Is It Legal to Extend Notice Periods from One to Three Months in Noida? Seeking Advice

Notice Period Extension Issue

Recently, we have carried out an exercise to identify 'Key Resources' of the company. The management, after careful evaluation, has decided to revise the notice period of key resources from one month to three months, keeping in view their criticality and business continuity if they leave.

However, the management also wants to include a clause that states: "In the event of termination of employment by the staff, the company may accept a shorter notice period at its absolute discretion should the company be able to fill the position."

The issue is that their original notice period was one month. Is it legally permissible to extend the notice period of staff from one month to three months? Does the employer have the right to impose this decision, which I sincerely doubt, as the terms of employment are to be mutually agreed upon? Our company is located in Noida. Does the UP Shop and Establishment Act prevent us from extending the notice period?

Additionally, a few staff members have objected to this decision. Can you please guide us on how this can be implemented?

Kindly provide your inputs at the earliest.

Best Regards,
Manu

Respected seniors,

Kindly help me with your expertise on the notice period extension issue:

Recently, we have carried out an exercise to identify 'Key Resources' of the company. The management, after careful evaluation, has decided to revise the notice period of key resources from one month to three months, keeping in view their criticality and business continuity if they leave.

However, the management also wants to include a clause stating that "in the event of termination of employment by the staff, the company may accept a shorter notice period at its absolute discretion, should the company be able to fill the position."

The issue is that their original notice period was one month. Is it legally permissible to extend the notice period of staff from one month to three months? Does the employer have the right to impose this decision, which I sincerely doubt, as the terms of employment are to be mutually agreed upon? Our company is located in Noida. Does the UP Shop and Establishment Act prevent us from extending the notice period?

Also, a few of the staff have objected to this decision. Can you please guide how this can be implemented?

Kindly provide your inputs at the earliest.

Regards,
Manu

Dear Manu, please understand that no other company will wait for three months to join. If there is a vacancy in your company and I come, pass the interview, discuss salary, and mention that it will take three months to join as I have to serve the notice period, will you accept?

Why Are Notice Periods Given?

They exist so that the company can quickly identify the vacancy, attempt to fill it, and new joiners can better understand their roles and responsibilities from someone who previously handled the same job. I believe there is a court decision stating that three months is not valid. If someone challenges your decision, you will lose the moral high ground. Therefore, please do not try to impose such rules as this may affect employees' emotions and willingness to work.

Instead of extending the notice period, please focus on why your employees are leaving and try to address and reassure them.

Regards,
SIDMAN

Dear Manu,

Notice Period Extension and Policy Change

The extension of the notice period, as a subject matter of policy change, can be introduced by the employer with the condition of mutual agreement from both parties. Subsequently, you would be required to intimate the same in writing. Apart from that, the employer has the right to introduce any valid changes in staff/employee regulations. Usually, our services are governed by such terms, conditions, rules, regulations, and policies as may be applicable to a particular position or grade from time to time.

Thanks & Regards,

Sandeep Rai, (HRD) RPG Group.

Dear ManuB,

Does the term "3 months notice period" apply to both parties - employees and employers?

Thank you.

Yes, the three-month notice period applies to both parties here—i.e., the employer and the employee. However, the management also wants to include a clause stating that "in the event of termination of employment by the staff, the company may accept a shorter notice period at its absolute discretion, should the company be able to fill the position."

Thank you.

Dear Forum members, thank you for your inputs. I agree that no employer or company would wait for three months for someone to get onboard. However, there are a few big companies with a 3-month NP policy for their senior managers or key resources, such as IBM.

We are not experiencing any exits or separations, and our company has an attrition rate of 2% for this year. As part of the business continuity plan, the management wants to implement this change.

I want to clarify that if the staff does not accept this change, the employer cannot impose this decision on them.

Dear All,

Our company is also in the process of revising the notice period for employees based on their designation. I kindly request your suggestions on the following:

- Do we need to have any documents signed by employees acknowledging the revised notice period?
- What actions can an employer take if an employee refuses to accept the extension of the notice period (and the employer wishes to retain the employee)?

Regards,
Ruchi