Notice Period Confusion: What Does Labor Law Say About Probation and Confirmation?

Hi All,

Please let me know if there is any defined rule or law regarding the notice period in labor law. During the probation period and after confirmation, how many days' notice period does one have to submit?

Regards,
Poornima

Hi Poornima,

Hope you are doing great.

For employees under probation:
1. As per standing orders, there is nothing mentioned regarding the notice period for probationers.
2. But the notice period for probationers can't be extended beyond 1 year.

For confirmed employees, you can devise your policy regarding the notice period:
1. The notice period can be different for different grades of employees depending on their role and importance.
2. It can vary from 1 month to 3 months.

The best way is to get your standing orders registered as soon as you make a policy.

Regards,
Vikas

To get your policy registered, you need to register it with the Labour Commissioner. According to the law, you must provide a 7 days' notice in case you are a confirmed employee when you leave.

Notice Period Under Model Standing Orders (Bombay)

Under Model Standing Orders (Bombay), the notice period for permanent employees is one month. In case of default, the employee can be sued for damages, and the amount cannot be recovered from their salary.

In the absence of certified standing orders, the notice period is deemed to be one month for permanent employees, even if the appointment letter specifies a longer notice period. Several court judgments have established that when there is a contradiction between the appointment letter and the standing orders, the standing orders take precedence.

Notice Period in Establishments

Notice period is purely an internal matter of an establishment. Certainly, in respect of establishments having certified standing orders, the notice period will be mentioned in the standing orders themselves. On the other hand, if the establishment is not covered by the Industrial Employment (Standing Orders) Act, the notice period should be mentioned in the appointment order. Model Standing Orders have no significance as they are only drafts with validity for six months from the date on which the company falls under the fold of the Industrial Employment (Standing Orders) Act.

Notice Period and the Industrial Disputes Act

The Industrial Disputes Act has not specified the notice period as a responsibility of employees/workmen. Therefore, unless otherwise provided in the certified Standing Orders, an employee coming under the definition of a workman cannot be called upon to serve notice or pay in lieu of notice. At the same time, in order to retrench or terminate a workman, the employer should serve one month's notice or pay one month's salary in lieu of notice. The notice or pay shall invariably be three months in the cases of establishments employing 100 or more workers.

Employees Not Defined as Workmen

In respect of employees not coming under the definition of a workman, naturally, nothing in these Acts will apply, and in such cases, the matter will be decided according to the contract of employment only.

Regards,
Madhu.T.K

Hello Experts,

I joined a Pvt Ltd company on Oct 27th, 2015, as a SAP Technical Consultant. As usual, the probationary period is 6 months, within which the notice period is 1 month, and on confirmation, it is 3 months for both parties. My offer letter clearly states, "If the performance is not up to the mark, the probationary period may be extended after the initial 6 months probationary period."

Now that April 27th, 2015, has been surpassed, my 6-month probationary period is completed, and to date, NO CONFIRMATION LETTER has been provided to me. Due to the non-professional work process, I am changing this job. Since I have still not received any confirmation letter nor the extension of the probation period letter, am I technically eligible to be relieved after 1 month? My query to all experts is when I put down my resignation, can I ask for relieving of 1 month?

Kindly help me with this regard. Your replies are highly appreciated!!

Regards,
Sharad BS
[Phone Number Removed For Privacy Reasons]

Understanding Notice Pay and Salary Structure

It should be the total salary agreed upon between the employee and the employer. Normally, the statutory salary is the salary involved in such scenarios, and the statutory salary means basic salary and dearness allowance, which adjusts itself to the cost of living index or compensates for changes in the cost of living. However, many new companies do not pay DA but instead have only basic salary and many other allowances, which are otherwise called allowances that do not form part of statutory salary. Therefore, the basic pay will be very low, and the other parts of the salary would be high. This is a technique used to reduce the employer's contribution towards various statutory funds and payments like bonus, leave encashment, or even notice pay payable in the event of retrenchment.

In view of the above, I would say that it should be the gross salary, the salary payable as agreed notwithstanding anything contained in the salary structure of the company, that should be paid to employees in case the employee is sent out. Obviously, the same will be the notice pay salary payable to the employer when the employee leaves.

In no case should there be a different calculation with regard to notice pay, and the one accepted should be applicable to both the employee and the employer.

Regards, Madhu.T.K

Dear Sir,

Please guide me to get my Full and Final settlement (FNF).

I was working with a private limited company. I resigned from my job and served a 30-day notice period as per HR rules. I had worked for a total of 37 days (before and after the notice period). However, I received a short amount as FNF, which is for 26 days according to HR information, as my supervisor marked me absent for 11 days. I also shared a signed muster copy with HR.

I am still awaiting a reply.

Thank you.

Dear Sir,

I worked with a private company for 8.9 years. After 7 years, the company imposed a new agreement for a 3-month notice period without any prior circular or memo to employees. As a result, we did not accept some terms of the new agreement. However, now the company is planning to deduct the three-month notice amount from our Full and Final settlement.

Please suggest what actions we can take in this situation.

Thank you.

Sir, can we keep the equal notice period of three months for all employees, including managers and workers, in the standing order? Kindly revert to me in accordance with the rules and regulations. Our company will soon be subject to the provisions of the standing order, and our management is urging me to implement a three-month notice period for all categories of employees. I would greatly appreciate your valuable advice.

