Extending Notice Period from 15 Days to 3 Months: How to Communicate the Change?

Hi,

Our company has decided to alter the notice period for employees from 15 days to 3 months. The 15-day notice period is mentioned in the appointment letter for all employees. Can anyone guide me on the template for altering the notice period?

Thanks,
Anila

Since there is an alteration in the earlier agreed contract, you need to give notice to all the employees about the change in the contract. I read somewhere within this forum that a 21-day notice is required before amending any changes to the contract. If everyone agrees, it is fine, and this gets legalized. I don't know what happens if one or more disagree with this change.

A one-page addendum to the existing appointment letter indicating the change may be provided to all the employees. You must also ensure that all employees agree to it by acknowledging through a signature. A copy will remain with the employee, and another will be kept by the employer as part of the personnel records. This will possibly save from future complications.

Dear Anila,

You should send them a notice circular stating that in another three weeks' time, the clause "Notice Period" mentioned in your appointment letter will be changed to "three months". Then, you need to include this as a clause notice and have it signed by the employees individually and maintained in their Personal File.

Please note that a three-month notice period is not acceptable by law. The maximum you can keep is two months. If you have any doubts, please write a private message.

Dear Mr. Mahesh,

I request you to email the reference points that set guidelines on the notice period, as I am facing a similar situation at my office:

Scenario 1: We have proposed to increase the notice period of a few employees (due to their technical expertise) to 2 months instead of one month, and they are refusing to sign the amendment.

Scenario 2: An employee with a 3-month notice period is leaving; however, he is giving only 36 days' notice period, and the rest needs to be deducted as notice period payable. I would like to know the formula based on which notice pay is deducted. Is it Gross Salary per month, CTC per month, or only Basic + DA? He has 47 days of leave to his credit; however, we are encashing it as a payable component in his final settlement but not adjusting the same in lieu of his notice period as that would amount to dual employment since he is joining the other company immediately after leaving us.

I request your inputs and comments on the same.

Thanks,

Muskaan

Anila,

Changing conditions depend on your organization. If you have a union, you have to give notice as per the ID Act. Otherwise, if you have standing orders, those have to be amended. If you do not have such problems, send a circular to all employees explaining why you want to introduce a three-month notice period. For all future appointments, you can implement a three-month notice period. If your existing employees do not agree, you may call for a meeting with staff, including all HoDs.

Regards,

Dear Muskaan,

The formula is nothing but the amount fixed by the company for the breach of the notice period by the employee, divided by the number of days in the notice period, multiplied by the number of days left in the notice period without serving.

For example, if the notice period is 2 months, the breach amount is Rs. 50,000, and the employee served only for 15 days, the calculation would be as follows:

50,000 / 60 (2 months) * 45 (number of days not served) = Rs. 37,500 (to be collected from the employee).

Hope this clarifies things.

Best regards, [Your Name]

If you are representing a non-unionized establishment, things would be pretty simple. However, consult your legal advisor and avoid all kinds of possible legal issues.

1. You can announce formally (it's better to send an email to all applicable employees) that management is planning to change the notice period to 3 months and request employees to submit objections, if any, within a week's time. You can share the amendment details in the email.

2. Once the feedback time is over, you can share a printed amendment to appointment orders with all employees and collect the signed copies with immediate effect.

3. If someone does not agree to the amendment, you can try to convince them to accept it. If persuasion fails, you may need to provide a 15-day notice period/pay and relieve them from service.

4. If you opt for a democratic approach, there is no guarantee that the management decision can be implemented. This may create unnecessary tension and affect work.

However, I have a question: Why do you want to increase the notice period? If attrition is the issue, I think this change may not reduce it.

Dear Mr. Mahesh,

Thank you for your input. However, I would like to understand how you decide the breach amount. Do you consider an employee's 60 days' basic, gross, or total CTC for two months to calculate this breach amount? I request clarification.

Thank you.