Can We Let an Employee Leave Immediately Without Notice Period Penalty?

Respected seniors,

One of our employees has given me the resignation letter with a one-month notice period because he got a job somewhere else. As per the appointment letter, he is required to give one month's notice or salary in lieu. However, the management has decided that he can leave this organization as soon as possible without serving the notice period since he is in a hurry to join the new organization.

In this situation, what should be done? Can we release him immediately without any notice period and without deducting his short notice period amount?

Regards,
Gaurav Arora

Dear Mr. Gaurav,

When an employee serves a notice period as per company terms and conditions, then no one can hold his salary, deduct any amount, or ask for any damages regarding his early departure. As per your company policy, the notice period is for one month, and the employee is currently serving it. You can release him with immediate effect, but in this scenario, your company is liable to pay damages or one month's salary to the employee as per norms; otherwise, any such action would be deemed illegal.

Regards,

Pankaj Chandan

Hi Gaurav,

The ethical way is to serve a notice period. In this case, if the management has taken a lenient way out, then as a part of the organization, you can let the employee go without serving the notice period. But at the same time, to ensure that it does not become a practice in the organization, you may deduct a certain amount from the salary he is supposed to receive, providing a valid reason. If, however, the management decides to give him his dues, then there are no problems for you.

Hope you will get more advice from others.

Regards,
Anuradha

Serving notice period is the responsibility of the employee, and once he is ready to serve, the management should accept and allow him to work. If the management relieves him immediately or earlier than the due date, then the rule is applicable to the management as well, as the employee will be losing one month's salary (differs from company to company/grade to grade). Hence, before relieving the employee, the management should pay that amount along with the final settlement amount.

If the employee and employer are in agreement, then there is no issue. In some organizations, the management will waive off the loan amounts/dues, etc., considering the employee's contribution to the organization, while some organizations will use this as a retaining/rejoining tool. I have seen some people rejoin the organization within the next 6 to 10 months.

The basic issue here is that the management should frame a policy on this, making the notice period mandatory and reserving the right of waiving such dues with the management, and circulate it; otherwise, it will become a precedent, making it difficult to run the business over time.

Thanks and regards - Kameswarao.

Dear Gaurav,

To answer your first question - Yes, the management holds the rights to waive or withhold the notice period. There are reasons why management would sometimes prefer an employee to leave rather than stay within the organization.

The reasons could be:

1. Management does not want the employee to spread bad information or wants to protect some information.
2. Management already has a person groomed and ready to take up the position being vacated.
3. Compassionate grounds as requested by the employee who is leaving.
4. Employee is creating a bad environment.

There could be many more reasons such as these based on different scenarios why management would decide to waive the notice period. The employee, however, should be paid the complete salary as he has shown his willingness to work out the notice period.

It really depends on how the HR policy of your company has been framed and what has been mentioned in the appointment letter.

When you say 'need more information,' what exactly do you want to know more? Narrow it down so I may explain better.

Regards,
Kavitha

If the employee has requested to be relieved earlier, then the management does not need to pay for the days not served.

Hi Mr. Gaurav,

As desired by you to know more advice, it is totally based on your company's HR policy and management view in this connection. Generally, it is to be followed that if an employee wants to continue for 1 month in favor of the company, it is better. However, if the company thinks that the employee is spreading negative thoughts among other employees, the company may want to release him immediately by paying a notice period.

Regards,
:icon7: Vishnu Agarwal :)

Hi,

It solely depends on the management as sometimes we need to make decisions out of the book! There is no specific law regarding the notice periods. The notice period may vary between 1 week to 3 months. I don't think there is any point in giving away the salary to an employee if he is to be relieved immediately, as I guess he would have received the salary for the time he worked! If your company doesn't want him to work, he might be asked to give some percentage of salary against adjusting the notice period and be relieved as soon as possible.

Regards,
Gunjan

Dear All,

Please clarify the following:

1. If an employee serves for one month, they would be entitled to full salary, i.e., basic + HRA + Medical + Conveyance, etc.

