Can Employers Skip Notice Period for Misconduct? Exploring Legal Implications and Options

Dear Members,

Greetings to all! My employer terminated three employees last month due to negligence in their duties. We have to give them one month's salary since there was a one-month notice period for both the employee and employer.

Offer Letter Format Change

Is it possible to change the offer letter format where only the employee is bound to serve the notice, and the employer can relieve any employee if they are found guilty of misconduct, indiscipline, or negligence on their part?

Legal Implications and Implementation

Is it possible to implement this, and what are the legal implications if it is done? Please guide me on how to proceed.

Regards,

Consider the Employee's Perspective

Your query is surprising. Forget the legal implications for a moment. To answer it, just put yourself in the employee's position. Would you like it, or rather, would it be acceptable to you if you were dismissed without any notice salary?

Regards,
TS

Final Conclusion: Please explain the applicable law in this case.

Please provide more details for a comprehensive analysis. Thank you.

Regards,

Dear Pankaj,

If an employee is terminated due to misconduct or inefficiency, the employee will be entitled to all the benefits that you are paying for the employee you are retrenching from your organization. The employee must be paid Notice Pay as per his offer of employment/Appointment Order Letter, Leave Salary/Leave encashment available in his credit, Retrenchment Compensation, and Gratuity as per his eligibility. Additionally, he should be given a PF Claim Form (Form 10C and Form 19) which should also be processed in due course.

In the case of resignation, only the employee needs to be paid Notice Pay and Retrenchment Compensation. However, the resigned employee should be paid Leave pay and Gratuity that he is eligible to receive.

As an HR person, you should not be biased towards any side (Management or employee). Without any personal sentiment, please act correctly and do justice to your job.

I hope your doubt is cleared. In case of any further doubts, do not hesitate to ask.

All the best.

Dear Pankaj,

Strange but good to know your view. You might be thinking of saving the company costs, but at the same time, you should also realize that it's not about three employees; you are managing hundreds of people... "human resources."

Understanding the Law

Laws are made to maintain consistency and to avoid any unexpected legal complications from both sides, not to rule them out for temporary profits. Every employee and every organization knows about this law and agrees at the first instance of association.

Compensation and Adjustments

Per this law, both parties agree to compensate/adjust one month's salary (or subject to the company policy) to cover the losses that may incur to both parties due to such decisions.

Professionalism in HR

Your statement "Is it possible to change the offer letter..." really doesn't sound professional, and no HR professional could ever think of such a point to my knowledge. By this statement, I understood that you are either new to HR or in an environment of small scale. However, I would recommend you keep the laws in mind before taking such decisions.

Good luck!

Dear Mr. Pankaj Pandey, An employee employed for 12 months in the calendar year is eligible for one notice period or one month's salary as per the Industrial Establishment Standing Order Central Rule 1946 under Section 13 - Termination of Employment. Please review this information. Thank you.

So funny, the employer wants to get rid of an employee without paying money. But in another case, we ensure the employee pays the money to the company. Our HR person is asking how I can make the offer letter so that only the employee is bound. Let us think about what our profession is. Be straight and put across your opinion to the management. Settle the dues to the employees. If you are doing it the other way, a wrong message will be sent to other employees.

Employee Termination and Notice Period Queries

Hello, I am new to this forum but have some relevant questions regarding the topic in question. If an employee is fired at the beginning of a new month with an offer letter stating that each party should give two weeks' notice for either termination or resignation, how do you pay such an employee? Can the days worked be prorated in addition to the two weeks in lieu of notice, or just the normal monthly salary?

This scenario just happened in my office recently, and I am the Head of HR. I would appreciate it if you could shed more light on this so that in case of next time, I know better how to set the standard.

Thank you.

Regards,
Tosin Atanda

Hello, I am new to this forum but have some relevant questions regarding the topic at hand. If an employee is fired at the beginning of a new month with an offer letter stating that each party should give two weeks' notice for termination or resignation, how should such an employee be paid? Should the days worked be prorated in addition to the two weeks' notice, or should they receive just the normal monthly salary?

This scenario recently occurred in my office, and I am the Head of HR. I would appreciate it if you could shed more light on this matter so that I can set better standards in the future.

Thank you.

Regards, Tosin Atanda

Probation Period and Notice Obligation

The days worked plus two weeks in lieu of notice. It is very strange that the first 3 to 6 months are on probation, so how do you give an offer letter with a two-week notice for either termination or resignation? During probation, it is not good to have this type of obligation. Every professional has their own experience and perception towards work. This is why probation is there - to understand the company and the employee.

