Is Our Company Obligated to Pay Notice Period if We Relieve an Employee Early?

Dear All,

Looking forward to your advice on the following issue:

Our employment agreement has a notice period of one month from either side. One of our employees submitted his resignation and was relieved before the expiry of the notice period as he had completed his project and no new work was allocated to him. He was willing to serve the full notice period, but we did relieve him immediately as there was no pending work from his end.

The employee is demanding notice pay in lieu of the remaining notice period as he was relieved within 10 days. Is the organization liable to pay? After the resignation is accepted, can't the organization relieve an employee in advance or late based on the nature of the job and responsibilities?

Thanks in advance.

Rekha

Dear Rekha,

This organization has to pay the notice period. Because as per the appointment terms, if either party leaves before the notice period, notice money has to be paid by the party breaching the clause. Please refer to your organization's appointment terms.

In this case, as the organization is relieving the employee despite the employee's interest to serve the notice period, the organization has to pay the notice period. The appointment terms were established by the organization itself. If an employee leaves without serving notice, organizations always ask the employee to pay the notice period.

Regards

Dear Rekha,

No, the company is not liable to pay any notice pay. The one-month notice period is applicable as follows:

1) If the company terminates an employee, then it must give either 1 month's notice or payment in lieu of notice.
2) If the employee resigns, he must either give one month's notice or payment in lieu of notice.

In this case, since the employee has resigned on his own, hence the company can release him earlier than the notice period. The payment for short notice by the company is applicable only in the case of termination.

In the end, I would like to add that I hope he has resigned on his own and was not forced to resign by the company??

Regards,
SC

Dear Rekha,

I do not agree with SC. Firstly, I want to know the details of his resignation in order to make an appropriate suggestion. What did he specifically mention in his resignation letter? Currently, as you mentioned, the employee is willing to complete the notice period. In this scenario, the company is bound by its own policies and will have to pay the notice period wages.

Faisal

Hi,

In case the employee has tendered his resignation giving one month's notice and the company has relieved him earlier, then the company is liable to pay him the notice period salary. However, if the employee has submitted his resignation without mentioning the notice period (i.e., the employee has resigned with immediate effect) and the company has accepted the resignation as per the resignation letter date, then the company can relieve the employee immediately without paying him the notice period compensation.

Either party has to state the period before resigning and terminating the service. It has to be mentioned in the resignation letter/termination letter the period from which the resignation will come into effect.

S.K

Rekha, there are only two ways to end the employment contract and thereby the relationship between the employer and employee: termination and resignation. If someone resigns, he is expected to serve the notice period, and if someone is terminated, the employer is expected to serve the notice. If they are not willing to serve the notice, they are expected to pay in lieu of the notice period. In employment, there is nothing called willingness to complete the notice period. Another member has specified that resignation is resignation; it doesn't matter what is written in it. So, the company is not liable to pay any amount towards the notice period because it is a case of resignation and not termination.

Regards,

Sanjeev Sharma

Hi Friends,

Thank you for the responses. Yes, the resignation was of his own will. It's only that the employee did not have any task to complete, and what will he do until the date of expiry of the notice period? Why should the organization pay for an idle employee for the sake of completing the notice period when he has tendered his resignation? We all know "Idle Mind is the Devil's Workshop," especially when he has submitted his resignation.

From the responses, I get a mixed opinion. Can anybody tell me how this weighs in the eyes of the law?

Regards,
Rekha

Rekhaa,

As we have discussed the case of resignation, the onus is on the employee to serve the complete notice period or pay in lieu of it, and it is at the discretion of the company if they can relieve the person early. In the case of termination, it is the reverse. So, even legally, the company is correct and is on the safer side.

Regards,
Sanjeev Sharma

Dear Faisal,

It is not a question of agreeing or not agreeing, but this is the stated position of the law.

The whole concept is based on: "If the Company asks you to leave, they must give an official intimation one month prior to the date of severance of ties."

