Kolkata: Payment In Lieu Of Notice (by Employer Company) - CiteHR
Umakanthan53
Labour Law & Hr Consultant
Pratheekshaa
Senior Manager - Human Resources
Korgaonkar K A
Ba,llb,mpm,dir&pm,dll&lw,d.cyber
Rajans68
Consultant
User1122
Digital Analyst
+3 Others

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Hello,

I worked for Kolkata based IT company. The offer letter clearly states:
++++++++++++++++
Notice of Termination Notice of termination of employment by the employee shall be 45 days notice in writing or payment in lieu of notice. Such notice may not be offset by unused leave. The same shall be applicable when the employment is terminated by the company.
++++++++++++++++

A week after I resigned (giving 45 days notice as we agreed), the company told me to stop working and ended work relation. They paid for the days I worked (of-course after too much delays, follow-ups & arguments!) but refusing to make payment in lieu for remaining notice period they din’t let me serve fully.

Company’s argument is:

1) because an employee resigned (while still under 6 months probation), company is not obliged to respect notice period.

2) They also quote: Section 15 of the WBSCE Act,
++++++++++++++
"The services of a person employed in any shop or establishment, who has been in continuous service for not less than one year in such shop or establishment, shall not be terminated without giving him one month's notice, in writing, showing the reasons of such termination and until the period of notice has expired or until he has been paid, in lieu of such notice, wages for the period of such notice." 

to which I wonder:
- aren’t they obliged to follow what was put in an offer letter?
- and if not, it was bogus claims they make in in offer letter?

Please let me know my options further - are they obliged to respect the notice period or not?
[of-course few people advised - "just forget it and move on", but if we all have such attitude why do we sign contracts in the first place and have Laws in place?!]

Thanks a lot for your guidance in this matter.

Dear User1122,

Your post seems to me a bit confusing. You submitted your resignation with 45 days of notice and continued in service in anticipation of acceptance of your resignation, okay? A week after that the company asked you to stop working or refrain from coming to work , of course, without any specific intimation as to the acceptance of your resignation or your relief, is it also okay? So it is implied otherwise that your resignation was accepted on the date of communication and the same day you were relieved in waiver of the notice period. Irrespective of the delay and your pressure, you were paid for the days you worked from the date of submission of your resignation till the date of such communication from the management. When the company has not terminated your services but relieved you from service before the expiry of the notice period offered by yourself and paid for the worked part of the notice period, how do you allege that the offer conditions stand violated by the management in this issue?

Thanks for your response.
And sorry for the confusion.
Let me clarify further - I never asked for premature relieving and willing to work to serve full notice period. Hence, if they ask me to stop working while serving notice period is considered as 'termination' [at-least that's what happens internationaly and correct me pls. If I mis-interpret anything here]
Isn't it (to be fair on both sides) just as employee is made to serve full notice or pay in lieu of notice period... an employer also must let employee serve full notice period or pay in lieu of notice....
I've spoken with few friends and got conflicting response. That's why posted here to take expert opinion - what the normal practice (or what the law says) in such situation.

P.S: Or, put it this way
In my opinion:
- If an employee resigns (irrespective under probation period or not), the employment relation still continues until the last date of notice period. With all due responsibilities / liabilities on both sides and all the terms that had been agreed upon.
- Under such circumstances, and if no conversation on premature relieving has occurred, if an employer asks employee to stop working, it is classified as "termination" and thus liable for payment in lieu of notice to an employee.
But again, this is my opinion (which of-course may be biased). That's why seeking expert people's opinion in this forum, based on their understanding / experience / expertise in these matters.
Thanks for you kind attention.

Dear friend,

I can very well understand your feelings. From the perspective of sanctity of the terms and conditions forming part of the contract of employment, your views are correct. When an employee conveys his intention of resignation together with his unqualified willingness to serve the notice period already agreed mutually, reciprocal courtesy demands that the employer should formally inform the employee his acceptance of the same with certain modifications if any, within the scope of the agreed terms. Your management could have very decently informed you that the notice period is waived and therefore you are relieved forthwith. But, it is the mind set of the IT and ITES industry that they are above the laws of the land and their general HR practice is based on free hire and fire and therefore it is not prudent to engage in an one-to-one fight with them. Their watchful eyes on quarterly financial performance are totally blind to the socio-economic back ground of an Indian Knowledge Worker and their HR people are there only to implement their policies and not to bring the questions of legality or otherwise of the policies. That's why, at times, a Higher Judicial Forum like that of a High Court has to remind them of the basics of Indian Labour Laws.In such a state of affairs, one has to be more rational than emotional.

