Is It Fair for My Former Employer to Demand Full Notice Pay and Withhold My PF?

I used to work in a State Govt. undertaking company as a contractual employee. It was a two-year renewable contract, though it was not on any stamp paper, only an appointment letter. I left the organization 18 days prior to the expiry of the contract as they never showed any willingness to renew the contract, and I looked for other secured options as usual and got it. I wanted to serve the company a three-month notice as it was in the appointment letter, but they did not accept my appeal and instead demanded three months' salary in lieu of notice. How can they demand three months' salary as notice pay when my service was only left for 18 more days? I have confirmed to them in writing that I can pay only 18 days' salary as I left 18 days prior to the expiry of the contract, but they are constantly putting pressure on me for the payment and also holding back my PF dues for the last 10 months. They did not even reply to my letter requesting to provide me the amount lying due in my PF account. What action can be taken against this company, please suggest.

Handling Resignation and PF Withdrawal Issues

Your appointment letter and resignation letter, if any, need to be reviewed before providing a precise response. Was your resignation letter duly delivered three months before leaving the job? I suggest that you do not pay anything to the company now. They cannot withhold your PF.

However, since your application for the withdrawal of PF in Form-13 needs to be forwarded by your employer, your company may delay the process. In such a case, you can send your PF withdrawal application directly to the local PF office with a complaint letter stating that your company is not submitting your PF application form. Send a copy of the letter to your employer also through registered post. Your employer will ultimately be forced to pay your PF amount with penal interest.

Your PF is never going to be funded by your employer. Once the PF contribution is collected and added to the employer's contribution, it should be remitted to the PFO without delay. In case of any delay, they are answerable and should also pay the interest accrued. Your fault lies in resigning 18 days before the contract period expired; your assumption that they would not extend further nullifies their inaction. You erred, breaching the contract. I think you were absent for these 18 days, am I correct? Nevertheless, no one can do anything with your PF. File your Form 13, send a copy to PFO, and follow up; you're sure to get it right.

Regards,
Kumar.S.

Notice Period for Fixed-Term Employment

A fixed-term employment needs a notice period for termination only if it is being terminated early. If you are completing your contract period, no notice period is required. You could have delayed the resignation by 18 days, actually, and no resignation would also be necessary.

Further, if you have offered to do the notice period and they have refused to accept it, then no notice period is required. It is waived by their action.

PF Account Transfer Process

I assume your new employer has PF. In that case, the PF account needs to be transferred from the old to the new company. That does not need approval or the signature of anyone. You just have to fill the form, get your new employer to sign, and submit it for transfer. Your previous employer can't do anything about it.

I totally agree with Saswata. As the contract is ending, the maximum liability you may have is only 18 days and nothing more. As for PF, it is best if you get it transferred to your new employer's account, and in that case, your past employer can do nothing.

Regards,
Preetam Deshpande

With reference to your query, the employer cannot withhold PF contributions from your salary. It should be remitted to the department. You can submit Form 13 at the EPFO office to proceed further. Our friends' suggestions are also correct in that opinion.

Thanks & Regards,

V R RAO PULIPAKA
[Phone Number Removed For Privacy Reasons]

Many thanks for your valuable suggestions. In fact, the company wanted to transfer me to another location, but due to my family conditions, I was not in a position to relocate immediately. I requested them in writing to allow me some time, but they refused. Then I had no other option but to submit my resignation. According to the clause, I wanted to serve the notice period and requested them in writing, but they never granted it; instead, they asked for three months' notice pay. In fact, I had 12 days of earned leave with the company. Out of good faith, I offered to pay for 18 service days, but they are pressurizing me illegally for three months' notice pay, despite refusing my request to serve the notice period of three months.

My resignation was submitted in the company, and it is docketed in the Mail Register of the company. In response to that, the company stated, "they are in receipt of my resignation but can accept it only if the payment is made to them."

Regards