2. If the employer wants to relieve the employee early, they will pay the employee the basic pay as the normal practice in lieu of the notice period.

What could be the consequence? The employee will be at a loss in the second case. Please comment.

Sinha

Dear Management,

Management is empowered with the discretion for earlier relief. The severance of the Contract of Service is vested both with the Management and Employee. Good management practice will help you to be judged as the best employer. Pay him the salary till the end date of his notice period and accept the resignation right away.

With Regards,

V. Sounder Rajan

E-mail: rajanassociates@eth.net

Off: 044-42620864, 044-55874684

Dear sir,

I am Sathakumaran and I worked in one of the construction companies. I faced some issues in my company last month when I was leaving. The information regarding my departure was communicated only via email to the company's authorities. If there are any potential problems that may arise in the future, I would appreciate advice on how to handle them.

Regards,
Sathakumaran

Hi Gaurav,

You can relieve him as per the management's thinking, but without any deduction in his salary or any other extra payment from the company. I suggest taking an undertaking from him. If you are relieving him today, make F&FS effective as of today and send him off.

The undertaking should be clear on both sides, benefiting each other in one way or another.

Regards,
Som

As per the employment contract of your company, an employee must give one month's notice period or receive a salary in lieu of it. However, if the handover has been completed ahead of schedule, or if there is no handover or takeover required, or if the department head/management decides at their discretion to release the employee before the notice period ends, or if they opt not to serve the notice period, then in such cases, the company is not obligated to make any payments. The employee should be paid their full salary until their last day of work in the office.

I hope this clarifies the situation for you.

Dear Gaurav,

It's only dependent upon your company's HR policies. At times, it can vary from person to person or case to case.

If your employee wants to leave early or without serving his notice period, and the management also agrees with the same, then there is no harm in doing so. You can release him with full salary for the same month, and afterwards, you have 0 to 3 months for F&FS.

In case the management disagrees with the candidate's decision, then you are authorized to deduct his salary, or he/she has to refund it to his new company that wants him to join early or without serving his notice period. In that case, the basic part of the salary is to be refunded to the current employee.

One thing you need to take care of is that handover and takeover have to be done, and your employee agrees to support in the future wherever needed, as already mentioned by my dear friend.

There must be a few reasons for which management has decided to relieve him early, as my friend has already mentioned.

I hope all this will help you make the right decision. :icon1:

Cheers!!! Richuka

Be in touch always.

Hi,

Can anyone help provide me with the information in support of any PPT/analysis to be done on notice period analysis.

Situation is:

My company has a 15-day notice period for the agents in BPO. Now, I want to analyze if agents do not provide the complete notice period, how it will affect us and if they provide the complete notice period, what will be the cost-benefit analysis.

Please shed some light on this urgently!

Regards,
Priyanka

Dear friends,

Is it true that a manager is employed 24/7, and he/she will be called for emergency duty even after completing normal 8-hour duty?

Regards,
Abhi

Hi Gaurav,

Many times we see that employees become very casual after submitting their resignation letter. If that is the case, and there is no management support to retain the employee, it is best to talk to the employee along with their Head of Department (HOD) and try to persuade them to resign with immediate effect. If the employee agrees, the company will not be liable to pay any amount, and the employee will also be content.

Regards,
Shikha

Dear Mr. Sinha,

If an employee has agreed in his resignation letter to serve the notice period of one month, then the organization needs to pay him the entire salary, excluding the deduction amount as usual.

If the employee is not interested in serving the notice period, then he has to pay his one month's salary to his current organization as per norms. However, if the management does not object and is ready to relieve him, then the entire amount can be waived off. This applies in both cases.

But with regards to the employer trying to sack an employee before the completion of his notice period, the organization needs to pay him the entire notice pay along with the other F & F formalities.

