Can My Company Really Make Me Serve the Full Three-Month Notice Period in India?

We have a three-month notice period to be served on the company when we resign. There is also an option to pay for the shortfall in notice. Can the company force the employee to work for the entire three-month notice period without accepting notice pay for the shortfall, even after the employee offers to work for a reasonable time after notice (say, offered to work for one month and pay for the balance two months)? Can somebody please tell me regarding Sec. 14 of the Specific Relief Act?

Clauses in the Appointment Letter Pertaining to Resignation

The appointment letter says, "It is also understood and agreed upon confirmation of your services: (i) The employment may be terminated by either party without assigning any reason by giving the other party three months' notice or pay in lieu thereof (ii) Notwithstanding anything to the contrary contained herein, misconduct on your part will entitle us to terminate your services without any notice or pay in lieu thereof."

At another place, it says that "You shall be bound by the Company's Service rules and regulations as applicable to senior members of staff, save the terms and conditions explicitly specified in the contract of service, including any other rules and regulations that are in force from time to time."

Service regulations say that it is the discretion of the company whether or not to accept notice pay. In essence, they can ask us to serve the complete notice period by rejecting the offer by the employee to pay for the shortfall in notice.

Request you to let us know about the notice period law in India.

You can leave the job by either giving notice or payment in lieu of notice. The relations between the employer and employee are primarily governed by the Appointment Letter. The Company's policies and procedures are the supplementary aspects. The Constitution of India provides the fundamental right to every person to choose the profession of their choice, and any agreement contrary to this is invalid. By putting the clause in service regulation that it is the company's discretion to accept the notice or not is against the provisions of the Constitution of India. Hence, the company cannot threaten you by showing this clause. The company cannot force you to serve the entire notice period.

Understanding Notice Period Rules

The rules pertaining to notice periods vary from company to company. When the employee agrees to and accepts the terms and conditions mentioned in the appointment letter, he/she will need to abide by them. Whether the company can force an employee, I guess it purely depends on the work culture and rapport between the employee and the management.

Regards

Dear Mr. Manish, I will differ on your opinion if the task of the "Resigned Employee" is not properly handed over, or if the Employer is going to incur any "financial or other loss." In these cases, if the "Resigned Employee" is not interested in indemnifying the employer, then the Employer may ask the "Resigned Employee to Serve Notice Period."

There is no question of Fundamental Rights in the above scenario. There are reasonable restrictions on it. If the Compensation is not "good" relief to the Employer, then as per the Indian Contract Act, the Employer can compel the employee to serve the total notice period.

P.S. - Please go through the provisions "Specific Performance" under the Indian Contract Act. Hope you will agree with me.

Dear Prashant, the losses that employers suffer (what you are saying) due to non-service of the notice period need to be actual losses. It cannot be an imaginary loss. It is very difficult to prove in a court of law that the actual loss happened because the employee did not serve the notice period. If a company does not want an employee to leave during the notice period, then why is the clause of a 3-month notice or payment in lieu of notice mentioned in the appointment letter? Yes, one can strongly claim the fundamental rights enshrined by the Constitution of India, and it applies in such cases. I have, in my practical experience, seen various cases where companies file cases against employees and end up losing the same on these grounds.

Dear Prashant and Manish, thank you for your replies.

The fundamental thing here is that we do not want to leave abruptly and cause inconvenience to the employer. One month is sufficient and reasonable notice for the employer to get their act together. The company can recruit a new person within one month and ask the resigned person to hand over things. If a replacement is not found, the resigned person's records/work can be handed over to their colleagues, and when a new person is recruited, the same may be shifted to them.

Appointment Letter Clauses

In the Appointment letter, it says (i) 3 months' notice or pay in lieu thereof and also says (ii) "bound by the service conditions except conditions explicitly specified in the contract of service (i.e., appointment letter)." It does not say that the company has the option to refuse notice pay. However, the service rules have such a condition. Now, because of (ii) above, can we say the company cannot refuse to accept notice pay as it explicitly specifies that it is either notice or notice pay and doesn’t give the company the discretion to accept notice pay or not?

Now, which will prevail, the contract of service or service rules?

Impact on New Employment Opportunities

Now, the new employer in most cases would like the candidate to join within 1 month. If there is more delay, they may refuse to take the candidate, and the candidate may lose the opportunity. Also, it is not so convenient to continue in the present job. The management (in this case, I do not mean the top-level management, I mean the immediate manager) may take the employee for granted as if he will become aware that the employee has nowhere to go. I am specifically talking about this because I have come across an incident where the manager flatly refused that he had received any resignation letter after the employee had served a three-month notice period (the employee had failed to take acknowledgment of his resignation letter). The manager simply said that he asked the employee to stay back, thought the employee was staying, and that the employee had not given any letter. That person lost the opportunity and afterwards got another job, paying a 3-month notice pay this time.

