Notice Period Penalty: Is My Company's 20% Salary Deduction Fair for a Shortfall?

My company has a 2-month notice period. However, I am providing only a 20-day notice period shortfall, which is equivalent to 1 month and 10 days. As a result, the company is imposing a penalty of 20% of the annual salary plus the shortfall days. Is this justified?

Forget about what your company is saying now. What does your appointment letter say regarding this aspect? Please reproduce 'verbatim' here, and you would get more realistic answers/suggestions. Also, please confirm if there has been any earlier precedence of anyone else leaving on the same terms.

Regards,
TS

Dear tajsateesh, the rule is that any employee who is drawing an annual CTC of 4 lakh and above or has completed 5 years has to give a notice period of 2 months. If there is a shortfall, then the penalty is 20% of the annual CTC plus the salary for the number of days remaining. In my case, I am having a CTC of 4 lakh and above. At the time of joining four years back, the contract had a 1-month notice period. No previous employee had this situation.

Hello, gaurangarya, since the rule book mentions the 20% penalty, etc., I am not sure if you have a choice. I am assuming that you accepted these terms when joining this company [basically Offer Acceptance]. Usually, for many, aspects of an Appointment Letter are not given much thought until things reach a critical stage, like it did for you. Maybe if you had perused the rule book BEFORE you resigned, you might have factored this aspect into your plans.

Policy Changes and Notice Period

Regarding your statement, "At the time of joining four years back, the contract had a 1-month notice period," a company can change the policies anytime. However, they must inform the employees about the changes through any commonly used means. Even if the company didn't, it could be tough to prove.

Frankly, I guess you don't have any option other than going by the rules now. Next time, please go through any offer with a fine-tooth comb before signing on the dotted line.

All the best.

Regards,
TS