How to Handle a Company Refusing Salary in Lieu of Notice Period? Seeking Advice!

Hello seniors, please spare some minutes to guide me; it can be critically important for my career. I have been working with an MNC for the last 7 months. Now, I have received a very good opportunity and want to switch companies. I sent the resignation by mail. However, the company's HR says that I have to stay there for a notice period of 3 months. I have tried a lot, but he is not convinced.

I am ready to pay the salary in lieu of the notice period. I have also sent an email saying this to the manager (to keep an official record). However, they are insisting that I serve the full 3 months and cannot pay for the notice period.

In my offer letter, it is stated word-for-word that "the contract can be terminated by either party by giving three months' written notice on either side or salary in lieu thereof."

My Plan:

1. I will send another email to the company (in addition to the previous 2) stating that, in line with the previous emails, I have resigned, and my last date will be specified.

2. In the same email, I will ask for the amount of salary I will have to pay in lieu of serving the notice period.

3. If the company replies (less likely), I will pay that amount by DD (to maintain proof) and send it to them. If the company doesn't reply (more likely), I will calculate the amount to be paid myself and still send them the DD, with the email stating, "please calculate the exact amount and accept the DD."

4. In the new company that I am joining, I will present the printout of all these documents as proof that I have left the previous company.

I believe I am not violating any rules here.

My Queries:

1. Should I make any changes to what I have planned?

2. Can the company harass me or take any legal action that could cause problems for me in the future?

Thank you

Your plan is sound. I would only add that you should also send a photocopy of your offer letter highlighting the relevant lines. Additionally, you should send a hard copy by registered post. While the company has no grounds for legal action, they can make life difficult for you, for example, by not issuing a relieving letter or providing a good (if any) reference. Therefore, it is imperative that you keep all printouts and/or correspondence as proof.

Incidentally, should the company attempt to take legal action, bear in mind that you should counter any action by claiming (in the courts) "frivolous action by the company." The courts do not take lightly any attempt to waste the court's valuable time and resources. I hope the above is useful.

Warm Regards,
Harsh

Thank you, Harsh Sir, it has indeed helped me. However, I would like to mention that I am not from the UK, as has been shown on my profile. I am from Pune, and I do not know why the profile settings show my location as the UK.

As you have mentioned about the relieving letter, I actually do not need to submit the relieving letter to the best of my knowledge. In fact, even if I do not receive the experience letter from the company, I am willing to let that go too. However, I am worried if they take any legal action, as you have mentioned; though the offer letter clearly states that I can pay the salary in lieu.

Thank you very much for your help and regards.

I would suggest the following minor changes if they suit you:

1. Instead of a DD, give a cheque. It is always better than a DD, which is just as good as cash.

2. Do not forget to cross the cheque as "Accounts Payee Only" and don't give a bearer cheque that anyone can encash over the counter.

3. In addition to resending the email, send your resignation via registered mail with an acknowledgment slip to have better proof in your favor if things go bad.

4. The chances of them taking any legal action seem low because of their practice of a 3-month notice and not abiding by their own terms and not being ready to discuss early relieving. However, may I ask what tenure you are suggesting to serve?

5. Include the following line in your resignation:

"As per the clause no. ____ in the issued appointment letter, which states - the contract can be terminated by either party by giving three months' written notice on either side or salary in lieu thereof - I would like to resign and be relieved by [Last working date]. I will be serving my notice period of ____ days and would pay the salary in lieu of it for the balance notice as per the option in the appointment letter issued."

In addition to this, I would like to ask:

1. Did you mention the reason for resignation in your letter? If so, what was it?

2. Did your HR or supervisor tell you the reason for why they are not accepting the notice buyout option when they have clearly mentioned it in the appointment letter?

All the best.

Thank you, Ankita ma'am, Yes, if that is the case, I will send the cheque. My initial intention in considering sending the DD was to have proof that I had issued it. I believed that if they did not process the cheque, I would not have any evidence.

Yes, I will also send the resignation via registered mail. However, I am unsure about what an acknowledgment slip is. Is it the slip I will receive when they accept the post?

In my resignation email, I initially proposed serving a 10-day notice period and paying the remainder as salary. Following numerous discussions, I have extended this to a total of 18 days, including the day of resignation. The reason I provided in the email was 'for career prospects.'

I was informed that they needed someone to replace me, which is why they wanted me to stay. However, I have little to no work and spend the entire day in the office. This issue seems to be common for everyone who leaves the Pune office.