The above was modified, and the notice in lieu of pay was included to accommodate Closure and Restructuring/Transfer of Undertaking. The notice pay was no doubt a good move as it served both the employer and the employee. The employer had the provision of cutting excess and inefficient and unwanted manpower with immediate effect, thus reducing the economic and time cost. It also helped the concerned employee as he received immediate money and was able to search for a job elsewhere, which would otherwise not have been possible due to him serving the notice period in the office. Staying in the office after termination/retrenchment was embarrassing and awkward for him and had a negative effect on the workforce.

The above was incorporated in our Labour Jurisprudence and was made a law under the Industrial Disputes Act, 1947. This was a protection provided to our labor force which was poor with little or no financial security, with a high incidence of exploitation. Since the industry was in a nascent state, the rate of labor turnover was also very low.

With the growth of the industry, evolution of the workforce, shifting from a socialist economy to a global and open economy, and the emergence of large Private Players and Management Boom, the reverse of the above came into existence.

It would be worth mentioning here that there is no law in India (I don't know about Pakistan) which deals with Managerial Workforce, and hence the letter of appointment is a contract.

In this light, we must treat it as any other contract. So, when an employee resigns voluntarily, he is not entitled to notice pay from the Company. The Organization is only liable when it terminates the Contract, but here the termination is brought about by the other party hence you cannot claim compensation if you terminate the Contract.

So, the onus of paying compensation lies with the party which terminates the Contract and not the other way around.

Regards,

SC

Hi all,

I am from Malaysia. Seeing you all agreeing and disagreeing with each other, I'd like to share the practice and law here in Malaysia.

1. If an employee resigns out of his/her own will, he/she is required to serve out the notice period as stated in his/her appointment letter, otherwise payment in lieu of such notice period, to the company.

However, if the company would like to waive the notice period for whatever reason, the company is liable to pay the employee the notice period which he/she is supposed to serve. The reason is, were the company did not relieve the employee early, he/she would have served out the notice period as required.

2. If the company terminates an employee, the company is liable to serve the required notice period as stated in the employee's appointment letter, otherwise payment in lieu of such notice period, to the employee.

However, if an employee's contract of service is terminated on the ground of misconduct, no notice or payment in lieu of notice would be required to serve to the employee.

As mentioned by Rekha, "Idle Mind is Devil's Workshop," how true it is. But here in Malaysia, an employee has the right to lodge a complaint against the company if he/she was made redundant in his/her job, to ask for compensation.

This is to protect the rights of the employees even though he/she resigns.

If a resigned employee is idling due to the completion of the project, it is the best practice to pay him/her the remaining notice period as compensation, to relieve him/her earlier, rather than letting him come into the office without anything to do for the day.

Remember, should the project/task not be completed, he/she would not have resigned in the first place or be idle during the notice period.

Anyhow, this is the practice in Malaysia if such a case happened here. Just a sharing of thoughts. :)

Cheers,

Ashley

P/S: The laws and regulations regarding the termination of the contract of service could be found in the Employment Act 1955 (Malaysia), Section 12 - Section 15.

Why should an employee give notice to their employer when the employer fails to live up to company policy? When the word gets around among the employees, some or many of them may not give notice. I don't know what your labor laws are, but in some countries, employers are held liable for unpaid wages when the employee gives proper and timely termination notice. Are your employees considered as contract employees, similar to the sales representatives?

Yes, I agree with you. The labor law here, of course, does state that the termination clause applies to both the employee and employer. If an employer breaches the conditions of the contract of service, they are held liable to pay the notice period to the employee.

The contract of service here refers to any agreement, whether oral or in writing, and whether express or implied, whereby one person agrees to employ another as an employee and that other agrees to serve the employer as an employee. This also includes an apprenticeship contract as per the Employment Act 1955 in Malaysia.

The contract of service I referred to does not apply to contractual employees. It is an agreement between an employee and employer, encompassing all types of employees, including short-term contract employees.