Risks of Vindictive Management

This notice pay thing is not critical if both parties are reasonable, but if unfortunately one has a vindictive boss, he may cause one to miss the opportunity and also relieve the employee after the notice period, leaving one without a job. He may ruin not only the career but also may cause immense financial crisis to the employee, making even their family members suffer.

Query on Notice Period Enforcement

It is in this context I am asking whether the company can force the employee to work for a complete 3 months. If the employee clearly indicates in their resignation letter or by a later communication that they would like to serve only a one-month notice and offers to pay for the shortfall, and if, on not receiving any positive response, leaves after one month, can the company withhold the relieving certificate?

The Specific Relief Act states that a Contract of Personal Service cannot be enforced in a Court of Law. This means that if an employee quits before the notice period, the employer can only recover the notice pay. No employer can force an employee to complete the notice period. It is up to the employee to fulfill the notice period in order to receive their full salary and the relieving letter.

Regards,
rajanlawfirm

https://www.citehr.com/285737-legal-...-industry.html

M/s Rajan Law Firm, thank you for your inputs. Does it mean that the employer has the discretion to decide whether or not to issue the relieving certificate if the full notice period is not served?

My friend is getting engaged, and she doesn't have time to serve the notice period. However, HR in the organization is forcing her to serve a 2-month notice period instead of receiving salary for those 2 months. They are stating that if she doesn't serve the notice period, they won't provide her with the experience letter. Now, she is in a dilemma about what to do. Can anyone help me regarding this?

No, a company cannot force an employee to serve a notice period if the terms of employment clearly mention "pay in lieu of notice." You can approach the appropriate authority to challenge the decision. Please send them a formal letter mentioning employment clauses with respect to the notice period before approaching labor officials.

Regards,
Murali

If the employer is arbitrarily sticking to his point, then under the State Shops and Establishment Act, generally, it is provided that one month's notice can be given by either side. Any contract contrary to it is illegal. Further, even under the Specific Reliefs Act, either party cannot be forced to perform the contract. So, the damages payable are one month's notice. After having tendered that amount, if the employer does not relieve, then approach the Inspector under the said State Act to obtain relieving because after that period one is deemed to have been relieved. It can also be considered from another angle that if pay in lieu of the notice period under the Act is made by an employer to discharge an employee, similarly an employee, without discrimination, can also resign on these terms.

Thanks,
Sushil

Understanding the Term "FORCE" in Employment Context

What is the meaning of "FORCE"? Is it physical? The simple conclusion is that 'In order to safeguard the interests of both the employer and the employee, the term 'Notice Period' was evolved. If an important employee leaves the company all of a sudden, the company will suffer; vice versa, if an employee is released abruptly by his employer, the employee will suffer.

If the employee has tendered his resignation from the service of the company and wants to receive full pay and benefits, he has to wait until the last date of his notice period and hand over the charge to the successor. That is fair. If he does not, then he has to refund one month's salary to the company for violating the notice period. (The notice period varies from 7 days to 3 months as stipulated in the offer of appointment).

So, friend, whatever is written in your appointment letter are rules that you should follow.

Thanks.

If it is a physical force, that would amount to wrongful confinement under IPC. The dispute here is that an employee wants to resign immediately. What are the consequences when the employer does not want to relieve the employee, despite there being no disciplinary case pending against the employee?

The earlier stated legal position comes into operation. But can it be said that the employee is bound to serve the notice period as per the appointment letter or rule of the company contrary to statutory enactments? It would be relevant to refer to extracts of Apex Court decisions below, which hold to the effect that any agreement contrary to provisions of the Shops and Establishment Act, Standing Orders, or Industrial Disputes Act is illegal, void, and of no effect. Thus, the contractual provisions that provide for a more extended notice period than prescribed under the relevant Act are of no effect.

The employer cannot change service conditions contrary to these statutory provisions, whichever is applicable, to the disadvantage of the employee. Any appointment letter contrary to the Act and rules, unless it is more beneficial to the employee, is void as per section 69 of the Bombay Shops and Establishment Act and similar provisions under other State Acts. Further, under the Payment of Wages Act, as applicable under section 38 of the Bombay Act, no deduction of any kind is permissible unless authorized under the Act. The employer cannot make any recovery under the guise of notice period recovery, which is not valid.

