to read the employment rules and more particularly the terms and conditions in the appointment letter to take a correct legal stand.
Gsrao
From India, Raurkela
Hi,

Reply on the subject by Mr Shivshankaran is most appropriate and practically executable.

But the question is whether the employee has legal right to serve full notice period & get paid till the expiry or not?

Under Sec-30 of Delhi shops & Estd Act, 30 days minimum notice is required from both sides after completing 3 months in service.

The explanation of this section goes like that "If one party has served notice, the other party is not bound to bear the party serving notice till the expiry of notice."

In present case employee can be relieved as per the wish of employer on or before the expiry of notice and the employee can't insist on serving full notice period. (Dass Studios Vs RK Baweja, labour Court, Delhi, 1972 (1) ILR 856, Del HC)

However even in such a case it is always better to have a clear policy as per the law in terms of appointment or certified Model standing orders so as to avoid any dispute with the employee since every leaving employee is an ambassador of your company.

Regards

Vikas
From India, Mumbai
This case is more then clear. Dont make games, pay her salary in the right hand and give her a fairwell. or let her to complet the notice period. nd u all r advised to ignore the advices of traditional ppl like tsawsnkaran, we should follow modern approches and we should be human friendly in order to utilize their resources in the v best interest of all orgs..
From United Arab Emirates, Dubai
Farewell*..........................................................................................................................................
From United Arab Emirates, Dubai
The employer cannot eat the cake and have it too when the terms of employment are reduced to writing. It cannot be that t he employer does not want to terminate the service of an employee to avoid notice pay and does not want to pay a month's wages to an employee willing to serve the notice period by accepting her resignation immediately. It cannot adopt "heads I win, tails you loose" policy. when there is written down policy. It will be opposed to principle of equity embeded in the contract and the courts may examine whether the action of the employer conforms to this principle. Therefore it is better to pay her a month's salry and as HR, it is always better to achieve a "win-win'' situation in employer-employee relationship.
B.Saikumar
HR & labour law Advisor
Mumbai
From India, Mumbai
Plz don’t be philosophical. Quote hardcore facts and legal position. Rest is up to company to either follow it or discard it.
From India, Mumbai
Ms. Rupawati
It is a fact that the concerned employee's intention was to resign w.e.f. 21st July,2012 only. In such a case if an employer intends to relieve such employee earlier, then the employer can accept her resignation from early date only after the concerned employee agree to get relieved from her service from the said date by giving her consent in writing. In this case, since the employer on his own accepted her resignation before her intended date of resignation, she is right in claiming pay for unexpired period of Notice. (There are number of judgments on this issue). The employer may withdrawn or modify the acceptance of resignation letter suitably and relieve her from service as per her resignation letter or from the early date if she agrees in writing.
Regards
SC Verma
From India, Chandigarh
Mr.Vikas

If you have read my post/s with all the sincereity it deserves, you could have gauged that I did not talk of any phylosophy but spoke of rock bottom realty and hard hypocracy practiced on employees and which the courts would not approve of when cahllenged before them by an aggrieved employee. Probably you missed my reference to the principle of equity which is necessary to provide a balance to the contract between two parties, more so when the parties are unequal like a mighty employer and a job needy weak employee.This clearly is legal.You must also be aware that HR is a more a phylosophy than a bunch of rigid principles to be applied arbitrarily against an employee and that a 'win-win' approach is the cornerstone of a sound HR phylosophy which help organisations avoid industrial disputes and ensure industrial harmony and thus, saves the precious time and money of the organisations. A sound HR phylosphy is the hard core fact and needless for me to repeat here that what I said is a hardcore fact.

