Employee Resignation Dilemma: Should We Pay Full Notice Period Salary When Releasing Early?

Hi,

An employee of our organization has resigned and is ready to serve the complete notice period, i.e., 2 months, whereas his reporting officer wants to relieve him immediately. Now this employee is asking for the complete two months' salary as he has no job in his hand.

Please suggest what should be done in such a scenario.

Regards,
Gunjan

The employee has honored his obligations. If you want him to go immediately, you must pay him.

Hi Gunjan,

Usually, companies have a policy of "2 months' notice or salary in lieu of the notice period" when an employee is quitting the company. Since the employee is willing to serve the notice period and you want him to leave early, you should pay him the 2 months' salary.

Hi Gunjan,

As Deepthi said, you need to pay him for two months because he is ready to serve a notice period of two months. All of this is already documented in the appointment letter. An employer can avoid paying for the notice period only if he is terminated, not for resignations.

Thanks,
Kiran Kumar

Dear Gunjan,

Please pay him. I worked as a Manager with an MNC consulting in Hyderabad and wanted to serve my notice period, but it was denied by the management. Despite the commitment from my VP and DGM to pay me my two months' salary, they refrained and denied making any such promise, instead sending me a legal notice. I know the challenges I faced during the following months without a job and income.

Sincere request - please pay him.

Thank you,
Mayank Chaturvedi

Dear Vasanth,

As an employee, you have full responsibilities during the notice period, so you are required to pay two months' salary during this period.

Thank you.

Best regards

Hi Gunjant,

I believe that the employee has honored his obligations, and now it's your turn. Please pay him and either relieve him or let him work for 2 months.

Amit G

The company must pay him two months' salary because he is not resigning from the company. The company wants his resignation. Therefore, the company is responsible for giving him two months' salary.

Hello Gunjan,

Your company has to pay the notice pay. It's a common practice and moral responsibility also. The company can refuse to pay only in the case of termination resulting from misconduct where legal obligations and police complaints are attached. In all other matters, the company is bound to pay the notice pay.

"We shall also appreciate if you could mention the reason for relieving an employee on an immediate basis and also the reason for resignation. It will give more clarity to the entire scene."

Regards,

Hi Gunjan,

The employee is willing to serve a 2-month notice period, but the supervisor wants him to leave as soon as possible. The concerned employee should be paid 2 months' salary as he is willing to serve the notice period and not vice versa.

Regards

Hi,

It seems that the employee is resigning due to non-cooperation or over-expectation from his immediate superior. Try to address this first as it could lead to more resignations later on.

Regarding the salary, you are bound to pay him for the 2-month period. Otherwise, if the employee is willing, you can negotiate with him for 1 month's salary. This practice is followed in some countries, but I am not sure about it in India.

Regards,
R.S. Raj.

Hi Gunjan,

Very good. You have taken an initiative to ask from the fraternity what is to be done in this situation.

Here it is important to see what are the terms & conditions of the employment. If it says the employer is expected to pay in such cases, then you should pay. If it is mentioned that it will be at the sole discretion of the employer, then you can think twice. These are legal implications of the issue.

Now comes the HR role. Ops Manager doesn't want him, and the employee wants to serve the notice period. We can see here that this guy may not be providing an asset to the company. Otherwise, why would any senior professional (a person without any bias or prejudice) reject his notice period?

He wants the notice period just because he does not have any job in hand, which is not your problem as an HR. But the problem here is that as an efficient HR with good ethics, why don't you want to pay for the notice period? After all, it is related to policy. If you guys are not doing this, then it could act as a negative example in front of other employees.

And mind you, such a thing can attract legal issues in court.

So, you should clear your stand in front of your management.

Solution: Just see if you can put this employee in some other team for the coming 2 months so you can get the value for your money. And I hope this is not very difficult.

Best Wishes.

Regards,
Tikam

Firstly, you must read the letter of resignation in full and its contents. If the employee clearly specified that he may be relieved immediately upon completion of the notice period mentioned in the appointment, his case stands valid, and the employer wishes to release him earlier, the balance notice period amount is to be paid.

In a case where the employee has requested to be relieved at the earliest without mentioning any date, it is the responsibility of the employer to send communication stating that, as per his request, he is being relieved based on the charge handover, etc. In such a case, the employer need not pay. Otherwise, the employer can ask him to serve the full notice period or advise him to pay the company in case he wishes to be relieved early.

Patrudu

Hi Kiran,

If the employee is terminated and not resigned, he will still receive his full salary, including his leave settlement. This is why some companies choose to wait for poor performers to leave on their own rather than terminating them.

Please correct me if I'm wrong.

Regards,
Shahed

Dear Gunjan,

An employee wants to serve his two-month notice period, but the concerned HOD wants to relieve him immediately.

1. First, check whether the employee falls under Sec. 2(s) of the ID ACT-1947.
2. Ask the concerned HOD why he wants to quit. Explain to him your employment rules. In this case, the HOD can provide a report on his performance. Based on this, you can remove him immediately as per the Model Standing Order.

Before you proceed further, please ensure you have checked all aspects connected with him.

Thank you,
Manoj

Hi there,

This is a critical scenario. As the employee has fulfilled his obligations, he should be paid two months' salary. On second thought, why does his/her boss want to relieve him before the notice period? Please give it some thought before making a decision.

Regards,
Sheetal

Hi,

While you should read the terms of employment and understand what they say, I wish to offer a little divergent view.