Thank you for sharing.

Hello Rekha,

We all know the reason for having a notice period, i.e., is to have a smooth handover and taking over, and at the same time, it may be used to look for a suitable replacement.

The question is not whether the company should pay for the remaining notice period or not, but what is logical in the situation.

How would you differentiate an employee who has an offer and wants to leave after serving a 10-day notice period with a person who, as per the appointment agreement, is willing to serve the stated 30 days' notice?

If the employee leaves without serving the full notice, we surely recover the shortfall in notice, but why penalize an employee who probably has negotiated with the prospective employer for a Date of Joining (DOJ) later than 30 days (please note that by joining early, he/she may increase his/her earnings, assuming he/she is moving for at least a 10-15% increase).

By releasing an employee earlier than the notice period without compensating, it would force him/her to be unemployed for the period the employee wanted to serve as notice, which the company does not.

From another angle, in the future, most of the employees who resign will make sure that their DOJ with prospective employers is not beyond 10 days (knowing how the company treats an employee willing to serve the full notice).

These are purely my thoughts and perceptions, not binding on anyone.

Thanks,

Sunil Joshi

Hi,

In case an employee wants to leave early, he has to pay one month's pay or a proportionate amount of the notice period. It is at the sole discretion of the management whether they want to recover the notice pay or not. It is better to refer to the rules of the company and act accordingly.

Niraj Saxena

Hi, SC.

You have rightly pointed out the Industrial Dispute Act. The purpose of the section is to avoid misuse of powers by management. Moreover, when an employee signs an appointment letter, he enters into a contract with the employer, and both parties are bound by the law to follow the conditions mentioned in the contract. Any breach of the contract would have legal implications on the party not complying with the conditions of the contract.

S.K

Dear Preety,

I think we can release him early. Why should a company pay an employee who is sitting idle?

Regards,
Preety

Hi,

I agree with what Swastik said and explained. The notice period is either from the company's end when they terminate your services or they pay the salary in lieu. However, if the notice period is due to the voluntary resignation of the employee, the decision lies with the company on whether they want to release him in 2 days, 20 days, or 30 days. The company has the right to complete the knowledge transfer and relieve the employee. Therefore, I don't think the company needs to pay the employee for relieving him earlier.

What I suggest is to simply complete his clearance, hand over his relieving and experience certificates, and ask him to leave as soon as possible before he creates a scene. As you rightly said, an empty mind is a devil's workshop.

Regards,
Pooja

Hi Friends,

I don't know what is there in the resignation letter. But if an employee mentions in his resignation letter that he is "willing to serve his notice period," in that case, if the company relieves him before his notice period, the company has to pay the benefits to the employee. If the employee didn't mention the above-quoted words in his resignation letter, then the company is safer.

Regards,
Suresh

Dear All,

I won't be amazed if you would call this act of the organization unfair if it would have treated you the same way. Ethically, the organization should make a distinction between employees who treat the organization as use and throw by serving a lesser notice period than stated in the appointment letter or the policies of the organization and from other employees who are willing to comply with the policy of the organization.

How do you feel when an employee shows his unwillingness to serve the notice period? You feel used, right? The same way the employee may feel if you relieve him before the notice period that he is willing to serve, without compensating for that. As per my understanding, feedback from ex-employees reflects a lot of the company's culture. Why burn bridges for some petty amount?

Thanks again.
Sunil Joshi

Hi HR folks,

Good knowledge sharing!

In my opinion, I would like to focus on the resignation letter submitted. If the employee has stated something like 'please relieve me on or before...' and uses the term 'on or before,' then the company is not liable to pay. The key point here is that you should not have issued the resignation acceptance letter stating the date for the employee to be relieved.

If you have provided a relieving letter with a specific date, then the company will be obligated to pay the balance of the notice period's pay.

Any comments on this, please?

