Dinesh Divekar
Business Mentor, Consultant And Trainer
Sr.manager - Hr&admin

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can we prepare separation policy like this:
1 If employee resigned before one month no salary will be given
2 if employee resigned between 1-6 months only basic salary will be payable for unpaid period
3 if company terminated or asked to resign then company will pay only basic salary between 1-6 months.
is this policy stand legally. if no then which act apply.

From India, Madras
Dear Dev,

You have asked your query from legal point of view only. In that case I recommend you referring Payment of Wages Act, 1936. I doubt whether your proposal will stand scrutiny of this act.

I would like to go little further and handle this case from management science point of view. When you would like to disclose these conditions of employment to the job candidates? Once these conditions are disclosed, do you think that you will get talented candidates? Will a job candidate who is quite confident of getting job and who has also high level of self-esteem will join under these conditions?

The unsaid part of your post is that your organisation could be facing problem of attrition of newly joined employees. To mitigate the expenses of employee exits, you have tried pulling this rabbit out of your hat. But then if this policy comes into effect and if some talented job candidate refuses to join, what will be the cost of lost opportunities, have you measured that?

If employees are not sticking then your problem could be with your organisation's culture or your leadership. Please fix either or both the problems. If other companies are able to retain the employees then so you should be. Study your organisation's ills and take remedial measures rather than finding unconventional solutions.

My experience: - I conducted training for the staffs of one major photo studio. They had similar problem. Owner went on to extent of withholding salary for first two months. Even then also attrition did not come down. Those who wanted to leave, they left anyway, without bothering about loss of two month's salary.


Dinesh V Divekar

From India, Bangalore
Please note we are in year 2014.....
This posting is a clear reflection of problem in your organisations top management & leadership team, thats why there is high employee turnover ... Instead of spending thoughts on such negative hr policies, either urgently change your job or focus upon building positive , dynamic hr culture which will automatically ensure employee retention....
Remember, you can buy an employees time, employees time, employees work but you cannot buy employees heart.... To win over heart, firstly you need a positive leadership, transparent policies, ethical work policies, focus on employee relations, dignity of work, quality of life , focus upon respect & rewarding performance... Then only yu will be able to resolve your retention issues..................
Best wishes!
Rajesh satyal

From India
Thanks to all,
my main concern is whether we are legally correct to pay only basic salary to terminated employees and company asked resignation, as per payment of wages act 1936 we should pay one month extra salary to terminated employees but here we are paying only basic of worked days. please suggest briefly

From India, Madras
Please help confirm, can we ask the employees to re-pay if they deny to serve notice period and leave the organization within the probation period?
From India, Bengaluru
Hi Comp_HR,
If your appointment order is having this clause "either one month notice or one month gross in lieu notice" then you can ask employees either to follow one month notice or pay in lieu of that.

From India, Madras
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