Any Contract Contrary to Statutory Provisions is Void

In the Management of Marina Hotel Vs. The Workmen 1962 (3) SCR 1, the award of the Industrial Tribunal holding entitlement to 15 days casual-cum-sickness leave was held to be illegal, being contrary to the provisions of Section 22 of the Delhi Shops and Establishments Act, 1954, which contained a peremptory direction of the Legislature for leave not exceeding 12 days only being allowed.

Supreme Court of India

Glaxo Laboratories vs. The Presiding Officer, Labour ... on 6 October 1983

"In this connection, we may also refer to Western India Match Company Ltd. v. Workmen in which this Court held that any condition of service, if inconsistent with certified standing orders, the same would not prevail, and the certified standing orders would have precedence over all such agreements."

Patna High Court

Lilawati Devi And Ors. vs. Central Coalfields Ltd. on 9 October 1991

"It is now well known that the provisions contained in the certified Standing Order have the force of law. The provisions of the Standing Order certified under the Industrial Employment (Standing Orders) Act, 1946, would prevail over the contract of service..."

Thanks

Sushil

Hello Friends, I am Rakesh Jadhav from Mumbai. As far as my knowledge is concerned, an employee is expected to serve a stipulated notice period or pay in lieu of it. An employee can also serve a partial notice period, pay the shortfall amount, and get themselves relieved.

Issuance of Relieving/Experience Letter

Regarding the issuance of a relieving/experience letter, an employer has to issue it to an employee in either of the above-mentioned cases. An employee is not entitled to the same if they have not fulfilled either of the above-mentioned reasons.

Attrition in BPOs

In some companies, specifically BPOs, attrition is a part of the TLs KRA. Therefore, they will always try to force you to stay back.

Regards,
Rakesh Jadhav

The Challenge of Inconsistent Policies in Foreign MNCs in India

This is a typical story of foreign MNCs in India where they are unable to maintain uniformity in their policies.

I served one of the top Fortune companies for about four years, always over-delivering on my targets, gaining respect, and maintaining relationships with all departments and customers of the firm. While assessing a better opportunity, I quit the job and was asked to serve a complete notice period of 90 days without any major handovers. What I received in the last week from my manager was a disrespectful email regarding my behavior during my notice. How disrespectful for an organization like this!

I mean, we endure the most demotivating 90 days of our lives, we miss better opportunities in the market if we get any, and we lose the money that we would have been paid for incremental growth—all for what? Respect and loyalty for our employers, while they go against the law all the way to undermine us during notice!

While the same employer, for instance, abroad like in Denmark, is offering a (reverse) notice for the employees—counterparts for six months to appear in as many interviews as possible to find suitable opportunities. If you have found one already, you can leave as early as in a week without having to pay a single Kroner. How could its mentality be totally different in India? And they call themselves equal opportunity employers!

I submitted a notice period of 30 days in a written email. However, my company is not accepting my resignation. In my appointment letter, it is stated that either party can terminate this employment by serving a notice period of 90 days on the other. However, if approved by the company, an associate may surrender leave to his/her credit or pay salary (basic) in lieu of the notice period. The company is refusing to accept 2 months' basic pay from my side. Is it necessary to serve the full notice period? What legal actions can I take?

Thanks in advance!

1: I have leave balance, but the company states that I am not allowed to take leaves during my notice period. At the same time, they mention that I will not be paid for those leaves either.

2: I wanted to buy out my notice period, and I assumed that it is the basic salary I needed to pay. However, the company is insisting that I have to pay my full salary, including taxes. I just want to know if this is correct because there is no clarity.

Please tell me if anyone served notice of three months and quit 25 days before the expiry of the notice period. Should they pay the salary for 25 days or the full 3 months' salary?

You are supposed to pay the equivalent amount of salary for the notice period not served. In your case, you can pay for just 25 days which were not served by you.

Check out my blog at www.labourlawhub.com

I have a notice period of 3 months, and my organization is asking me to serve the full 3 months. I am willing to serve only 1 month of notice and ready to pay the whole amount in lieu of notice for the remaining 2 months. I have informed my manager that I am planning to join XYZ company. However, they are now stating that they will not provide me with a relieving letter if I leave the job after 1 month. On the other hand, I received an acceptance email regarding my resignation after 8 days, specifying that I must serve the full 3 months as per company policy, with an end date of ABC. I require the relieving letter to present to the new company, but I am unable to serve the entire 3 months in my current position.

Please advise me on what steps I should take in this situation. I am experiencing mental distress over this matter.

Regards,
[Username]

It is important to read and go through the documents carefully that explain in detail about the notice period and what rules are imposed on the employees for the notice period.