Sushilkluthra@gmail.com
Consultant In Legal Matters
Sishiramishra
Sr. Software Engineer

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Dear Sir,
I am service joining letter, it is clearly mention "Employement can be terminated by you, with or without cause, giving the other party a 2 month's notice - the company reserve the right to pay or recovery salary in lieu of the notice period." Do I need to stay at company if I am ready to pay 2 month salary and leave the company immediatly.
My Employer is forcing me to work for two month and complete the projects. Please suggest me to get out from this situation.

if you require proper relieving order you need to serve the notice period. it is left to the employer to waive off/compensate your notice period. if the employer is adamant, you need to serve and get yourself relieved which is right in all proposition.
Though it is the appropriate solution to abide by the term and conditions of employment and have a golden hand shake with the employer to get relieving letter but in exceptional situations an employee does not want to adhere to contract and wants to pay notice pay in lieu of serving notice period. Can employer seek injunction against him to leave the job and serve notice period. The answer is no. After having tendered the notice pay amount by employee unless the employer has contemplated a domestic inquiry against employee, employer should generally relieve him. Now question arises in the instant case the queriest is working as senior software engineer in Bangalore. Thus he is governed by Karnataka Shops and Establishment Act. Under section 39 of it an employer is required to pay only one month notice or pay in lieu thereof while terminating employee's services. If employer has been enabled to pay wages in lieu of notice period pay, it will be arbitrary and discriminatory if an employee is denuded that contractual clause. A clause enabling one party only to pay the notice pay will be contrary to section 23 of Contract Act as it may amount to discrimination and arbitrariness and bonded labour which is contrary to public policy under Constitution of India. Further for example if the queriest happens to be covered under the definition of workman defined under ID Act, assuming that he is working at grassroot level, then employer is enabled to give one month's notice or wages in lieu of notice at the time of retrenchment, besides other amounts, it will be discriminatory if a workman is asked to give notice pay of more than one month in lieu of notice period or even asked to serve notice period by deferring his relieving.The clauses have to be equitable.

Thanks

Sushil

In continuation of above, the question arises in the wake of above legal position what is the consequence of employee having given notice to employer to immediately relieve him and simultaneously tendering notice pay in lieu of working in notice period but the employer refuses to relieve him. As per Bowen v Goes decided in 2012 by Ontario court of appeal, the payment of notice pay in lieu of notice period is liquidated damages. Thus employee having repudiated contract by resigning with immediate effect as per Contract or in terms of Shops and Establishment provisions etc but employer who refuses to honor his terms by relieving the employee becomes liable to pay damages not as per the liquidated damages but as per common law damages under section 73 read with section 75 of the Contract Act. The employee is having right to sue for damages the defaulting employer even after he has been relieved. The employee may even pursue with the Inspector under the Shops and Establishment Act or ID Act where applicable to get relieving from the employer.

Thanks

Sushil

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