Notice Periods for Different Employee Categories

There can be different notice periods for different categories of employees. Moreover, managers are not covered under the Standing Orders, and as such, there can be different service conditions for them. Certifying standing orders for workers is not a simple task. The draft should be presented before the workers and their union, and it shall become final only when they agree on each and every order. Moreover, the certifying authority, i.e., the Labour Commissioner/Dy. Labour Commissioner, whoever it may be, should also be convinced about the legality of the orders, and it will be certified only after ensuring that there is nothing illegal.

When it comes to workmen's notice period, I feel that the same may not be accepted by the union and the Certifying Officer. One month is very common.

Regards,
Madhu.T.K

Notice Period and Employment Terms

@Dinesh025 - The company cannot introduce new terms and conditions, including a 3-month notice period, during the course of employment without providing notice of change and obtaining the consent of the employees. You are not legally bound to follow any new terms that have been incorporated without your consent. The company is not entitled to deduct 3 months' notice pay since the new terms were not accepted by you. Even if they do, you will be entitled to recover the amount under the law of the land.

@Gaurav.Mehta9211@Gmail.Com - The standing order is applicable only to those who are workmen under section 2(s) of the ID Act. If you have 100+ employees, you can get your standing order drafted and certified by the Labour Commissioner. Drafting a standing order is not an easy task, and you can consult a labor lawyer for that. Please check www.labourlawhub.com for more information.

Notice Period for Different Employee Categories

Thank you for your valuable advice. I discussed this matter clearly with my Head of Department, explaining that we can't have the same notice period for all categories. However, my head is not accepting my view. He is drafting an appointment letter for a new employee and is keeping the same notice period for all categories (worker and manager levels).

Can we mention an equal notice period in the appointment letter without giving any notice as per Section 9A of The Industrial Disputes Act, 1947, and is this acceptable by law? Can any employee go to court over this matter? Kindly clarify my point.

Regards,
Gaurav Mehta

I am sorry, but what is the relation of the notice period with Section 9A? Section 9A pertains to the notice of change where the employer is required to give notice of any change in service conditions to the worker at least 21 days prior to such change.

If you are appointing a new employee and issuing them an appointment letter now, you can set the notice period in accordance with your norms. As no changes are occurring in relation to service conditions, Section 9A will not be applicable in this case.

Please check out my blog at www.labourlawhub.com

As already mentioned, there can be different notice periods for different categories of employees. The key point is that when you change the notice period, notice as per Section 9A should be given. For new employees, you can set a three-month notice period. However, in respect of workers covered by Standing Orders, when issuing an appointment order, you must also consider the terms in the standing orders. This is because you are not expected to have a condition of employment different from that stated in the Standing Orders.

Regards, Madhu.T.K

I have resigned from my firm, and as per the HR policy, I have to serve a 2-month notice period, or there's a provision for buying back the notice period. I am unable to serve the entire 2-month notice period; hence, I informed HR that I shall serve a notice period of 3 weeks, and the balance shall be paid under the payback policy. However, HR is now denying me the use of the payback policy, stating that it's at the company's discretion. Can a company deny this when it's stated in the joining agreement? Does it have any legal ground? Please help. Thank you.

A man working in a private sector enterprise company for a long 7 years. However, one day, for any reason, his boss is fired, and the job is gone without any notice period. The question is, can the employee claim any funds for the 7 years of working, or is there no law for this matter?

I have worked for the company for 1.8 years and resigned with immediate effect. As my employment offer states a two months' notice period or 2-month salary in lieu if given by you if you wish to leave the services of the company.

My questions are:

1. If I am ready to pay 2 months' salary, can the company compel me to serve the notice period?
2. Can the company sue me for damages after the notice pay?
3. Other than this, what could be the legal consequences?

Notice Period and Employment Terms

If your terms of employment stipulate that your notice period is 2 months or 2 months' salary in lieu of notice, then it is up to you to decide whether you should serve 2 months or get relieved immediately after paying 2 months' pay. If you choose the second option, the company cannot ask you to work for 2 months. Once you have paid 2 months' pay, you are discharged, and the company has no grounds to sue you. There are no legal complications.

Company's Perspective on Notice Period

On the other hand, imagine that the company does not want your service. The company will give you a notice that your service will end after two months. If the company wants you to be relieved immediately, it will pay you 2 months' pay and ask you not to come in from tomorrow.

In the former case, the company will utilize your labor/service for two months and, in return, pay you a salary. During this period, you can find alternative employment. In the latter case, the company will not require your service for two months but will pay you 2 months' pay and ask you to leave immediately. This 2 months' salary compensates for the loss of income until you find employment.

Employee's Options During Notice Period

Similarly, you can either inform the company that you will stay for only 2 more months, during which you will contribute your service and receive remuneration, i.e., a salary. During this period, the company can search for a replacement. Alternatively, you can state that your service will not be available from tomorrow and request two months' pay, which the company can use to provide additional remuneration to existing staff or hire a temporary employee in your place. Therefore, there is no illegality in receiving payment and being relieved without notice.

Notice Pay and Labor Welfare Fund

Should the deducted amount of notice pay be paid to the labor welfare fund? Where is it written? It is true that fines collected should be provided for labor welfare activities or else paid to the welfare fund. However, notice pay deduction is different from fines imposed. If the notice pay is to be spent on welfare activities only, then what is the need to deduct it? If you terminate someone and pay notice pay, is it from the welfare fund that you pay the notice pay to them? No, you take it from your own working capital, and that is a cost to the organization.

In a similar way, when you receive the notice pay, treat it as income to set off the cost of finding an alternative or revenue with which we will run the show for the time being or until a new person becomes capable of handling the position independently.