Sushil

Hi,

I need assistance. If we want to recover the notice period salary from an employee, is it calculated on the basic, gross, or net salary?

Regards,
Vijay

Hi Sushil,

I have a question regarding the recovery of the notice period salary. On what basis is it calculated - Gross Salary, Net Salary, or Basic Salary?

Regards,
Vijay

Dear Rekha,

It seems the employee does not know the method of formal communication. In his resignation letter, he is supposed to write either "with immediate effect" or "with effect from [specific date]"; it seems he has loosely said he is willing to work till the end of the notice period instead of specifying that he would like to be relieved at the end of the notice period. And you have caught him! Well, it is his bad luck that your company wants to stick to the letter of the agreement and not the spirit of the agreement. Not paying him the notice pay might seem legally valid, but in my opinion, it goes against all norms of HR. Your company is also a confused and crafty setup; instead of having the courage to terminate the services of a redundant employee, it has waited (or maybe prompted even) for the employee to resign and has jumped at an unwitting mistake made by the employee.

Shreyas Munshi

Hello Rekha

As we all know the reason for having notice e period, i.e. is to have a smooth handing over and taking over and the same time may be used to look for a suitable replacement.

As Mr Sunil Joshi has rightly said that , “The question is not whether the company should pay for the remaining notice period or not but what is logical in the situation. How would you differentiate an employee who has an offer and wants to leave after serving 10 days notice period with a person who as per the appointment agreement is willing to serve the stated 30 days notice.

If the employee leaves without serving the full notice we surely recover the shortfall in notice, but why penalise an employee who probably have negotiated with the prospective employer for a DOJ later than 30 days (pl note that by joining early s/he may increase her/his earning, assuming s/he is moving for atleast a 10 - 15 % increase).

By releasing an employee earlier than the notice period without compensating would force her/ him to be unemployed for the such period the employee wanted to serve as notice which the company doesn't.

From another angle, in future most of the employees who resign will make sure that their DOJ with prospective employers is not beyond 10 days (knowing how the company treats an employee willing to serve full notice)”.

As per Sanjeev …….....the case of resignation...the onus is an employee to serve the complete notice period or pay in lieu of it and it is the discretion of company if they can relieve the person early.

As per Pooja …………..Notice period is either from the company's end when they terminate your services/ they pay the salary in lieu but if the notice period is due to voluntary resignation of the employee, the decision lies on the company whether they want to relieve him in 2 days/ 20/30days. The company has the right to complete the KT & relieve the employee. So I don't think the company needs to pay the employee for relieving him earlier.

AND She suggested to complete clearance, hand over to him relieving & exp certificate & ask him to leave ASAP before he creates a scene. As u rightly said Empty Mind is a Devils workshop.”

Dear Friends

Have you all gone through the basic question put forward by Ms Rekha, I request you all to go once again.

She raised simple question i.e., One of her employee submitted his resignation and was relieved before the expiry of the notice period as he had completed his project and no new work was allocated to him. He was willing to serve the full notice period but we did relieve him immediately as there was no pending work from his end.

Now the employee is demanding notice pay in lieu of the remaining notice period as he was relived within 10 days.

Is the organisation liable to pay ??? After resignation is accepted , Can't the organisation relieve an employee in advance or late based on the nature of job & responsibilities ?

Only question left is Whether Organisation is bound to pay for the Notice Period still in hand of the employee if organisation relieve him/her at the earliest date.

Laws say appointment letter is a contract between the employer and employee. When an employee resigns voluntarily he is not entitled to notice pay from the Company. The Employer is only liable when it terminates the Contract, but here the termination is brought about by the other party hence you cannot claim compensation if you terminate the Contract. So, the onus of paying compensation lies with the party which terminates the Contract and not the other way round.

Ms Rekha Reading:

Thus, in any case there is no liability of an employer to pay for the remaining period once organisation has already relieved an employee after completion of his/her work, when employee has already resigned from his employment.