One More Question:

As mentioned in my resignation email, I stated my last working day would be after 10 days. If I decide to extend for an additional week, when should I communicate the updated date? (I have informed them verbally, although they have not agreed.) Can I notify them just one day before I leave? If I inform them now, it may lead to daily arguments, which I am tired of.

Thank you once again for your interest and regards.

Like Harsh & Ankita Shah mentioned, it does seem to be a nicely laid-out plan. Also, you mentioned that "I actually do not need to submit the relieving letter as per the best of my knowledge" — is this your assumption, or have you checked it out with the new company? Better check it out through emails [not verbal] — such decisions shouldn't be based on assumptions.

Regarding your being 'fed-up' with the issue being discussed daily, I guess you need to be prepared for such a scenario — part of the game :-)

Regarding Your Query About 'Acknowledgement Slip'

What Ankita meant was to send it through Registered Post — Ack Due. Your letter will be attached to another card which the addressee is supposed to sign, and this comes back to your address — legally, this is the only acceptable proof of sending any document. Just ask in the Post Office — they will guide you.

All the Best.

Regards,
TS

Cheque vs. Demand Draft: Which is Better?

Hi Vidhan, I understand your concern regarding the payment method. Sending a cheque is indeed a good option if you need proof of issuance. If they do not process the cheque, you might lack evidence. However, a photocopy of the cheque can serve as proof. When you go for your Full and Final (F&F) settlement, you can get a signature as proof of receipt from them. Whether or not they deposit it is their concern. We have fulfilled our obligation by paying the dues.

Resignation Process and Acknowledgment Slip

Yes, I will send the resignation via registered mail. However, I am unsure about what an acknowledgment slip is. Is it the slip I receive when they accept the letter? I believe you would be satisfied with TS's explanation; he articulated it very well.

Notice Period and Resignation Update

In my resignation email, I initially planned to serve a 10-day notice period and pay the remainder as salary. After discussions, I have extended it to 18 days in total, including the resignation day. The reason cited in the email was 'for career prospects.' I mentioned that they needed someone to replace me, but I have little work and spend the whole day in the office, a common issue for those leaving the Pune office.

Please update this in your resignation letter. You can modify it as follows:

This is regarding the resignation I submitted on [Resigned Date]. As mentioned earlier, due to career prospects, I wish to end my employment and would appreciate an earlier release. Referring to clause ___ of the appointment letter, the termination policy states "copy paste the exact words," and I opt for the notice buyout. In my previous letter dated as above, I stated my last working date as [Date 1]. However, after our discussions, I extend it to [Date 2] with mutual consent. I trust that you will release me on [Date 2] with a relieving and experience letter. Thank you for your support.

Query on Informing Updated Last Working Day

One more question: In the resignation mail I sent, I mentioned my last date as 10 days from now. If I serve an additional week, when should I inform them of the updated date? I verbally informed them, though they have not agreed. Can I send it just 1 day before I leave? Because sending it now could lead to daily discussions, which I am tired of.

Thank you for your attention and regards. Trust I have addressed your query.

Best regards.

Good plan outlined by you. Good suggestions from Harsh, Ankita, & TS. It doesn't matter whether it is a cheque or DD; I would prefer DD. My intention for making the payment is very clear in it. The payment is made from my side, and my account is also debited. This may assist me in court.

One thing that caught my attention is that you mentioned the clause in the offer letter but did not reference anything about the appointment letter. If your appointment letter specifies that a three-month notice is required from either side and a salary on notice pay in lieu of short notice, I regret to inform you, dear, that you cannot do anything but complete the notice period. Some companies are very inflexible and require physical attendance during the notice period.

Best wishes to you.

Respected Korgaonkar sir,

I may sound completely ignorant, but I do not know the difference between an offer letter and an appointment letter. After the interviews, when I got selected, I was sent a letter in the mail and the same in hard copy, which contained CTC information and some other rules. I signed and submitted it. I was talking about that letter.

The sentence that was in the letter was as follows:

"..after completion of the probation period, the contract can be terminated by either party by giving three months' written notice on either side or salary in lieu thereof."

Understanding Offer and Appointment Letters

An offer letter is a letter of intent issued by the company, usually after you have cleared your interview. It states that they would be pleased to hire you and intend to bring you on board on a specified date. As a candidate, you have the full right to accept or decline the offer made by any client. Once you accept the offer letter, a new letter is released upon your joining, called an appointment letter. It provides details such as:

- Your name
- Your joining date
- Your designation
- Your probation tenure
- Your compensation
- Basic outline of policies regarding:
- Office hours and working days
- Termination/separation policy
- Probation period

Trust this solves your query. When the offered person signs the appointment letter (the subject line would normally be "Letter of Appointment" or similar), the employee-employer relationship is established, and the rules stated in this letter are applicable to both parties. In case of any discrepancy, issues can be escalated to the right authority.

