Extending Notice Period to 60-90 Days: How Do I Implement This Change?

Hi all, currently, as per our policy, we have a notice period of 30 days. Now, I want to change it to 60 to 90 days for all employees. Please help me with the procedure I need to follow.

Thanks,
Raj

Notice Period Revision Procedure

Serving of notice for any number of days should be on either side. You may do the following:

1. Revise your existing policy and fix either 60 or 90 days. Get it approved by the management or an authorized person, and publish it through the notice board, intranet, or your existing communication channel.

2. Prepare a notice addressed to all existing employees to inform them that the management has decided to revise the notice period from 30 days to 60/90 days (on either side) with immediate effect for all existing employees on rolls, as of date. Accordingly, the notice period of 30 days mentioned in the appointment letter of respective employees stands revised to 60/90 days with immediate effect, which please note.

3. Paste the notice on all notice boards.

4. Make copies and put them in respective personal folders for future reference.

Thanks,
Raj

Internal Policy Change Procedure

This is indeed an internal policy of the organization. However, if your company is certified against any of the systems such as ISO or CMMI, then you will have to get the required approval from the authorized personnel or policy decision-makers in the organization. The standard operating procedures and policies need to be revised based on the approval from the management.

Once this is completed, the most important thing is to inform all employees of the changes in the notice period. This can be done by posting on notice boards, or if you have an online system, the same can be done through the online system. You can also circulate emails; please make sure that you retain a copy of the communication sent to the employees.

For further clarifications, please write to me at [Email Removed For Privacy Reasons].

Regards,
Mohammed Azmath

As advised by Mr. Gopal, make copies of the revised notice period and obtain signatures from the employees stating that they have read and understood the contents and agree to serve the same.

Regards,
[Name Removed For Privacy Reasons]
[Phone Number Removed For Privacy Reasons]

In my view, you should first get your certified standing orders modified because this clause is given in certified standing orders. After that, you should make a small contract referring to the earlier clause of the appointment letter, and it should be signed by both parties, the employer and the employees. If someone does not agree with that clause, then you cannot force them to sign.

Of course, it is an internal policy, but as an employer, you are bound by certified standing orders/appointment contracts.

Regards.

Why do you want to do this at all? Your organization has to be equally liable.

You cannot unilaterally change the terms of service for existing employees. Doing so would alter their service conditions (to which the company has already contracted with the employee), which would violate the standing order and the law in general. You must have the consent of all such employees before making any changes. Do not put innocent employees at risk by making unilateral decisions. This is considered bad HRM practice. Such a drastic move may even backfire and disadvantage the organization.

Simply posting the notice on the board or informing the employees is not enough to comply with the law. If you have a union, it is more appropriate to seek their consent first.

Only after that can you modify the Standing Orders and have them reviewed by law enforcement agencies before putting them into practice.

Otherwise, it could be considered an Unfair Trade Practice and cause trouble for your organization sooner or later. Additionally, it may negatively impact the organization's branding due to unfavorable service conditions.

There are other ways to retain employees rather than forcing them to serve longer notice periods or pay a significant sum. Remember, an unwilling employee is a liability to the company. Once an employee decides to leave, they will do so, regardless of any restrictions in place.

You may put a notice on the notice board informing about your intentions to change the notice period. Call for objections from the employees (within 7 days). Prepare yourselves to face objections, i.e., either to substantiate or to overrule the objections. This process is like a Notice of Change as we do in the ID Act (Section 9A). Thereafter, depending on the response from the employees, you may decide to implement the same or not. If you receive tremendous opposition, please drop the idea for the existing employees. However, you may do the same for all future employees by mentioning this clause in their appointment letter.

Yes, this is the proper and correct procedure for implementing any proposed change in the service conditions.

Why You Should Reconsider Changing Service Conditions

Your organization has to be equally liable. You cannot change the terms of service for existing employees unilaterally. If you do so, it will be a change in their service conditions (to which the company has already contracted with the employee), violating the standing order and law in general. You need the consent of all such employees before making any changes. Do not hold innocent employees hostage with unilateral pronouncements; it is bad HRM practice. Such a drastic move can backfire and harm the organization.

Merely posting on the notice board or informing employees will not fulfill legal requirements. If there is a union, it is more appropriate to obtain their consent first. Only then can you modify the Standing Orders and have them approved by law enforcement agencies before implementing them. Otherwise, it may be deemed an Unfair Trade Practice, causing trouble for the organization in the future. Additionally, it could negatively impact the organization's reputation due to unfavorable service conditions.

