Notice Period Dilemma: Can Companies Extend It to Two Months Legally?

Dear All,

Change in Notice Period Policy

Recently, our company has changed the notice period to two months. Could anyone please confirm if this change complies with the rules? I believe most companies typically offer a maximum notice period of one month. It could be quite challenging if we secure a new job and companies are unwilling to wait for two months.

Company Rights to Adjust Policies

Do companies have the right to adjust the rules for their convenience? Your insights are appreciated.

Regards,
Nany

There is no such law to be followed by an employer. It depends upon the standing order and HR Manual policy of the company. Notice period policy differs from company to company. For example, a few companies follow a 3-month notice period or three months' basic pay. It's a mutual understanding between the employee and employer for relieving from an organization at the earliest.

Hope this information will help you.

Regards,
Karthick E.M.

Hi,

The notice period mentioned in your offer letter is what you need to serve. They should revise the offer if they are asking you to serve a two-month notice period.

Regards

I agreed with Karthick's answer because I noticed that the notice period differs from company to company. There is no such law to follow regarding the notice period; it is purely a company decision. I think they may also provide another option, which is if an employee gets a good job and wants to leave early, he has to pay some amount instead of serving the notice period. Anyway, it totally depends on the company.

Regards,
Sravan

Dear Nany, Yes, the management of a company can change the rules and regulatory activities/procedures accordingly with a standing order. Again, I just need to know whether you have signed any acknowledgment of the new rule given by your management. If not, then whatever notice period is mentioned in your appointment letter would stand active. Furthermore, if the company has issued a common circular that includes the acknowledgment clause, then the one they have implemented will be in effect.

Anyway, you always have a method and a way to buy out your notice period... 

Regards.

As everyone said, there are no hard and fast rules established on NP policies. Some companies still follow a one-month notice period, probably because the job criticality of their employees is less than others. The NP policy is designed considering the job criticality and business risk from attrition.

There are ways to waive off notice periods. The company for which I work as HR does not entertain notice period buyouts, but a waiver option is always available. During the first month of the complete notice period, the employee receives their regular salary, and the final settlement is completed in the second month of the notice period.

We always ensure that 30 days of an employee's salary is kept with us for settlement; this also depends on the employee's designation and probable liabilities to the company after exit.

Hope this gives you a better outlook.

Regards,
Jay Nair

I agree with the others above that the notice period is up to each company's discretion. Company policies can change at any time, provided that the change is communicated to all employees.

In addition to buying back the notice period, if you have any earned/privilege leave balance, you could use this in lieu of the notice period as well. I hope this helps.

Hi,

The points raised by you and answers:

1: Rules for Notice Period

There is no defined rule or law which governs this. Companies have norms as per the criticality of the role and position. Even within the same company, the provision may be different for different levels and departments. However, no company can hold an employee for an unreasonable period (which has to be defined in the context of the role) of time after he/she has expressed a desire to leave (unless bound by a bond or such clause, in which case there might be financial implications or non-compete restrictions).

2. Waiting Period/Getting a Good Job

Again, this depends on the role and the urgency for filling the position. There are companies that respect the notice period requirements as they understand that an employee who can shortchange a previous employer can do the same to them. At the same time, if they are in a hurry, they give a very lucrative offer which can offset the notice pay loss or even agree to take over notice pay. From the current employer also, a lot depends on your relationship with your superiors and with HR. If you have been a great employee, the organization would also want to keep a good relationship with you and therefore either waive off the notice period and charge you in lieu or even waive off the notice pay.

3. Company's Right to Change

The offer/appointment letter given by any company contains suitable disclaimers and caveats which allow the company to change the rules of employment as long as they are not specific to any employee and are not biased (which can be termed as discrimination). All such changes, if approved by the senior management and informed to all employees with suitable notice, are valid. It is theoretically possible to challenge such changes if a large majority of employees oppose it. However, in practice, it rarely happens in private organizations, and employees typically fall in line.

Regards

Hi, With reference to Nany's query on the notice period, I would also like to mention that my appointment letter states a 3-month notice period is required when leaving the job. However, a few months ago, the company changed the notice period from 3 months to 1 month through a circular. We have not signed anything to acknowledge this change.

Therefore, I am seeking clarification on which notice period will apply when I leave the company - the 1-month notice period or the previously stated 3-month notice period.

Regards,
Jayant

The notice period is at the complete discretion of the company's management. This is part of the service agreement signed between the employer and employee at the time of joining the company. Once accepted by the employee, it is considered a mutual agreement on this condition.

Similarly, as far as I know, if the company intends to change the notice period as a policy adjustment, then all affected employees should be informed and consulted. It is important for employees facing changes in the notice period, which was initially agreed upon at the time of joining, to be taken into confidence.

Thank you.

The notice period agreed upon with acknowledgment plays an important role. The only solution is to convince your top management and get relieved; otherwise, you will need to pay compensation for early settlement.

Regards,
Bala

Hi friend,

I got the new job, but they require me to join within 15 days for this position. Unfortunately, it's not possible for me to take up this opportunity at that time as my current salary will be put on hold, and there will be no F&F and PF settlement.

Kindly advise me.

With regards,
Kamlesh

Notice Periods in Companies

Most companies have different rules for various cadres; for example, at the junior level, it may be one month, while at the senior level, they may have a three-month notice period. Notice periods vary from company to company; some companies will fix the basic pay as the notice amount, while others may fix the gross salary.

All the aforementioned details need to be communicated to all employees as part of the change in service conditions. Therefore, a minimum of 45 days' notice is required. Employees should be properly informed, and it's advisable to obtain their signature on the communication sheet to confirm their acknowledgment.

Thanks and regards,

Kameswarao