Can My Company Force a 3-Month Notice Period and Refuse a Buyout Option? Seeking Advice!

I am working in an MNC, having almost 6 years of experience. I joined my present employer in December 2009, and due to personal reasons, I have decided to get released from my company. My notice period was 1 month based on the offer letter.

On May 2010, the company sent an advisory mail stating that the notice period has been revised to 3 months for all employees, effective from June 2010.

When I resigned from my present employer after June 2010, HR told me that a 3-month notice period is mandatory. Meanwhile, I have received a release from my client and my supervisor, and I will be on the bench for the rest of the 2 months. Therefore, I asked my HR to release me, and I will pay the compensation amount in lieu of the notice period. My HR is stating that this decision has been taken at the organizational level and the organization is not accepting any buy-out in lieu of the notice period.

Can the company hold employees based on such a stubborn decision? Because the buyable option is available based on the offer letter, I would eagerly opt for the same, but HR is telling me that the company is not ready to take the amount; rather, the company will take the cost overrun and pay my salary.

I do not understand whether there is any way to get released from my company. They also told me that if I go and join somewhere else, they will sue me stating "dual employment" even though I have already resigned from my present company. Can the company sue an employee even after resignation? I have already stated my consent, so why would the company hold me and jeopardize my career?

Please tell me what to do?

I too am in a similar situation. I am working with a big private company. Upon joining the company, the appointment letter states, "On separation - employee or employer can give three months' notice OR payment in lieu of the notice period."

On July 2nd, I submitted my resignation at 9:00 a.m. to my reporting manager. Surprisingly, at 9:45 a.m., he forwarded me a policy via email dated June 27th, stating, "Payment in lieu of the notice period is no longer permissible, and the employee must serve the full three-month notice period."

I have already finalized a deal with a new employer and committed to joining within 1-1.5 months. They have agreed to compensate the payment required for the notice period. I was confident due to the clause in the appointment letter and recent examples.

Now, I am in a difficult situation. The new company wants me to join within 1.5 months maximum (as agreed earlier) and with a relieving letter.

However, my current company is adamant about not allowing me to leave before the full 3 months (I have discussed this with HR and the business head without success) and is referencing a policy of which I was not previously aware.

These days, companies are manipulating policies and compelling employees to serve the notice duration.

For both of you, any such kind of notices (in amendment) should be communicated to employees in writing or in any other manner that is ready to be proven; otherwise, they are not acceptable. This is the ethics and policy that every company follows.

Dear,

The notice period cannot be changed without mutual agreement. Therefore, your offer to buy out the notice period itself is genuine. Dual employment will arise only when you are working. Please consult a lawyer in your hometown and send a legal notice enclosing the Demand Draft for your buyout notice period. This will close the issue, and your lawyer can also request the relieving letter. Even if they don't issue the relieving letter, with a legal notice and proof of payment, your fair play can be easily proven.

With Regards,
Regards

Thank you, Rajan, for your invaluable input.

Points to Consider

1) In my offer letter, it is stated that "I will abide by any change in policy that would be taken based on business need." Though such clauses are arguable, the company can easily aggrandize any rule and regulation based on such clauses. Signing to any such clause also reserves rights to the company regarding when and how rules will be changed.

2) Is there any regulation on the notice period based on service periods? If a person has not served more than seven months, why would they serve a 3-month notice period? A person might consider changing employers early only if they find huge disappointment in work compared to what was proposed at the time of joining or due to a serious personal issue. If both scenarios are true, how can an employer block that resource by stating a 3-month notice period? I think regulations are made not for employees, but for employers. That's why several companies have different structures and clauses in offer letters. It's how they skin a cat.

This is very ridiculous that the same company, which may be very particular about serving a 3-month notice period, is actually asking people to join within 15 days!

@ratushar: As you are in the same predicament, I think you can ask your new employer to stretch the joining time a bit.

Thanks

Thanks, I have tried talking to my new employer—they are ready to offer two months, but three months are not acceptable. In fact, in my case, I was not aware or informed about such changes in the notice period while accepting the offer from the new employer or even at the time of putting in my papers. Now they have come up with a policy and are forcing me to follow that.

As suggested by you, I am trying to talk with some labor law consultants and get my fundamentals clear before I talk with my current company. I am looking for a good consultant in Mumbai—please share if anyone is aware of one.

Regards