There are better ways to retain employees than forcing them to serve longer notice periods or give up significant amounts of money. Remember, an unwilling employee is a liability to the company. Once an employee decides to leave, they will do so regardless of any restrictions.

Regards,
Vasant Nair

Best HR Practice for Notice Period Change

In my opinion, the best HR practice is to include a clause regarding the change of the existing notice period to 60/90 days in the annual increment letter sent to employees. All employees are likely to accept this change, and you should receive signed acknowledgments as well. If you have a service condition manual or HR manual, you can make the necessary amendments and then issue the updated copies to all employees.

Wishing you all a healthy year in 2011.

Regards,
Balakrishnan K

Amendment of Company Policies

Amend your company's rules and regulations as per the new policy and have them signed by the competent authority. Circulate them to all employees. Don't forget to obtain signatures from all existing employees. In the future, include a clear notice period in all appointment letters.

Regards,
M. Haque

K. Balakrishnan: In my opinion, as per the best HR practice, if you have a practice of issuing annual increment letters to employees, you can add a clause changing the existing notice period to 60/90 days. All employees are likely to accept this, and you will obtain signed acknowledgments as well. Based on this, if you have a service condition manual or HR manual, you can amend and subsequently issue the amended copies to the employees.

Wishing you all a healthy year in 2011.
Balakrishnan K

M. Haque: Amend your company's rules and regulations as per the new policy, and have it signed off by the competent authority, then circulate it to all employees. Do not forget to obtain signatures from all existing employees. In the future, ensure all appointment letters include a clear notice period.

This is sheer coercion. You are doing it with an ulterior motive. This would constitute a breach of the contract entered into with employees at the time of employment and a breach of trust. The move appears ill-intended and baseless. Human resources are the most important resource. Without them, all other resources such as financial resources, plant & machinery, raw materials, and everything else are rendered useless. Why would you coerce employees into such actions just to assert your authority over innocent employees?

Bob Gately also asked you, "Why do you want to make the change?" I had the same question, but there has been no response so far.

Considerations for Changing Notice Period

1. Ask yourself what advantages you are gaining from this change.
2. The present system of 30 days for temporary/unconfirmed personnel and 90 days for confirmed personnel is universal and time-tested.
3. Before you put it up for decision, analyze the last 20 separations from the organization and identify the problem areas faced by the organization. Also, study whether the change to a 90-day notice will help you overcome the problems faced or if it will be detrimental.
4. These policy changes are not made on whims and fancies; they involve deep analysis.
5. Approach a nearby management college to study and recommend what would be best for you.

Happy New Year,

Regards,
Dr. Ram
Professor HR

I apologize for the delay in my reply. Currently, I am facing several retention issues. Additionally, some of my former employees are poaching my current employees, who are crucial to our operations. We have essential products that require skilled individuals, but the challenge lies in training them only for them to leave, impacting our production.

Previously, we were open to allowing employees to leave, but it has become increasingly difficult to find and train suitable candidates within a month, given the nature of my industry. As a result, I have made the decision to change our policy.

Raj

Amend Your Company's Rules and Regulations

Amend your company's rules and regulations according to the new policy. Ensure they are approved by the competent authority and distributed to all employees. Don't forget to obtain signatures from all existing employees. In the future, provide all appointment letters with a clear notice period.

This is sheer coercion. It appears to be driven by ulterior motives and goes against the contracts signed with employees upon their employment, breaching trust. Human resources are a vital asset; without them, other resources like finances, machinery, and materials become ineffective. Coercing employees into such actions is unethical and unfair to innocent employees.

Bob Gately and I have both asked why you are making this change, but we have yet to receive a response.

Understanding Employee Policy Changes

You just cannot simply change or modify anything related to employees at any time. For that, you should follow certain norms laid down in labor laws. Otherwise, you will find yourself at the wrong end of the law.

I think you should get your standing order modified and keep in mind that even when you want to retrench someone, you also have to give the same period as notice or salary in lieu thereof.

Is there any legal action taken against an employee who leaves the job without completing the notice period? Please suggest.

Regards,
SNEHAL SHAH

Dear Boss, I have my own doubts about why you want to make this change.

1. Have you paid salaries to your employees for the last 3 months?
2. How many people are working in your organization?
3. Is there a chance that you are making this rule to ensure that the people who are resigning now due to your non-payment of salary for the last 3 months will not get their settlement dues once this is effected?