B.Saikumar

HR & Labour Law advisor

Mumbai
From India, Mumbai
While I agree that she should get full notice pay, I do not agree with your contention that there is no rule of law that says agreement must be fair or equal to both sides. It is up to each person to decide what they will sign and onc signed they need to honor it.
Exception courts take is concerned with any term that requires the employee to work in circumstances of forced labour (like unnecessarily onerous bond) or a non compete clause that will result in the employee not getting a job in his area of specialization.
In case of things like notice period, if the appointment letter or for that matter the hr policy or terms of employment provides for termination on terms different from resignation, and the same has been signed or implicitly accepted, then it will stand in any court of law.
But please note that in case or the original poster, the appointment letter had no such clause allowing the company to terminate or relieve without full notice period

From India, Mumbai
There is a notion or view that a contarct of employment is a law unto itself so far as the rights and obligations of the parties are concerned namely the employer and the employee.It is true but not entirely.The Indian Contract Act 1872 itself has imposed conditions for a contract to be valid and enforceable. For example, a contract entered into by one party exercising undue influence on the other party is void. Again, Sec.27 of the Act,since Niranjan Golikari's case way back in 1969, renders restrictive clauses prohibiting an employee joining a competetor after leaving service as null and void as they are in restraint of trade .

A contract of service is an agreement between a powerful employer who dangles the carrot of job with a salary tag before an employee who needs it to earn his livelihood.Thus it is a contract between two unequals and perhaps the terms have been accepted by an employee for a compulsive need or under undue influence of a powerful employer.Therefore the courts will lift the veil and see whther the terms are in accordance with any law that protects the economic rights of an employee or in accordance with the principles of equity and justice.In view of the fact, the Apex Court in Niranjan Golikari's case observes that the agreements between the master and servant shall be put to stricter view and they cannot be put on the same pedestal as business contarcts between a vendor and vendee or seller or purchaser.

Thus in one case, the employer terminates the service of an employee by giving one month notice by invoking terms of employment only in letter but not in spirit but the Constutution Bench of the Apex Court threw the termination out as the employee was not given a hearing before being terminated, though the contract does not provide for hearing. This is a gleaming example where the hon'ble Court imported the principle of equity reflected in the principles of natural justice to balance the contarct evenly between the employer and the employee. Another example to illustrate, is let us assume that a contract provides a clause which permits an employee to resign by giving one month notice but entitles the employer to refuse resignation without assigning any reason.Merely because the contract was signed by the employee, should he be under slavery of the employer for his life as he has conceded the right to refuse to the employer? Will such contract survive in a court of law? Will it not hit Sec.27 of the Contract Act to become void? The foundations of such contracts seem to be shaky in the light of court's observations in one case that a person, by entering into a contarct of employment does not sign a bond of slavery and a permanent employee cannot be deprived of his right to resign(more so in the modern era of technology which opened up abundant job opportunities).

Yet there are cases wherein either the contarct of service or service rules contain a clause that an employee is transferable any where in India.However such a clause does not give carte blanche to the employer to transfer an employee with malafide intention or in colourable exercise of power, for example, to punish him for an act of indiscipline.Though the courts have upheld the mployor's right to transfer as his previlege but set aside those, effceted with bad motive on the principles of equity and fairness.

In the instant case put up by the queriest, the employee submitted her resignation with an intention to serve the notice period and if the contract does not have notice period and notice pay clause, the queriest should not have any issue. The fact that she has an issue with the employee's resignation shows that there is a provison for notice period.In such a case when the employee expresses her intention to serve the notice period, it means she wants to terminate the contarct of service only after the expiry of the notice period. Since the employer has terminated the contract of service by accepting her resignation before the expiry of notice period and deprived her of a month's salary, in my view, he is required to pay notice pay as demanded by her on the basis of principles of equity and fairness.

B.Saikumar

HR & labour Law Advisor

Mumbai
From India, Mumbai
Dear SaiKumar,
With due respect i would like to state that I put forward points with relevant case law as mentioned under under Delhi Shops & Estd Act. If you have any doubt, you can check detailed judgment of the case. Though I do agree that principle of equity need to be followed while devising any such clause.
regards
vikas
From India, Mumbai
Dear Mr Saikumar

I went through your detailed posting and thanks for bringing up the issue of Principles of equity in contract.There had been some questions about validity of Service Agreements/Bonds a few days back and I did make a mention regarding this. To assess whether a contractual term is valid in law or void, we need to examine the principles laid down by SC more specifically the principles of equity.