Regards

Arun k Mishra

Dear All,

I won't be amazed if you would call this act of the organization unfair if it would have treated you the same way. Ethically, the organization should make a distinction between employees who treat the organization as use and throw by serving a lesser notice period than stated in the appointment letter or the policies of the organization and other employees who are willing to comply with the policy of the organization. How do you feel when an employee shows his unwillingness to serve the notice period? You feel used, right? The same way the employee may feel if you relieve him before the notice period that he is willing to serve, without compensating for that. As per my understanding, feedback from ex-employees reflects a lot about the company's culture. Why burn bridges for some petty amount? Thanks again.

Sunil Joshi

I agree with Sunil. An employee who is willing to serve the notice period, however, the employer does not require his service anymore. It is only right to compensate the employee for the notice period which he/she was supposed to serve. No one would feel good when the service is no longer required of him/her.

For instance, I was supposed to work until the end of February. However, the employer would like to relieve me in January for whatever reason. The employer shall compensate my February salary for the reason that I would have earned that salary if I weren't being asked to leave early.

Again, this has been the law in Malaysia if an employee were asked to leave early by the employer.

Thank you.

I don't think the company is liable to pay because only if the company had asked the employee to leave.

Wishes,
EAFIL

Dear Mr. Shreyas Munshi,

I appreciate your time in going through my query and providing feedback. But "Please do not make unwarranted comments about my organization. I have only asked for the opinion of the HR fraternity on a particular situation. You have no right to assume or judge about the organization and make offending remarks about any member or organization."

We are here to help each other in seeking and providing a wider perspective on the topic.

Thank you,
Rekha

Dear Rekha,

It seems the employee does not know the method of formal communication. In his resignation letter, he is supposed to write either "with immediate effect" or with effect from a specific date; it seems he has loosely said he is willing to work till the end of the notice period instead of specifying that he would like to be relieved at the end of the notice period. And you have caught him! Well, it is his bad luck that your company wants to stick to the letter of the agreement and not the spirit of the agreement. Not paying him the notice pay might seem legally valid, but in my opinion, it goes against all norms of HR. Your company is also a confused and crafty setup; instead of having the courage to terminate the services of a redundant employee, it has waited (or maybe prompted even) for the employee to resign and has jumped at an unwitting mistake made by the employee.

Shreyas Munshi

Dear Mr. Shreyas Munshi,

I appreciate your time in going through my query and providing feedback. But "Please do not make unwarranted comments about my organization. I have only asked for the opinion of the HR fraternity on a particular situation. You have no right to assume or judge about the organization and make offending remarks about any member or organization."

We are here to help each other in seeking and providing a wider perspective on the topic.

Thank You,
Rekha

Dear All,

Thank you for your valuable inputs.

Mr. Arun Mishra: Thank you for your analysis of the opinion on CiteHR.

Special thanks to Sanjeev, Swastik, Ashley, Sunil, and Pooja.

Regards,

Rekha

Hi Rekha,

Can you clarify one thing? You stated that the employee had completed his project before time. What are the terms of his employment? Was he employed for a limited period of time or to complete the project only?

Please provide clarity on these matters.

Abhishek

Dear Rekha,

Thank you for the appreciation.

I would like to state to all that compensation cannot be claimed as a matter of right by the employee.

As for morals and ethics, most people are looking at the problem from a different angle which they are absolutely entitled to, and there is nothing wrong in it.

The talk about spirit has also been raised by Shreyas, which I felt was not correct because if you look at the spirit of the law, it is a safeguard provided to one party when the other party terminates the contract. So, it is up to the latter to utilize the safeguard.

In the end, Rekha, I feel your company's reputation would not be at stake if you do not pay compensation. I do not know how it will affect the reputation adversely. On the other hand, I feel it would enhance the reputation because it releases an employee as quickly as possible. This can be seen from the fact that the number of posts you have on this site from members facing problems due to non-release by employers.