Sorry, but considering the way today's telecom companies are functioning, I have no option but to raise these doubts.

Regards,
Prasad

There are various strategies to retain the workforce effectively. Offer production or sales-based incentives to motivate employees. Ensure that their salaries are competitive to attract and retain talent. Provide loan facilities for long-term needs such as housing, education, vehicles, or household goods. Organize monthly outings for employees and their families, along with other benefits and welfare schemes. Consider establishing a school and a daycare facility for employees' children.

Additionally, you can reduce costs by implementing a 5S Audit in your organization. Please find the 5S Audit sheet attached for your reference.

Regards,
Raj

Dear All, I think Mr. Malik is right. You cannot change the notice period for existing employees by a notice without modifying your standing order. It can be challenged anytime by anybody.

Question to Mr. Malik:

Dear Mr. Malik, this is my question to you: What should those do who don't have a certified standing order and are following a standing order where the model standing order does not mention anything about the notice period?

Thank you.

Dear Raj,

I do not think the procedure is the crucial part. The issue is a change in mutually agreed basic conditions of service, which may result in a loss of trust between the employer and the employees. This change was implemented in an organization I know of, and it resulted in a lot of resentment among employees. The organization could not achieve its aim of improving the retention levels; instead, it led to more exits and higher attrition.

Regards,
Col IP Singh

Hi Raj,

Why don't you define the Notice Period Policy based on employee category/grade? Please do consider employee hierarchy before implementing your policy, as it may ease your job.

I strongly suggest not forcing any employee beyond their limits by implementing policies that are not advisable. Since you are also an employee, analyze the impact of this policy on yourself if implemented.

Regards,
khadir

To draft a change in the notice period letter, please seek approval from your Director or General Manager. When issuing the revised notice period, ensure to obtain acknowledgment from all employees.

Proposed Change to Notice Period

Currently, as per our policy, the notice period stands at 30 days. I propose to extend it to 60 to 90 days for all employees. Could you please guide me on the necessary procedures to implement this change?

Thank you,

Raj

Dear Raj, you should draft a change in the notice period letter and obtain approval from your Director or General Manager. When issuing the letter, ensure to obtain acknowledgment from all employees.

No, this is not a solution. The Boss/GM/Management is one party to the contract of employment, and the employees are the other. Even if the employees sign the amendment, it is not automatically applicable. You must have the same vetted by the Labour Inspector's Office to ensure compliance with the law, non-coercive tactics, and general agreeability to the employees.

On the other hand, if all the employees collectively propose a different amendment in their contract to accommodate their preferences, will the management agree to it? It is a serious misconception that management can act without constraints. Companies that fail to take care of their human resources cannot thrive. The issue of unexpected exits, high attrition rates, and staff turnover lies elsewhere and requires serious attention.

Regards

That is the reason we have a clause in the offer of employment agreement. In the event of any changes to the agreement, the company reserves the right to amend the agreement without prior notice. This amendment will be communicated to the employees, and their acknowledgment will be kept in their personal file.

Those who are not willing to accept the change will be given the option to leave the company.

With warm regards,

S. Bhaskar
[Phone Number Removed For Privacy Reasons]

This clause by itself is ultra vires as it infringes on the rights of the workers/employees. If the management does something that is in contravention of any other clause in the appointment letter, this clause will have no force and is ultra vires ab initio. How can you alter a contract at will unilaterally? If management perceives such a right under the employment contract, employees have the same right. Then, each and every employee will start dictating their own terms of employment at any time, at will.

Hello all, wishing you all a very Happy New Year! I just want to know why you want to change the notice period. Thirty days is normal and is followed by most companies.

Thanks,
Seema Singh

What remedial action is required to enhance the notice period from 30 days to 90 days? In my company, after 3 years of service, we are obligated to give a 90-day notice; otherwise, our PL will be deducted for that period. Please advise on what steps to take in this case.

With warm regards,
S. Bhaskar
[Phone Number Removed For Privacy Reasons]

You can only make the fresh condition applicable to the recruitment made after the new conditions are announced for new employees only. To retain the old employees, introduce incentive schemes. Please refer to post #7. You have to comply with the law. Employees are not slaves or bonded laborers. Even bonded labor is unlawful.