I am in agreement with you on the following

1. A clause saying that a person shall not join with a competitor can not pass the test of equity.

2. An employee can be transferred anywhere in Inida may not pass the test every time

3. An employee can be terminated without assigning reason also shall not pass the test of equity.

The present issue is not about the validity of a clause. Both parties agree to give 30 days' notice. The clause passes the test of equity.

Now how do we implement ? While implementing, is there any violation on the principles.

The equity clause here is meant for both parties to compensate or get compensated for the hardships that they would undergo due to the resignation or termination.

In case of termination, the hardship is for the employee hence there has to be payment of 30 days or 60 days or 90 days as the case may be.

In case of resignation, there is no hardship created by the employer to the employee. Employee choses to resign as he would have got another employment or he would have some personal committments. The principle of equity requires the employee to give a notice of 30 days and he has honoured the provision. Now the Employer can take a decision as to whether they require him to work for 30 days or 10 days or not even one day after he submits his resignation. They have in no way breached the principles of equity here. If they refuse to accept his/her resignation even after 30 days and refuse to relese his/her dues even after 30 days, they are are breaching the prinicples.

Some managements ask me whether they can postpone relieving an employee by three months or six months . My advice always had been to relieve them exactly on the last day of the notice period or earlier and not to keep them even one day more.

Similarly an employee can give a notice of 30 days or 60 days. In fact I have thrice during my career gave six months' notice eventhough the appointment letter demands only three months.It was for the management to take the call whether to believe me or not after I submit my resignation. In senior positions, this is normally negotiated. I have seen instances of one year notice periods as well. Management request employees stay for a year to complete certain assignments and mutually they agree. I have also come across with senior level people submitting resignation and getting relieved within a week

Going with the priciples of equity as explained by you, I am of the opinion that the Employer here has not flouted or breached any of the principles . Hence, the employee is not entitled to any money towards notice period.

T Sivasankaran
From India, Chennai
MR. Sivasankaran
Thanks for responding to my view and providing another angle to percieve the principle of equity in it's application to employment contracts and making the discussion more meaning ful.
Regards
B.Saikumar
Mumbai
From India, Mumbai
Dear Sir,
Normally in every appointment order in termination clause, there will be the words that either side one month salary or one month"s notice pay.
As such if employee wants to leave, he has to give resignation and have to work one month in the notice period, if he wants to leave immediately, he has to
pay one month salary to the management and has to leave the job. Some managements may waive the notice period, and relieves him immediately on his request.
In this case, she has given notice period with an intention to work. But you have relieved her immediately. As such you have to pay one month salary if she claims.
D.GURUMURTHY
LL.HR & IR CONSULTANT
HYDERABAD.
From India, Hyderabad
It will be advisable to abide by the terms and conditions in the Appointment Letter.In this particular case, the employee, who has given one month's notice for resignation, is entitled to one month's notice pay.
From India, Bokaro
Dear Rupavathi,
If she has mentioned and request you to relieved on specific date, then legally she is liable to complete her notice period and liable to get salary accordingly, if you want to relieve her before the date so check the appointment clause as "the management is free to relieve you before reliving date mentioned by you and in this case you are not entitled to get any amount and services after being relived".
Thanks//
Umesh Kumar
Rapid Fire Business Guidance
From India, Mumbai
She has resigned...she has not been TERMINATED. It the the decision of the company if they want to have Notice Period from any specific employee or not. She will be paid till the last day of her job. If it is today, then she will be paid till today.
From India, Mumbai
Reply (Add What You Know) Start New Discussion






About Us Advertise Contact Us
Privacy Policy Disclaimer Terms Of Service



All rights reserved @ 2017 Cite.Co™