Should Companies Pay a Month's Salary if They Want an Employee to Leave Immediately?

Hi,

We have been having this debate for a while, and I seek the advice of all of you on this issue. If an employee resigns and gives the company one month's notice, but the company wants the employee to quit immediately, should the company pay the employee a month's salary because they are relieving him early?

Regards,
HR Prof

Hi HR Prof,

If the company's policies have incorporated the procedure to give one month's notice, then this is something serious where personal discretion has no chance. If no standard policy is in place, salary need not be paid.

In another point of view, it is not a good practice to prepone the relieving, which could lead to misunderstandings and even affect the culture of the stable associates.

Regards,
Srilatha

Hi,

Of course, the company has to pay a notice pay because it is the company that wants the employee to quit early, not the employee, as he has legally resigned and is ready to render his services during the notice period. The company will have to pay the notice pay in this situation.

Thanks,
Bibhutosh Bhadauria

Most organizations these days include a two-way clause stating that an amount equivalent to 1/3 of a month's salary needs to be paid in lieu of notice pay. It is also included that the employer has the discretion whether or not to accept salary in lieu of notice. The idea behind the notice period is that the organization can find a replacement, and there can be a proper handover. Thus, it finally rests on the management whether or not to accept notice pay.

Regards

Hi All,

The company need not pay any salary or compensation for relieving the person earlier than the expiry of the notice period. It is the prerogative of the employer/company to relieve anybody before the due date of the notice period. However, if the company insists him/her to stay until the last day of the notice period, then they have to stay; otherwise, deductions for the short notice period will apply.

Also, the terms of employment and notice period will have to be appropriately worded, covering the above-mentioned clauses.

With best wishes,

S. Amarnath

Hi HR Prof,

The company will have to pay the notice period amount because it is at their discretion, whereas the employee is ready to serve the notice period. So if he is willing to remain there until the end of the notice period, then we will definitely pay him salary up to that date. If the company asks him to leave the organization before that, then he will have to pay the salary for the notice period in lieu of it.

The notice period applies to both sides, and it is customary to arrange for a replacement and handover all documents to the replacement.

Regards,
Amit Seth.

Yes, the company has to pay salary in lieu of the notice period or as per the conditions stated in the Appointment letter.

Regards,
Mahesh Patel

It totally depends upon the appointment terms and conditions. If the terms and conditions state that either party will have to give one month's notice or one month's salary in lieu of that, then, in that case, the company is liable to pay the salary to the concerned employee.

I agree with Bibhutosh Bhadauria. If it is mentioned in the company policies that in both cases, the employer-employee will give one month's notice or pay in lieu of it, then it is the employer who will pay the employee for shortening his notice period without mutual agreement.

Sincerely, Vandana Sharma

The document that confirms the organization's policy on the notice period is the Appointment Letter. The clauses stated in the Appointment Letter would give an idea of the situation in that organization. Above everything else is the stance that the management decides to take. So, always be on the right side of the company management.

Dear all,

It is simple. The notice period will specify a date on which the resignation will come into effect, i.e., after 30 days. The Company has to pay the salary until the notified date and can release the employee earlier.

V. Sounder Rajan

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Dear all
In my appointment order, our company is mentioning following words."
· In the event you resign after confirmation, you will be required to give three month’s notice or three month’s salary in lieu of notice"
What is the meaning for this, whether we will be given three month notice or three month amount to the mangement. but they don't mentioned any thing what they paid if they relieve immediately.
2nd query, now they used regular practice that if they relieve immediately they will give one month salary extra to the particular person.
My important query is that they ask us three month notice or three month pay and they only pay one month if they relieve us. what is our approach whether we should ask three month from them or accept one month. they dont give in words their points of notice amount. kindly explain and clear for handling the situation.
regards
sai

Dear Sai,
1st query:
You have to inform before 90 days or You have to pay amount for that period .
2nd Query:
Its totally depend upon the circumstances & Mft discretion , may be waived NPS or not ? but workmen category can file a claim with concern state appropriate authority.
Mahesh Patel

Dear Sai,

1st query: You have to inform before 90 days or You have to pay the amount for that period.

2nd Query: It's totally dependent on the circumstances and Mft discretion; it may be waived NPS or not? But workmen category can file a claim with the concern state appropriate authority.

Mahesh Patel

Yes, Mr. Mahesh, that means if they insist on giving three months' notice or three months' pay to the employee as per the appointment order (which also includes if the employer insists on the employee leaving immediately), then the employer should pay three months' amount to the employee. Is it right? Kindly confirm.

Regards,
Sai

Hello seniors,

I am trapped in a tricky situation. I've served a 15-day notice instead of the required 3 months as per the company's appointment letter. Moreover, the company has a policy of 3 months in lieu of 3 months' basic salary.

The company has accepted this through a corporate email. However, now that I have joined a new organization after a couple of months, the company has sent a notice through a lawyer stating that they have rejected my 15-day notice, and I am required to pay 3 months' basic salary.

I am willing to pay the unserved notice period (in this case: 2 months and 15 days). I am aware that this is an unethical practice by the company.

What could be my options? Even if they do not consider my 15-day notice, are they obligated to pay me for those days?

Thank you.

Regarding the query of accepting the resignation and then sending a lawyer's notice by the employer to the employee, he can file a suit (if he wishes) against the company and claim compensation only if the appointment order clearly states that the company and employee will have to give a 3-month notice period. Am I right? Please clarify.

Please help me with my query! Any suggestions or views would be highly appreciated.

Suresh.AV

Hello Balaji,

Thank you for your help. Here the problem is: the company is also not addressing any issues regarding my last month's salary. I believe the company has disregarded my 15 days' notice, which I find unethical. Should I consider hiring a lawyer to respond to my company's legal notice demanding my full month's salary, full and final settlement (including PF settlement, experience, and relieving letter), in order to receive the equivalent of their three months of basic salary?

Thank you.

Recently, my startup company asked me to leave during the probation review citing business reasons. As per the offer letter, I should have been given one month's notice even in the case of termination. However, I was asked to leave in a week. When I referenced the one-month notice period stated in the offer letter, they threatened to issue a termination letter and provide negative responses to all future calls regarding reference checks. Consequently, I had to accept the situation as it was. Please advise me on how to proceed in a professional manner.

Thank you.