Can My Company Deny Notice Period Pay Due to Market Changes? Seeking Advice on Rights

Hi friends, I have been working at a software company for the past 2 years. I have recently submitted my resignation for personal reasons. If the company decides to release me during the notice period, will they provide my notice period salary as per my offer letter terms?

Notice Period Terms

In my offer letter, it states: "The employment with the company is subject to termination on two months' prior notice by either side. The company reserves the right to, at its sole discretion, substitute the notice period by paying you a salary in lieu of the notice period."

Some of my colleagues have mentioned that the company might alter its policy due to the current market situation and terminate employees without providing the notice period salary. Is this a possibility? Please advise me on how I can protect my rights in such a situation.

Thank you.

Every company pays a salary to the employee who is on a notice period. You will receive a salary until your last working day. Why are you thinking about the issue before it comes to you? Your colleague mentioned that. Has it happened to you?

Understanding Notice Period and Policy Changes

The first thing to note is that for every single day spent on the notice period, you will be paid. A notice period of two months implies that you will be working for two months in this organization from the date of your resignation, but you will still be an employee until you complete your notice period and will receive your salary as an employee.

In simple terms, by giving your resignation, you have notified your employer that you will not be with them after two months and are ready to spend this period as per the conditions in your employment letter. However, if you wish to leave early, you will have to compensate for this loss to your employer. Similarly, if the employer wants to relieve you earlier, they will pay you accordingly. Both parties are under a mutual agreement of employment, and neither can breach this.

You will remain an employee until you finish your notice period and will continue to receive your salary as usual.

Changes in Policy

Regarding changes in policy, the employment/appointment letter is an agreement of mutual understanding between both parties (Employer & Employee), and both must adhere to it. Without obtaining prior consent from an employee, the employer cannot make any changes to it. If the employer wants to change the policy and the clause of "Notice Period," it will not be applicable to current employees who are already bound by a contract, but only for future employees.

However, if the market situation is unfavorable for any company/industry and they intend to take such actions for recovery or survival, they can relieve the employee by compensating them.

Hope you got it.

Notice Period

Assuming that you are not a 'workman' within the meaning of the Industrial Disputes Act, since that requires the issue to be viewed differently, I must say that the terms of employment have been crystallized, as Mr. Anil rightly said, by the letter of appointment which constitutes the contract between you and the employer and is binding on both of you. Therefore, if the employer seeks to modify the existing terms of employment, he has to come to you with another piece of document with modified terms to take your consent. At that time, you have to make your choices diligently. If he brings any modification to the existing contractual terms unilaterally, it may not be valid in law unless the letter of appointment also contains a clause that you will abide by any modification that the employer is likely to bring in the existing terms of employment in the future.

Regards,
B. Saikumar
HR & Labor Law Consultant
Chipinbiz Consultancy Pvt. Ltd
Mumbai
[Phone Number Removed For Privacy Reasons]

Yesterday, I discussed with my manager about this. My manager said that as I am a non-billable resource and I initiated the resignation, HR will separate me from the company in two or three days. They will not give the notice period salary. I also have doubts because my project is getting closed (in a few weeks or months), which means that I may not have work during the notice period. There is no need to substitute my position by finding other resources; they may relieve me immediately without paying the notice period salary. I want to be in the project until the end of my notice period. Please suggest how I can get my notice period salary if they relieve me before then.

Thanks,
Shree

Don't worry; it is in your HR's hands now, and they will do their job accordingly. Second, you forgot to read what I said above: you will get the salary for every single day that you spend with your employer. Regarding the Notice Period, I want you to go through the "Notice Period" clause in your appointment letter once for this.