Notice Period Dilemma: How Much Will I Lose if I Resign Without 30 Days' Notice?

Dear Friends,

I am Arun Singhal, working as a Personnel Manager. As per the appointment letter, a 30-day notice period is required for resignation, or 30 days' pay will be deducted. My basic salary is Rs 6800/-, and the gross salary is Rs 12000/- per month.

Kindly advise on what the deduction would be in lieu of the notice period.

Thanks and regards

Mr. Arun,

In my company, if we are deducting one month's notice period (i.e. Rs. 6800), the deduction is made only from the basic salary and not the CTC.

Regards,
Ghanshyam

It varies from company to company. In some companies, it is only based on the basic salary, while in other cases, it is based on the Cost to Company (CTC). Please check the appointment letter clause carefully.

Dear arunsinghal1969,

Notice pay is as per the exit clause of the appointment letter. It is compensation given by one party (who broke the contract) to the other party because of the breach of the contract. Whether it will be basic or gross will depend on the exit clause of the appointment letter and company policy. Notice pay should be the same for both parties.

For more HR-related information: [White Eagle: legal aspect for Notice pay](http://kuldeeprathore.blogspot.com/2009/08/legal-aspect-for-notice-pay.html)

Mr. Arun,

Notice pay depends on company policy, so study the Appointment Letter and act according to it.

Dear Arun,

As a Personnel Manager, you are well aware of the policies of your organization. It is important to note that these policies can vary from one organization to another. Therefore, you are the best person to be familiar with the specific policies of your organization.

Thank you.

Mr. Jai Bakshi,

In your thread, you have stated as PERSONAL MANAGER, but as per my knowledge and understanding, it is PERSONNEL MANAGER. Can you please clarify this for me?

Jai

It depends upon the company policy. The trend these days is to deduct as per CTC and not basic salary.

In my opinion, if the appointment letter states that salary for one month would be deducted, it would include the gross pay. Kindly check what has been done in other cases in your organization. You, being the Personnel Manager, must have handled such cases or would have the records in personnel files to know the policy of the company. Hope this could help you.

Thanks & Regards,
Avika Kapoor

Hi,

The notice pay depends on the clauses stipulated in the appointment letter itself. When no stipulation is given in the appointment letter regarding the amount that should be allocated towards the notice pay, then to my knowledge, you must pay the entire sum of the last paid wage or salary. The benefit of the doubt goes to the employee in this case, as no proper clause has been included in the appointment letter.

At the time of drafting the appointment letter, we must clearly specify the amount that could be allocated towards the notice pay to avoid any confusion.

Mohan Rao
Manager HR

Dear Mr. Singhal,

Hello.

It would be better to peruse your appointment letter thoroughly. I hope it will be self-explanatory for your question. It may only cover your basic salary or CTC.

Thanks & Regards,

Ashok Kumar Singh

Hi,

Generally, the basic notice pay is deducted, but please refer to the appointment letter and seek legal advice. I believe the Supreme Court has issued some guidelines on this.

Sanjay

Dear Mr. Sighal,

If your appointment letter is silent on the calculation of deduction of salary, then the following could apply:
1. As per law: one month's basic will be deducted.
2. As per company policy (if not explicitly stated but practiced): basic, gross, or CTC.

You can verify this with the person responsible for processing the payroll.

Regards,
Manish Sahni

Yes, like several of our friends in their threads have said:

1. It is Personnel Manager and not Personal Manager.
2. I agree that as a Personnel Manager, you should be aware of such basic things.
3. You should study the exit clause in your Appointment Letter and act accordingly. In the absence of any specific condition, I am afraid it will have to be Gross Pay that will be adjusted against the Notice Period.

Cheers!
Vasant Nair

Dear Mr. Arun,

As a personnel manager, I did not expect such a query from you at least. For which company do you work? Mr. Jay Bakshi has mentioned it correctly.

Exserg

CTC comprises of many components like bonus, employer PF contribution, etc. For the notice period, do we need to pay these? Is it fair? Seniors, your opinions are required.

JAI

Regarding the notice period in lieu, it varies from company to company. Most appointment letters state, "In the event of resignation from service, you will be required to provide one month's notice or pay in lieu of such notice, or pay for the period falling short of the prescribed notice period."

If there is no mention of lieu payment and the salary is fixed for one month, you are required to pay one month's salary in gross.

I am inquiring if any employees have resigned during your tenure. If so, the policy applied to them will also apply to you.

Dear Mr. Arun,

You mentioned that your services can be terminated by either party by giving one month's notice to the other party or by making payment in lieu thereof. Therefore, undoubtedly, you are required to pay Rs. 12000 to your employer towards the notice period to be relieved from your services due to your resignation.

In any organization, salary includes not only Basic, DA, and any other allowance, but also the payment of contributions of ESI, PF, gratuity, and bonus. For all other purposes, it refers to the gross salary of the employee, i.e., Rs. 12000 in your case.

Regards,

NVRao
Hyderabad