Business Mentor, Consultant And Trainer
Manager Human Resource
Working For Hospital
Why companies introduce clause of "Notice Period"? Companies introduce this transit period because it becomes easy for them to arrange replacement in the given time span. It gives them breathing space. When company wants to remove employee for the business reasons, same becomes applicable to the employee also. Notice period pay maintains continuity in his/her monthly cash flow for the next 2-3 months.
Once the employee works till his/her Last Working Day (LWD), what happens after that cannot become either party's business. Your senior's heartburn is that terminated employee could get notice period pay and also salary from his future employer if his future employment overlaps with the notice period. Your senior wanted recovery of the notice period pay for the overlap period!
Nevertheless, if you wanted terminated employee to pay the notice period pay provided if he gets employment within the period for which he was paid, then you should have made such provisions in the appointment letter. However, even this clause can stand scrutiny of Indian Contract Act, 1872 that remains to be seen. Appointment letter is a contract between employer and employee. This contract is valid for a period of employment. Various courts have struck down post-employment clauses inserted in the appointment letter for the variety of the reasons.
Final comments: - When enterprise passes through rough weather such quaint ideas occur. Nevertheless, your senior's leadership lies in getting new projects and not concentrating on cutting corners. Business is all about identifying the risks and mitigating them if not eliminating them. To certain extent loss of business is because of lack of strategic foresight. At this stage, he can identify which turnaround strategy is suitable rather than wasting his time in such ungenerous thoughts!
28th November 2016 From India, Bangalore
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