Notice Period Deductions: Is It Legal to Deduct from Gross Salary Instead of Basic?

Dear All,

In order to ensure that employees complete their notice period in case they have decided to move, we have changed the notice period clause from deduction in gross salary rather than basic. The implication of this would be higher in monetary terms. Is there any law that suggests that we cannot do it? Please advise.

Regards,
Sunaina

Deduction made in lieu of the notice period as per the letter of appointment is calculated on the Gross Salary, not on the basic.

S. Choudhury

If it was mentioned in the employment contract as 'salary' merely, then the salary in lieu of notice is normally understood as basic salary only. You should have clearly written in the appointment order that it is gross salary. Otherwise, there is scope for defining it as basic salary and disputing over it.