Notice Period Confusion: Can I Challenge HR Over My Shortened Notice and PL Encashment?

I have resigned from a known Private Life Insurance Company, and the issue was regarding my Notice Period. Full and Final Settlement done, and I found my PL's not encashed and taken against a short notice period. I had given a 1-month notice period as mentioned in my appointment letter.

My signed appointment letter states 1 month, and then there was a change in policy that extended the Notice Period to 3 months (intimated through email). I have not signed any letter that mentions this 3-month Notice Period. So, in a sense, I have not agreed to the new Notice Period.

However, the appointment letter states that the employee needs to abide by company policies as amended from time to time. I believe such a policy applies to work timings, dress code, etc., and not to the notice period, where it needs to be mutually agreed upon.

I am not sure if I am right or wrong. Does that mean I have to give a 3-month Notice Period, or do I have the right to fight with HR and get the encashment of my PLs?

The company has the right to amend its policies from time to time, and the amended policy needs to be communicated to the affected group, which in your case was done by email. Hence, as per the facts stated, you will need to serve a 3-month notice period.

I am sorry, but I do not agree with Suja. The company can increase the NP from time to time as it is beneficial to them. So, what about the employee? The employer is a gainer in all respects. Moreover, the offer letter that the company issued to its employee is a form of contract. So, if any major changes are made to the contract, then it has to be mutually agreed upon by both parties. The employee joins the company based on the initial terms of his offer letter/contract. If the employer wants to change the contract terms, he has to obtain agreement from the employee.

Dear All,

I agree with Mr. Manoj Bhawsinghjka. If the gentleman who posted the first post in this thread is a "workman" as defined under the Industrial Disputes Act, the change in the length of the notice period would amount to a "change in usage" specified in item no. 8 and also would amount to "the alteration of an existing rule" specified in item no. 9 of the Fourth Schedule to the Industrial Disputes Act. Service conditions specified in the fourth schedule to the Act cannot be changed without following the procedure prescribed under section 9A of the Industrial Disputes Act. Therefore, the action of the management in changing the notice period from one month to three months through email amounts to a violation of section 9A of the Industrial Disputes Act.

But the question is, what is the remedy open to the affected employee? As of now, there appears to be no remedy for him. The management/employer would not have effected the change in the notice period on its own through email in the case of strongly unionized workmen. The affected employee could try his luck fighting with the management. The question is how far he would be successful. Unfortunately, to those employees who are not covered by the provisions of the Industrial Disputes Act, even the semblance of protection given by section 9A of the Industrial Disputes Act is not available.

With regards,

Thank you for sharing your valuable thoughts. I have a query for you. As all of us are aware, the BPO industry is rapidly growing in India. Many BPO employees face the same problem where the employer suddenly increases the notice period to meet their needs. Please correct me if I am wrong, but as far as I know, there is always a provision for buying out the notice period if someone is unable to serve the complete notice period to his or her company.

Legal Actions Against Extended Notice Periods

What legal actions can we take against a company that has increased its notice period from 1 to 3 months and also does not allow the option of buying out the notice period for its employees, which goes against BPO industry standards? In this way, they do not provide the relieving letter to their employees, posing a significant challenge for employees like us. What can we do in such a situation? Please advise.

Kind Regards,
Manoj Bhawisnghka

The issue raised by you is not a new one. This practice of the management/employer increasing the notice period on their own subsequent to the employment of individuals is strictly a violation of the provisions of Section 9A of the Industrial Disputes Act, as pointed out by me in my last post. This practice is prevalent not only in the BPO sector or IT industries but also in retail chains and other establishments where white-collar employees are not unionized. I am specifically using the term "unionized" because this does not happen in nationalized banks where there is a strong union presence. However, this could happen in private banks or private insurance companies.

You may wonder about the reason for this condition. If there is a change in the conditions of service applicable to workmen covered by Section 9A of the Industrial Disputes Act, the options open to the workmen are either to accept the change proposed by the employer, thus putting an end to the issue, or to raise a dispute under the Industrial Disputes Act against the proposed change.

Who Can Raise a Dispute?

If you go through the provisions of the Industrial Disputes Act, you would see there is a section called Section 2A. This gives the right to an individual workman to raise a dispute about his dismissal, discharge, termination, or retrenchment. In other words, if an individual worker loses his job, he can challenge his dismissal by approaching the appropriate forum and following the methods prescribed under the Industrial Disputes Act.

You will also notice that Section 2A was introduced through an amendment and was not present when the Industrial Disputes Act was passed in 1947. Recently, the Central Government further amended Section 2A. The reason for introducing Section 2A was the judgments of the Honourable Supreme Court of India interpreting the definition of the term "industrial dispute" as defined under Section 2(k) of the Industrial Disputes Act.

Prior to the introduction of Section 2A, if a worker who was dismissed, discharged, terminated, or retrenched wanted to seek a remedy under the Industrial Disputes Act, he had to have his dismissal espoused or supported by the Union. The Government wanted to alter this situation and hence introduced Section 2A.

Relevance to Your Post

The relevance of these developments to your post is that for a dispute between an employee(s) and their employer to become an industrial dispute, the espousal of that dispute by a body of workmen is necessary. The term "trade union" is not used in the Industrial Disputes Act; instead, the term "body of workmen" is used by the Honourable Supreme Court while interpreting the term "industrial dispute."

The trade unions in the establishment or industry were held to be the body of workmen who could espouse the cause of the workmen employed before the authorities under the Industrial Disputes Act. With the introduction of Section 2A, which gives the right to the individual workman to seek a remedy before the authorities under the Industrial Disputes Act, other issues affecting the workmen/employees as a whole had to be espoused by the "body of workmen" or "trade unions" to espouse the dispute.

Regarding the issue you raised, if the change in the notice period may affect all the workmen employed in the establishment, it has to be espoused by the body of workmen to seek a remedy under the Industrial Disputes Act. Even if the change in the notice period is only for a single individual, he still needs it to be espoused by the body of workmen.

The challenge in BPO industries, IT industries, and other white-collar employments is the lack of unionization for several reasons. This is the primary reason for the employer to change the service conditions as desired. In my view, the Industrial Disputes Act should be suitably amended to give the individual worker the right to seek a remedy under the Industrial Disputes Act without the espousal of the Union. Public opinion should be generated to achieve this objective.

Regards