Can an Employee Be Held to a Notice Period Without an Appointment Letter? Seeking Advice on Legalities

Respected Seniors,

One of our employees was working in our organization for the last 7 years when he got a job in another company with a higher salary. The company has stated that he needs to provide a 3-month notice before resigning.

The facts are:
1. He receives PF.
2. The company has not issued any appointment letter to him.

He mentioned that no company would wait for him for 3 months and declared that he would not be reporting to the office starting tomorrow. Management has insisted that he must provide 3 months' salary in lieu of notice.

My questions are:
1. Can a person be considered an employee even if they have not been issued an appointment letter?
2. If no appointment letter has been issued, what would be the notice period as per labor law?
3. Would he be eligible for benefits like Gratuity, etc.?

Please reply.

Regards,
Yasin

Mr. Yasin,

As long as he is on your company's payroll, he is your employee. It is not the fault of the employee with regard to the appointment letter. No specific notice period is mentioned in labor laws. He is eligible for statutory benefits like Gratuity, etc.

I agree with Mr. Ponraj. The company is at fault for not issuing an appointment letter to an employee for 7 years. Now, the company suffers as the employee is not bound by any terms and conditions in the absence of the appointment letter and is free to leave the company at his own will.

Please check the standing orders of your company. If the clause of notice period or notice pay is incorporated there, it may help you to recover the damages. It seems that he has been on your payroll for all these years, and therefore, he is eligible for all the statutory benefits like gratuity, etc.

Hope this helps you.

Thanks & Regards, Avika

Hi Yasin,

As per labor law, there is no rule regarding the notice period. It all depends on the agreement between the employee and the employer. Moreover, you mentioned that the company didn't issue an appointment letter. How can the company then determine the notice period as three months?

An employee's PF cannot be stopped, and they are also eligible for gratuity. The best course of action would be for him to negotiate with both employers for an additional month. If the new employer is genuinely interested, they should be willing to wait for at least a month. It is also the employee's responsibility to serve at least one month's notice even after securing a job in another company. They must ensure a proper handover of their responsibilities to another person.

Cheers,
Jeeva

I agree with Avika.

If there is a standing order of the company that specifies the notice period for employees, then it will be applicable to this employee even if he has not been given the letter of appointment. Since he has been on the company payrolls, all the statutory provisions will be applicable.

Dear All,

Please appreciate what I am stating below:

1. There is a provision of One Month's Notice period in the Delhi Shops Act. Similar provision may also be provided in the Shops Act of other States (Please refer to the relevant state law). The Delhi Shops & Establishments Act stipulates that any employee who has been in continuous employment for three months or more will have to give the employer one month's notice before leaving the company, and vice-versa. Trust this will clear doubts on this matter.

Best Wishes, Vasant Nair

2. Yes, if there is any provision in the Service Conditions/Standing Orders, such rules would apply. If the person concerned has been working in an office registered or otherwise falling within the ambit of the Shops Act, the One Month's Notice Period clause will apply.

Best Wishes, Vasant Nair

Dear All,

I worked in a company for 15 months, and in my appointment letter, only a one-month notice period was mentioned. After six months, they gave us an increment letter, which included an attachment of terms & conditions where the notice period was revised to three months. However, no formal acceptance was taken from the employee in a signature manner. Now that I have left the company, they are asking for a three-month notice period. Please advise if this is right.

Secondly, I availed a personal loan from the company based on my salary of Rs. 30,000, for which no installment was deducted as I left the company. Now, in my computation sheet, they state that the notice period is adjusted against my full & final settlement, and the personal loan is still outstanding. Please advise on this matter.

Thirdly, in my computation sheet, they have not considered the bonus amount, even though it was a part of my salary and deducted every month. Please advise on this discrepancy.

Please advise me on these issues.

Thanks,
Rahul