Understanding Payment in Lieu: Employee Resignation and Compensation Policies

Hi,

I want to know if an employee wants to leave his job without giving one month's notice period, does he have to provide "payment in lieu"? As per the contract, if the payment in lieu is equivalent to one month's salary, is that based on just the basic pay or the gross salary of the month?

That depends on the company's policy. Usually, it is basic, but a number of companies use the gross.

Make sure that you define what you mean as 'salary' in the case of the notice period in your appointment letters. That will make things very clear.

HR professional's comments are very precise and complete in this regard. Last time I discussed this subject with my advocate, he said there are Supreme Court rulings to support this point.

KKT

We strongly adhere to the employment terms and conditions as the contracts we have state that one month's notice or payment in lieu thereof if the party resigns. We then state that this is at the discretion of the manager.

For example, it isn't fair if the employee needs to resign immediately due to unforeseen circumstances beyond their control. This comes down to a company policy, and most organizations will agree that you should not punish an employee for their resignation if it is for a legitimate reason. :)

Hello,

As per the contract - yes, usually basic, but that again depends on the salary as a whole and varies from company to company. However, if the supervisor waives off the same, then it may also be taken into consideration.