Dear friend,

Let me share some more inputs from out of my search on the legality of relieving a resigning employee before the expiry of the period of notice mentioned in his resignation. The ratio decidendi of the judgment of the Delhi High Court in this regard can be found in its verdict in DASS STUDIOS v. R.K.BAWEJA, LABOUR COURT, DELHI [ 1972(1)ILR 856 ]. While explaining Sec.30 of the Delhi Shops and Establishments Act,1954 which deals with the termination of employment of an employee who has rendered a minimum service of three months, the honourable High Court observed as follows:

" A plain reading of Sec.30 of the Act would make it clear that whereas the notice of one month under subsection(i), it is for the benefit of the employee, the notice under subsection(2) is for the benefit of the employer. If an employer gives notice u/ss(1), it is open to the employee to quit the service even before the expiry of the period of one month. Similarly, when the notice is given u/ss(2), it is open to the employer to dispense with the services of the employee even before the expiry of the period of one month.It is not necessary for the employer to wait for the full period of one month before dispensing with services, just as it is not necessary for an employee who has received notice u/ss(1) to wait for the full period of one month before quitting the services of the employer.

For example, when the employee served a notice of one month on 17-07-1968 tendering his resignation to be effective from 16-08-1968 and the employer accepted the same on 23-07-1968 with immediate effect, then the employee CAN NOT INSIST on continuing in service till the expiry of the notice period of one month on 16-08-1968."

I do hope that the legal position in this regard is clear to you now! The only mistake made by your employer is that they took a hasty decision in excess of enthusism and acted unconventionally. So better leave it as it is and cocentrate on your career.

Dear Shri. Umakanthanji,

Thanks for inviting me to offer my views on this subject.

The posts by queriest are bit confusing to me too. Under this circumstance I avoid giving any view / opinion.

The queriest is governed by WBS&E Act 1963, Service Contract document and Standing Orders if his company has or had 100 employees.

WBS&E Act section 15 says only about termination of services by employer. The queriest has given the said section in his post #1. According to it, a person with more than one year of service cannot be terminated without giving one month notice in writing showing reason of such termination or salary in lieu thereof.

As per the offer letter (Service Contract document) there is a requirement of 45 days notice from either side to terminate the employment or payment in lieu thereof, to my understanding as stated by the queriest.

As per SO Act, notice of 30 days is required from either side or payment lieu of notice in case of termination of permanent employee.

Unless the Standing Orders are certified with 45 days notice, the company cannot go for 45 days notice.

Company cannot supersede any law in force by signing any Service Contract document.

You have rightly said in your post no. 5 that "IT and ITES" industry is above the law of the land and their general HR practice is based on free hire and fire.

In my view, query in this thread is about, can employer terminate services of an employee who is on notice pay. Answer to it - No. And if terminates, he has to be given salary in lieu of remaining working days.

The legal position given by you in your post # 6 is not applicable to the queriest since he is not governed by DS&E Act 1954.

Hope you will agree with my contention.

Thank you very much @Umakanthan53 for taking your time to do more research on this and share with wider community.
and appreciate your further clarification @Korgaonkar on this as well.
honestly, I need to carefully read these sections / acts few times before I can fully understand them and arrive at the conclusion. From @Korgaonkar last response it doe look to me
- company *is* liable to pay salary in lieu of remaining working days
- irrespective, employee resigned and serving a notice period (provided employee hasn't requested early relieving)
Let me know if I mis-understood anything.

Please let me know if you are stopped to work in writing. Umakant has explained everything in writing. Evenif there is 6 month rule in West Bengal, it should have formed a part of your appointment letter.
Since you are stopped working you consider that your notice period is waived. just ask them a letter of acceptance. Termination should have reason.Hence seek a letter of acceptance.

The employer has all rights to relieve you from the services before the expiry of notice period against your resignation.
It is the discretion of an employer to keep one till expiry of notice period.
You can sue him only if he has terminated you without notice period or notice pay.


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