Regards,

SC

Dear Member,

As per the undertaking/agreement, it is one month notice either side. If a breach occurs from the company's side, the company is at default. If a breach occurs on the employee's side, the employee is at default.

In this case, the employee has submitted one month's requisite notice to leave as per the prescribed norms of the company. However, the company has relieved him prior to the notice period date concurrently, whereas the employee is willing to work during the notice period.

It is clear that the company is at default; hence, they should pay the employee for one month.

Regards,
Yandamuri

Dear Rekha,

You're very welcome. We're here to help each other; who knows, in the future, I might need your help too. :) Anyway, please take note of my input. They're based on the law and practice here in Malaysia, which you might not find applicable to your country.

Cheers,
Ashley

I agreed with SK because:

The terms of appointment clause state that one month notice is applicable for both parties. If an employee voluntarily tenders their resignation without adhering to the one month notice period, the management is not required to pay. However, if the employee mentions in the resignation letter that the resignation is subject to a one month notice period, then the management is liable to pay.

Therefore, the contents of the resignation letter are important.

Ramakrishna N

Hello,

Notice period is a part of the employment agreement that should be followed. It is very simple; if the company asks the employee to leave the organization, it must give one month's notice period or one month's salary. In the case where the employee resigns, they should give one month's notice or one month's salary. There is no term in the agreement stating that the person is willing to continue, as per the law.

In your case, kindly go through the resignation letter and relieving order and follow the above rule.

Best wishes,

Senthil Raj
Legal Cell

If the employee left without notice, the employer would, by default, deduct one month's notice without reference to the employee. The employee has done justice to the company by giving notice, even though there was no project pending. He moved before you made yours, and so you are obliged and bound to pay one month's notice as per your agreement/terms/law.

Thios (Kenya)

Dear Rekha,

Since the employee has tendered resignation on his own, THE COMPANY IS NOT LIABLE TO PAY HIM ANYTHING even if he is relieved earlier. However, the company cannot deduct the salary for the notice period as the employee was willing to serve the notice period.

However, I would suggest you to incorporate a clause saying "In case the company doesn't require the services of the resigned employee during the notice period, it may relieve him/her without deducting/paying him anything for the said period."

This should clear the confusion created, if any, because of varied responses received from other members.

Regards,
Santosh

Hi,

Just thought I would add a point to the discussion. The notice period (which is normally between 15 days and 3 months) has a reasoning of its own. When an employee expresses his/her desire to quit a company, it is necessary for the HR/Personnel department to look for a replacement for the position that will go vacant after the employee is relieved. This is also important when the employee is working on critical projects/assignments in the company as a proper handover of charge is required for the smooth working of the company even after the employee quits. From the company's side, when an employee is terminated (apart from disciplinary clauses) or if the company plans for a lay-off, the employer is required to pay the notice amount to the employee.

But in special cases, the decision-making authority can waive off the notice period or relieve the employee before the end of the notice period.

In both cases, the notice amounts cannot be claimed. In the case mentioned by Ms. Rekha, the employee has expressed his desire to quit the firm. It's the call taken by the company to relieve him before the completion of the notice period. THE COMPANY IS NOT LIABLE TO PAY FOR THE DAYS WHEN THE EMPLOYEE HAS NOT SERVED THE ORGANIZATION. Moreover, action can be taken against the employee in case he/she has taken any leaves during the notice period as no leaves are allowed during the notice period.

I hope this helps in getting a clear understanding of the terms of employment. Please do correct me in case there's any mistake in the above-mentioned post.

Regards,

Avi.

Hi all,

Regarding the notice period, I have a different doubt. Is the period for notice should be the same for both employer and employee? In my company, the rule in this regard is if an employee wants to leave the organization, he/she has to serve a 3-month notice period or salary in lieu of it. Whereas, if the company decides to terminate any employee, it will serve only a 1-month notice to him. This is mentioned in the letter of appointment.