The 30-day notice period is not the problem, so increasing it is not the solution. Even worse, if applicants learn of the 60/90-day notice period, there will be fewer applicants to hire. Applicants will know that the employer is trying to make new hires pay for the employer's hiring and managing mistakes. Why should applicants risk getting stuck working for such an employer?

US employees generally give a two-week notice or longer, depending on the employer's policy of how much is paid when employees are laid off. Excessive employee turnover is a management problem that must be fixed by changing what the managers do, not by imposing new penalties on employees.

I have gone through the discussions. First of all, if you are covered under the Industrial Disputes Act, 1947, legally you cannot change a condition of service without complying with the provisions under Sec. 9A of the Industrial Disputes Act, 1947, or if a dispute is pending before an authority under the Act, ignoring the provisions under Sec. 33 which prohibits/regulates the change of conditions of service during the pendency of an industrial dispute.

It is advisable to get it included in a tripartite settlement or a bipartite agreement at the time of such settlement/agreement being signed.

One cannot be complacent calling it an internal management policy as it has serious legal consequences. Moreover, it is a double-edged weapon as you have to give notice or pay for a notice of an equal period when the necessity of termination arises. Resignation is only the counterpart of discharge simpliciter (innocuous termination).

In case you are in a hurry concerning attrition, you can do so following the provisions of the law.

In fine, advice without specific knowledge of the case tends to result in vagueness which may jeopardize one's interest.

Regards,
Dr. Trinath Dash

Hi all, thanks a lot for sharing your views, especially Mr. Bhaskar and Mr. Bhanot. I would like to know if I change the notice period only for managers and above grade, do I have to follow the same procedure as labor law, or is it not required?

Regards,
Raj

The purpose of serving the notice period by the employee is to hand over the job to the newly recruited or assigned person. It is also the time for the employer or HR to find or replace the position with the right person to take over the job. An employee who resigns from the job is always disruptive to the existing systems; this disruption can spread to all employees. They may lose interest in working and start causing trouble for others. It is always best to have them exit within 30 days.

If the notice period is extended to 60 or 90 days, it becomes difficult for the employee to stay for a longer period as they may have to take up a new assignment. Consequently, the employee might choose the alternative option to exit by paying one or two months' basic amount through DD. This, in turn, would make it challenging for the HR personnel to find a replacement on such short notice.

Moreover, there are many challenges involved in changing this in the standing orders. It is advisable to seek input from your management or superiors before acting on it.

All the best! Cheers!

Regards,
Jeyya Shanker

Managers who are outside the scope of labor laws can be negotiated with to agree to new conditions. However, for existing Managers, you may need to offer an incentive package. It is unlikely that they will agree to such a drastic change.

Regards

I totally agree with smbhappy and disagree with all other suggestions contrary to it. Regardless of the procedure, even a change to the Standing Order without appropriate consultation and agreement from employees is illegal.

It is a shame that all we managers could think of is arm-twisting the employees to retain them. How many of us are willing to release an offer letter and allow them to join us after 3 months? Is that not a reasonable ask if we expect them to serve a 3-month notice? After all, the employee needs to get a job, then resign and serve their notice before taking up a job at another company.

As was rightly pointed out, there are plenty of ways to solve this attrition problem, but coercion is NOT one of them.

You can only make the fresh condition applicable to the recruitment made after the new conditions are announced for the new employees only. To retain the old employees, introduce incentive schemes. Please refer to post #7. You have to go by law. Employees are not slaves or bonded laborers. Even bonded labor is unlawful.

Thanks and Regards,

Surendera M. Bhanot

Retention Challenges

See, when we talk about retention, how many of these employees serve even one month's notice even if incentive schemes are introduced? I know of a company where all new entrants (including existing employees) are required to enter into a service agreement committing to serve the company for 2/3 years for retention purposes. In case of breach, there is a provision to pay or realize Liquidity Damage to the company from the concerned employee. Even after serving the agreed period, the employee needs to give two months' notice. The company also provides six-monthly incentives based on performance in addition to other retention policies. However, the company faced a lot of attrition among individuals under such service agreements who left without serving a single day's notice once their salary was credited to their account. The company also formulated and announced its exit policy with penalties/legal consequences for breaches, yet those wanting to leave did so without considering these conditions, incentive schemes, retention policies, or exit policy.

What I am trying to convey is that provisions for a 30-day notice period or extensions thereof for 60/90 days may only act as psychological pressure tactics for a few individuals, and one cannot hold back those belonging to the 'race horse' category, even under intensive incentive schemes.

Thanks,