Regards, Elvira

If the management has decided to relieve him as soon as possible, it is a wise decision. However, please ensure that there are no dues or service bond from the individual to the company. Also, since the notice period of one month is applicable on both sides, and since the employer wants him to be relieved promptly, notice period wages have to be paid. However, we can insist the employee to submit the resignation letter mentioning the date he/she wants to leave. As a special case, he can be relieved without creating any precedents and without paying any notice period wages to the employee.

Dear Friends,

I would need further clarification. For example, a person earns a gross salary of say 45K (basic 18000+HRA 8000+ TPT 1800 + Sp. All 12000+ etc....)

1. Now, case I: He gets an offer to join a company with a joining date after 30 days. He puts forward his papers and wishes to be cleared by 30 days, fulfilling the T&C of the appointment and hopes to get a full salary at the end, i.e., 45K.

2. Case II: The moment he puts papers, the management wishes that he should leave the next day with all F&F dues. Now, he will be getting only the full salary up to the last working day... losing the rest of the salary components... or at the most, the management will pay basic 18K (one month's notice pay, if at all agreed) and get rid of other allowances.

In the second case, the employee is a loser. He is unemployed for the next 28 days without salary until he joins a new firm. Can he fight to get the full pay of 45K if he is relieved early also, as per management's wish but not his desire? Please comment.

Regards,
Sinha

Dear Sinha,

Case 1:

Is straight forward. Nothing to explain

Case 2:
If the employee has agreed to serve notice period, and even then the company wants him to quit, then ethically the company is bound to pay the entire 45K. Such a situation should not arise at all within the organization. If the employee is good, then he should be allowed to complete his tenure with respect and dignity. And if it is a trouble character, so much so that we cannot wait to get rid of him; then we should have terminated him long time ago without waiting for him to ditch the company. This really depends on how you coach your managers in handling such situations, and what they should communicate to HR.

If the employee on the other hand has requested not to serve the notice period, then we deduct his salary for the days not worked and also pay basic amount for the number of days worked. This too, with an undertaking from the employee so that there is a clear understanding that the employee has requested for this. Again; sometimes it depends on the management's discretion to pay the full salary in some cases.

I hope your doubts have been clarified.

Regards,
Kavitha

Dear Sinha,

Case 1:

Is straight forward. Nothing to explain

Case 2:
If the employee has agreed to serve notice period, and even then the company wants him to quit, then ethically the company is bound to pay the entire 45K. Such a situation should not arise at all within the organization. If the employee is good, then he should be allowed to complete his tenure with respect and dignity. And if it is a trouble character, so much so that we cannot wait to get rid of him; then we should have terminated him long time ago without waiting for him to ditch the company. This really depends on how you coach your managers in handling such situations & also the active involvement of HR.

If the employee on the other hand has requested not to serve the notice period, then we deduct his salary for the days not worked and also pay basic amount for the number of days worked. This too, with an undertaking from the employee so that there is a clear understanding that the employee has requested for this. Again; sometimes it depends on the management's discretion to pay the full salary in some cases.

I hope your doubts have been clarified.


Regards,
Kavitha

Dear Gaurav,

The answer to your query is simple and straightforward. The situation is:

1. One of your employees has resigned and has given the management one month's notice as per the terms of his/her appointment.

2. The management has decided to relieve him with immediate effect.

Under these circumstances, it is very clear that since it is the management which has decided to relieve the employee, i.e., they (the management/Co.) are obliged to pay the employee salary in lieu of the Notice Period.

Someone has very correctly observed that the employee will be joining his new assignment only after one month. Therefore, if his notice period is cut short by the management and he/she is relieved, i.e., he/she will not be working for the intervening period. Therefore, the current employer is obliged to pay him/her one month's salary in lieu of the Notice period.

Cheers!!! Vasant Nair

If an employee resigns, specifying clearly that he has to be relieved after one month in compliance with the contract of employment, and if the management decides to relieve him as soon as possible, then one option is to discuss with the employee to change the resignation letter to specify a release date, so the employer does not need to pay the notice period wages. The second option is to relieve him as soon as possible and pay him the balance of the notice period wages (wages here imply only the Basic Salary).

Trust this clarifies.