So, my question is, is it not an unfair practice on the part of the employer? Or is it legally allowed? What, as a person of the personnel dept, can we suggest to the management?

Regards,
Yashswa

Dear Rekha,

Notice Period is operative on either side. An employee relieved earlier than the notice period applicable is entitled to salary in lieu of notice unless:

1. The Employee has asked for early or immediate relief.
2. The Employee has specified a date for release that is within the operative notice period, and the employer is willing to relieve him on the date requested.

While the above is the legal position, organizations get away with acceptance of resignation at their own whims and fancies, as employees seldom go on a legal challenge.

Regards,

Ravi B.S.

Dear,

Can you tell me who wrote the message for any assistance, as I couldn't find the same on the site? Kindly do let me know as soon as possible.

Thanks & Regards,
Sunit
HR Professional
Globus Stores Pvt. Ltd.

Sunit,

On the right side of the page, there is an option to "Add a comment" - you could use that to post a reply to somebody's message. In case you want to start a new post, just go to the relevant topic (via the index), and on the right side, there is an option to post a new topic. Hope this clarifies your queries. All the best.

Dear Yashwas,

It is virtually not possible that the employee has to give 3 months' notice and the employer will give one month's notice. As per the Industrial Act of 1947, companies having more than 500 workers have to give at least a minimum of three months' notice to the employee before terminating him or 3 months' salary in lieu of the notice period. This is also mandatory for companies having more than 100 workforces. The Supreme Court of India has also recognized it as a cognizance if the company is not complying with the Industrial Act of 1947. You can speak to your HR manager for rectification.

Suresh

Hi Rekha,

It depends on the employee whether he would like to be relieved earlier. In case the answer is yes, then the company doesn't have to pay him for early relieving. But if the answer is no, then the company has to pay him his notice pay for early relieving.

Hope this answers your query.

Warm Regards,

Sanjay Ghanghaw
Manager HR
Maersk Group

Hi,

I wrote earlier that first of all, we have to be clear about the terms of employment because it is mentioned in the query that the employee has completed his project on time, which is why he submitted his resignation to the employer. If the terms of employment include the completion of the project (as a contract with the employee), then there is no need to pay the notice. However, if the employee is permanent and does not have a time contract with the employer, then the employer has to pay the notice.

I would like to include one more thing: if the employee wants to be relieved before the completion of the notice period after tendering the resignation, then the employee is liable to pay the notice.

Abhishek

Hi!

I would like to share some of my own experiences from my previous organization. My notice period was for 90 days, and I provided a proper 30-day notice to facilitate a smooth handover since I needed to join another organization at a specific time requested by the new company. I adjusted my 24 days of paid leave for this purpose, and for the remaining days, I was required to pay the gross salary.

During the initial 30 days, at least for a week's time, I did not have any work assigned to me. However, I still had to complete the full nine hours of work each day, with no leaves granted except for the weekly offs.

Regards, Jennifer Isaac

Dear all,

What I have understood from above is as follows: please correct me if I have misunderstood.

Case Resignation:
1. An employee needs to submit a one-month notice period to the company. If no notice period is given by the employee, then the company can either ask for one month's pay from the employee's side or can accept the resignation without asking for pay and can relieve him.

Case Termination:
1. The company will give a one-month notice period to the employee to leave the company. If, on completion, the employee leaves without notice, no pay is given. However, if the company wants to terminate the employee with immediate effect, then the company will provide the employee with the notice pay.

Thank you.

I agree with Swastik. In the terms and conditions agreed upon by both the employer and employee at the time of appointment, it talks only about the termination notice period and not about resignation. If an employee is choosing to leave of their own accord, they may be relieved as soon as they finish their liabilities.

An employee holding an important position has submitted his resignation along with a cheque in lieu of the notice. He wants immediate release.

We do not want to release him now. Instead, how can he give the cheque without the HR even accepting his letter or stating to him what to pay in lieu of his notice? He has calculated on his own and has given all papers. HR has been asked to return the cheque with a prompt reply but no mention of any release or resignation accepted. Pl. help.