Hi Bhaskar, I really appreciate your enlightening reply, but I didn't understand the following part of your comment:

"In case of Resignation only the employee needs to be paid Notice Pay and Retrenchment Compensation. However, the resigned employee should also be paid Leave pay and Gratuity, whatever he is eligible to receive."

Could you please explain what this means? Additionally, it would be helpful if you could highlight the difference between notice pay and retrenchment pay.

Regards, Anshu

Dear Anshu, I appreciate your observation and thank you for bringing this to my attention. It was due to a typing error. I omitted "not" in the first sentence.

"In case of Resignation, only the employee need not to be paid with Notice Pay and Retrenchment Compensation. However, the resigned employee should be paid Leave Pay and Gratuity, whatever he is eligible to receive."

This means the employer need not pay the Notice Pay and Retrenchment Compensation to the employee who submits his resignation, whereas the employer has to pay the Leave Pay and Gratuity to the employee as per his eligibility.

However, for termination, all the above must be given to the employee.

Notice Pay will be available in the Offer of Employment, and accordingly, either party has to pay. The Retrenchment Compensation is to be paid with 15 days' salary for every completed year of service to the employee at the time of retrenchment.

Please refer to ID Act Section 25F reproduced below for your ready reference.

Conditions Precedent to Retrenchment of Workmen

25F. No workman employed in any industry who has been in continuous service for not less than one year under an employer shall be retrenched by that employer until—

(a) the workman has been given one month's notice in writing indicating the reasons for retrenchment, and the period of notice has expired, or the workman has been paid, in lieu of such notice, wages for the period of the notice;

45 <link updated to site home> (Search On Cite | Search On Google) [***]

(b) the workman has been paid, at the time of retrenchment, compensation which shall be equivalent to fifteen days' average pay 46 <link updated to site home> [for every completed year of continuous service] or any part thereof in excess of six months;

and

(c) notice in the prescribed manner is served on the appropriate Government 47 <link updated to site home> (Search On Cite | Search On Google) [or such authority as may be specified by the appropriate Government by notification in the Official Gazette].

Regards

The Importance and Purpose of a One-Month Notice Period

The importance and purpose of a one-month notice period from both parties' points of view are crucial. When an employee submits a resignation, a one-month notice is required. This timeframe allows the employer to take necessary steps to fill the gaps efficiently.

On the other hand, if an employer terminates an employee, a one-month salary or notice is given. This support helps the employee transition until they secure another source of livelihood. The notice period clause is applicable to both parties.

Regards,
JMK

Thank you all for the contribution. Dear S. Bhaskar, I want to understand clearly what you wrote above. Do you mean that if an employee has exceeded more than a year in an organization and he is eventually sacked, his entitlement should include Gratuity, Leave pay for the year, two weeks in lieu of notice, and salary prorated?

I really appreciate your comment. Do you mean one month's salary plus one month's notice, or either of them? However, the employee in question received more than his salary for a month after calculating the days worked plus two weeks in lieu of notice.

Thanks,
Tosin.

Hi, as an HR person, please don't immediately try to punish an employee. In case of any misconduct that causes damage to the company's property, you may take action against the employee. You must have a valid and approved standing order mentioning that such misconducts are punishable.

But keep in mind and be reasonable in your actions. Punishment is not the only solution for all. Help them realize the mistake committed and try to facilitate improvement.

Regards,
R. Devarajan

A company (Ltd or Pvt. Ltd) registered under the Factory Act or any other act is bound to pay the notice pay; otherwise, legal action can be taken by an employee. Notice pay is the social security for an employee, and remember, most of the laws are in favor of laborers or employees.

The HR representative's duty is to achieve a win-win situation for both parties.

If an employee is found negligent in their duties:

1. Was any show cause notice served to them?
2. Was any inquiry conducted? If during the inquiry they are found guilty and the employer wants to terminate their service, then the employee has to be given one month's notice or salary in lieu thereof.

We do not work for the employer; we work for the organization and strive to do justice to our job by being neutral before making any decision that is not biased. The organization supports the employees and their families; therefore, we need to work in that direction.

An employee does not have direct access to the employer. Employers are businessmen who are primarily interested in profit. We are appointed to take care of human resources to help the business grow and avoid getting involved in legal issues.

Regards,
Sanjeev