Navigating Employee Resignation: Can We Legally Enforce the Notice Period?

Dear All,

I am facing a problem in relieving an employee.

We hired an employee two years ago at the Deputy Manager level, and this year (April-06), he was promoted to Manager. Recently, he submitted his resignation, requesting to be relieved on the 9th of November. As per the appointment letter, the notice period is three months or salary in lieu. Now, I am facing a dilemma as management has asked the employee to serve the notice period, but he wishes to leave earlier.

I need to find a solution to this problem by Friday and would appreciate your input on the following:

1) Can the employee leave the organization against management's wishes?

2) Can we take any legal action against him if he refuses to comply with management's order?

3) Can we take legal action against the employer he is supposed to join if they allow him to join without our No Objection Certificate?

4) How is the Notice Shortfall typically calculated, based on Basic Salary or Cost to Company (CTC)?

I value your insights to help resolve this issue.

Regards,

Sreekanth

Hi Sreekanth,

To my knowledge, there is no via media in this situation. Either the management can decide to relieve the employee by waiving the notice period, or the employee serves the notice period or pays money in lieu of notice. In case the management is not willing to waive the notice period, then the employee has to serve the notice period or pay the salary in lieu of notice. The employee will face problems if joining an ethical and professional organization because they will not be able to provide the relieving letter from the previous employer. Technically, this would mean working full time for two organizations, which is not legally valid in India. Legal proceedings can be resorted to in such a scenario. However, I would suggest discussing with the management and the employee to try to negotiate an amicable settlement to minimize damage on both sides.

Also, salary in lieu of notice is calculated based on CTC.

Hope this helps.

Sherine

Dear,

I think you should not provide him the relieving letter in case he has not done a proper handover of his responsibilities. Salary compensation in lieu of the notice period is one part, but a person at this level should give an appropriate notice period to ensure a smooth handover of his responsibilities. Make him understand that this way he'll spoil his relationship with this organization. You can take legal action if he is not ready to pay the salary in lieu of the notice period, which is clearly mentioned in the Appointment Letter and not otherwise.

Regards,
Gunjan

Dear Sherin,

Thank you very much for your reply. Tomorrow, our HR Head is coming to discuss this subject, and I will keep your advice in mind.

Thanks once again.

Regards,
Sreekanth

Hi Sreekanth,

I think you should not provide him the relieving letter in case he has not done a proper handover of his responsibilities. Salary compensation in lieu of the notice period is one part, but a person at this level should give an appropriate notice period to ensure a smooth handover of his responsibilities. Make him understand that this way he'll spoil his relationship with the organization. You can take legal action if he is not ready to pay the salary in lieu of the notice period, which is clearly mentioned in the Appointment Letter and not otherwise.

Regards,
Gunjan

Dear Gunjan,

Thank you for your reply. We will not issue him a relieving letter unless he agrees to the management's decision. However, I am trying to resolve the issue without causing significant harm to either the employee or the organization. I have already suspended processing his salary for the month of October and am waiting for our boss to arrive.

I will provide an update on the outcome later.

Thank you once again.

Regards,
Sreekanth

Dear Mr. Sreekanth,

In this case, either he has to complete his notice period or pay salary in lieu of notice as per the terms of the appointment letter. Until he has not given the relieving letter, he can't join another organization legally. In that case, you may take action against him. Salary in lieu of notice shall be calculated on the basis of basic or CTC as per the terms of the appointment letter. I suggest not giving him the relieving letter.

Rgds,
JS

Hi,

There is no legal action that can be taken against an employee or the new employer when the employee decides to leave. In such a situation, the company should recover the notice pay and relieve the employee. The notice pay in this company is calculated at the basic salary. However, in my previous company, it was based on the cost to company (CTC).

Please check the appointment letter for details on notice pay recovery. If there is no mention of it, kindly include this policy in future appointments. I hope this information is helpful.

Thanks & Regards,
Shobha Pandey

We had a senior employee holding a very responsible and important project. Just 2 months from its completion, he has submitted his letter with the two months' notice pay cheque and asked for release. We are not ready to release him, but we have no grounds to fight it either because as per the appointment letter, he has paid the notice pay. He is not available for a talk even. Several talks were done earlier, but now he has stopped coming. How do I tackle this. I was suggested by the head to write to our clients and also our competitors in this regard so that they are aware before taking him (we know where he has gone) also that we may go legal.... etc. Can anybody help? How should my letter be? It's urgent. Pl. help.

Ann M

Hi Sreekanth,

I too agree with Shobha. No legal action can be taken against the employee as he has himself submitted his resignation stating to be relieved. Moreover, he has informed the management almost 2 months prior to his relieving date. In case the policy states a 3-month notice period, then you may deduct the notice pay from his salary as mentioned in his appointment letter.

You may also refer to his appointment letter regarding voluntary or involuntary termination of services. I hope that would give you clarity in this case.

Regards,
Surabhi

Hi Ann,

As far as your query, in this world of competition, you cannot simply force anyone to stay in your respective organization. You may take your example as well; say if you get a better opportunity, then you too would have moved out. I think this is very much natural in today's scenario. That's why for us HR professionals, it's very tough to retain talent in our organizations.

You may, however, talk to the respective employee as well as his immediate senior and try to find out the root cause as to what compelled him to resign. Maybe that might help you also. If it's due to some personal reasons, you simply cannot help, but if it's in monetary terms (or any other facilities being provided), then I advise you to talk to your management about this. If they can offer the same to him, he might give it a thought.

All the best!

Regards,
Surabhi

Dear Sreekanth,

Most of the companies are implementing a 3-month notice period. As an HR professional, you handle both sides very carefully. Typically, a notice period of 30 to 45 days is appropriate, as a 3-month notice period may not be applicable for legal action. At the same time, the employee has dedicated several years/months to the current company.

The decision to relieve an employee is their own, given the standard notice period. Not providing a notice period may lead the current employee to feel negatively, and deducting salary could tarnish the company's reputation.

You have informed your management about the standard notice period for employees at different working levels, ensuring a smooth transition.

Best Regards,
Shanshen