Ann M

From the above, it is understood that the employee has not resigned but gave notice for resignation, i.e., his service ends on the day after the completion of one month. Hence, as per the law, he is eligible to get his pay for the notice period.

Regards,

As per the Model Service Rules, when the employee resigns by providing the required notice period and the employer relieves them earlier, the employer should compensate the employee for the balance of the notice period.

Balu

Hi,

I believe you guys can answer this as well. I have put down my resignation notice on July 13th and am giving 2 months' notice period till Sept 12th. The contract says I need to give 3 months' notice on either side. Now, the company is ready to release me by July 31st.

Questions:

1) If they are releasing me early, are they liable to deduct 1 month's salary (for the month I could not serve the notice period)?

2) Should I be eligible for salary in lieu of the period for which I was willing to work had I not been released earlier? (I mentioned in the resignation letter that I'd be glad to be relieved as early as possible.)

My point is if they don't need a notice period of even 2 months (which I am ready to serve), why do they need to cut a month's salary (a month for which I can't serve [1/3] if I am being released even in less than 2 months).

If there is a stipulation of a notice period, it should have been spelled out very clearly in the appointment letter for early release. Suppose the employee wants to get relieved earlier than the prescribed period, will you recover for the shortfall or not? The same philosophy shall be applied vice versa. No advice from others is required for dealing with an employee's notice period.

Dear Rekha, while I agree with the encompassing and comprehensive answer given by SC, at the same time, I would like to reiterate that if only the interpretation of the law was required from us "Human Resource Managers," then the basic qualification for HRMs should have been LLB. I personally feel that when deciding on the notice pay, you should look into the following:

1. Employee's tenure and performance in the company.
2. Reasons for not assigning him any more projects.
3. What if he had not submitted his resignation on his own?
4. Was he informed that no notice pay would be given to him when he resigned?
5. Last but not least, put yourself in his shoes.

Please understand that there can never be textbook solutions to such situations, and each case must be handled while considering the circumstances.

All the Best... May the Human in us Resource Managers Win.

Warm regards to all,

Amit

It is well understood that the company is required to pay for the unserved notice period. I have a similar situation and would like to know if the employee is entitled to full benefits that were being earned immediately before submitting the resignation. How should the amount to be paid for the unserved notice period, which the employee was willing to serve, be calculated?

Regards,
SDG

Notice Period and Financial Implications

For those who argue that the company should not pay for the notice period when an employee voluntarily resigns, consider this: Suppose the notice period is three months from either side. When the company relieves employees immediately to save on salary costs during the notice period, don't you think it should be treated as unfair?

While resigning, employees assume they will receive a salary for the entire notice period and remain financially secure. They plan their finances with this notice period in mind. Some people, without any job offer in hand, resign thinking they will find a new job during this notice period. In the case of a new offer, employees must consider the entire notice period before committing to the joining date of the future company.

We can't guarantee that the next company will allow them to join before the committed joining date. Think about the family person... the EMIs, school fees, medical expenses, groceries... Who will pay during this period of unemployment? Don't you think that this clause favors only the employer? Don't you think the employer should obtain consent from the employee before relieving them before the notice period is over?

Regards

Dear all,

My last company deducted notice pay in my full and final statement, but there is no confirmation letter provided by this company to me. At the time of joining, the letter clearly mentions in the appointment letter that after the confirmation letter, you are eligible to receive notice pay or notice pay recovery.

What should I do?

Thanks and regards,
Ravi Kumar

Hi Folks,

I resigned from my company on March 9th, 2018. The employment contract had a one-month notice period or salary in lieu of for each party. The company paid me for 30 days and revoked my access immediately.

What will be the last date of employment, March 9th, or April 9th, as the firm paid through till April 9th? Also, was I free to take up employment on March 10th if the firm relieves me early?

Regards,
Abhishek