What's the purpose of the notice period? It is to give time for the organization to get a backfill if necessary or give time to the employee to find some other gainful occupation.

He has given you two months' notice as is supposedly required, contractually. But you can always waive the notice if you do not need such notice! In case an employee finds a job and gives a shorter notice, companies many times waive the shortfall of notice or do not ask employees to cough up a notice pay. Even in courts, notice waivers are a very common practice.

The second aspect is how the process of resignation has taken place... Chances are that the employee has decided to spring up a surprise resignation to jolt his boss. You may wish to evaluate what stopped an amicable discussion on the exit date before formally putting in papers. It is possible that his boss does not wish to be "jolted"... it may have other organizational impacts... and I think the boss may be justified in asking him to leave early.

There is not any case of morality or ethics. It is a case of plain legal contract where both parties are trying to see their convenience.

Good luck!

If he is terminated on disciplinary grounds (such as insubordination), he would not be entitled to this notice pay. However, if he has been asked to leave due to non-performance, you still need to pay him. In fact, for employees who are asked to leave (in my company), we follow these steps:

1. Pay the entire notice period amount.
2. Pay the Gratuity accrued till date (even if he has not completed 5 years).
3. Full and Final Settlement (which shall include encashment of PL and other eligible amounts such as Bonus, etc.).
4. Provide a relieving letter that mentions that the performance was satisfactory. The basis being that he may not be suitable for the profile you wanted, but perhaps he would be successful in another role.

This ensures a golden handshake and speaks well about our company to other potential employees and customers, even if he was asked to leave.

Regards,
Sandeep Powar

Hi Gunjan,

I agree with our post members. If the employee is ready to serve the notice period but the company doesn't want to, then the company is liable to pay the employee. A similar case happened in our company as well, and we took the same action.

Regards,
Supriya

Dear Friends,

Please let me know if an employee has an accident during his notice period, even though he works for 1 month and 10 days. After that, he had an accident on the road. Can we adjust his sick leave/PL against the remaining notice period?

Please advise me as soon as possible.

Regards,
Kiran Bhatt

Hi,

I believe that if in a resignation letter it is clearly stated to "relieve him on or before a particular date," the employer can relieve the employee immediately without any notice pay. However, if the employee specifies a particular date for the relieving and the management decides to relieve the employee earlier, they should pay for the remaining days as the intervening period can be considered as the notice period.

Indraj Kumar

After resignation, it depends on the companies. Some may relieve early without requiring any payment. However, is it legally binding on the company to pay for the remaining period? Please clarify.

Hi Gunjan,

If an employee is given notice, he is right. But his immediate boss doesn't want him to continue for two months; you have to pay him accordingly. Midway through this situation, transfer him to another department for two months.

Regards,
Deepak :-P

Hi,

I have faced the same problem with my last company. In that case, I was the employee who had given notice and was willing to complete a one-month notice period. My employer stopped my salary and started harassing me. Now, anyone can understand their intentions. Finally, I quit the job without completing the required notice period. I then filed a complaint with a labor officer. Even after that, I didn't receive my earned salary, not even for the notice period. After a few days, I found out that the company had bribed the officer to get a clean chit. Now, from the employer's point of view, you can easily see the problems you may face.

I would suggest not avoiding your obligations. Remember, if we do not claim our rights, it cannot be termed as a crime, but if we try to avoid our duties and obligations, then it would be termed as a crime.

As an HR professional, you should allow him/her to work for the next two months. If you possess the HR traits, then two months are more than enough to change his/her mind or at least you can understand the reason for his/her quitting the job.

Abhimanyu Soni B.Com, LL.B, MBA (HR)

Look at it this way:

1. Employee Resigning:
When an employee resigns, he gives the notice period, serves it, and resigns. He receives his pay for the notice period, obtains a service certificate, and completes other exit formalities, resulting in a smooth exit. Additionally, a better reference is provided when the next employer calls.

2. Employee Terminated:
In the case of an employee being terminated, he receives notice pay and the termination note might pose a constraint for future employment. The company handles all other exit formalities compulsorily.

3. Forced resignation: (No notice pay)
In a forced resignation scenario where no notice pay is provided, the individual submits the resignation, following the entire process willingly. Documentation of the exit interview is done, and feedback is given even if the next employer contacts. The experience letter and other formalities are duly completed.

The company takes advantage of not paying the notice pay but obligates the resigning staff to complete the formalities. This approach may vary for different staff members.

Thanks.

Dear Gunjan,

I also agree with all HR personnel's reply. You have to pay the notice pay, but if you don't want to do it, then you have to manage a request letter from the candidate regarding his immediate release.

Thanks and Regards,
Manu

Hi Gunjan,

Why does the reporting officer want him to get relieved immediately? If it is a matter done on disciplinary grounds, then the employer need not pay 2 months' salary even though the employee is willing to serve the 2 months' notice. Please ask the concerned employee to look into the terms of his appointment as well as the situation and circumstances under which the immediate superiors insist on quick separation or removal.

Good luck,
Raman

Dear Gunjan,

If an employee is willing to serve a notice period of 2 months but is being asked to leave immediately, they should still receive the remaining salary amount.

Thank you.

Hi Gunjan,

You should definitely give him the two months' salary as this will also create a good image of the company in the eyes of other employees. Otherwise, no employee will rely on the company and will leave without any prior information. Employees will lose trust and faith in the company, which can create a negative impact and will not be good for the company's future.

Regards,
Priyanka