Clarification on Combined Letters

Is it possible that both letters are combined? All the contents you mentioned above are included in the only letter I signed. It includes welcoming greetings (like an offer letter), CTC, CTC breakup, holidays policy, gratuity, PF, termination, and resignation policy, etc. It's a 2-page letter with the CTC breakup on the third page. Also, one statement reads: "On matters not mentioned herein, you will be governed by the rules and regulations as applicable and framed." This probably means that for other rules not specified in any document specific to me, I have to check them in the manual.

Moreover, if the offer letter (and not the appointment letter) states the previously mentioned lines regarding the resignation policy, is it still not sufficient for me to infer that I can pay the salary in lieu of the notice period?

Thank you in anticipation.

Understanding Offer and Appointment Letters

The two letters are usually distinct. However, it is increasingly common for many firms not to issue an official offer letter. The reason is simple; candidates tend to misuse the offer letter by using it to leverage job opportunities with higher compensation. Therefore, many companies either verbally extend the offer or, if they do provide it in writing, they include limited information to prevent misuse.

All the contents you mentioned above are included in the letter I signed. The welcoming greetings, CTC breakdown, holiday policy, gratuity and PF details, termination and resignation policies, etc., are all covered in this 2-page letter, with the CTC breakup on the third page.

Additionally, there is a statement that reads, "On matters not mentioned herein, you will be governed by the rules and regulations as applicable and framed." This likely means that for any rules not specified in this document, you would need to refer to the company manual.

From the information provided, it seems that the letter you signed is an appointment letter. Make sure you have a duplicate copy of it for your records and review the subject line.

Furthermore, if the offer letter (and not the appointment letter) includes the aforementioned lines regarding the resignation policy, can I interpret that as permission to pay salary in lieu of the notice period?

Thank you in advance.

As mentioned, an offer letter signifies the company's intent to hire you but does not confirm your employment status. It usually does not specify your exact start date, only an approximate date for your potential hiring.

If you are considering whether, with only an offer letter and not an appointment letter, you can forego serving notice and opt to provide salary instead, it is advisable to communicate openly, negotiate respectfully, and resign professionally.

Remember, the relationships you build during your career journey are valuable, and maintaining a positive rapport can be beneficial in the future. Strive to conduct yourself with grace and integrity in all your interactions.

Hope this information proves helpful.

Regards

Thank you for solving the confusion!! Yes, I have a copy of the (appointment) letter. Actually, I just meant to ask that, irrespective of it being an offer letter or an appointment letter, if the company has given a statement regarding resignation and notice period in the letter and I and the company authority have agreed and signed on it, should I not refer to it to check the rules?

Yes, I understand that I should not spoil the relations, but I have no other option than leaving the company earlier than I should have. I know it's going to create these conflicts, but I will just try to make it as less problematic as possible. That's the reason I am extending the service as much as I can.

Anyways, from the advice of you all, I guess I should do as I had planned, with the modifications that you had suggested.

The only query from all this remains to me is, should I send the mail with the revised last date (in the format which Ankita mam gave) now? Or just some 1-2 days before the revised last date (to avoid daily confrontation)? I definitely prefer the second option :-)

Regards,

Hello Vidhan,

Thank you for solving the confusion! Yes, I have a copy of the appointment letter. Actually, I just meant to ask that, irrespective of it being an offer letter or an appointment letter, if the company has given a statement regarding resignation and notice period in the letter and I and the company authority have agreed and signed on it, should I not refer to it to check the rules?

Just to update you, the either/or option should be mutually agreed upon. I don't know if just because it is stated in the appointment letter that there is an option of notice buy-out, it becomes mandatory. On the other hand, have they informed you of the reason why they are not ready to relieve you early? I think a tenure of just 7 months won't be so important that they would need a 3-month period for handover. Yes, they may argue they are not getting a replacement, but you can temporarily hand over the pending work to someone existing who can handle your work on a temporary basis.

Yes, I understand that I should not spoil the relations, but I have no other option than leaving the company earlier than I should have. I know it's going to create these conflicts, but I will just try to make it as less problematic as possible. That's the reason I am extending the service as much as I can.

Resigning usually creates such tense situations, especially in SMBs, and when the separation is unplanned or uncalled for. But it is okay; I believe every employee has a right to decide if or not they want to work with the company. I believe coming to mutual consent and negotiating the notice period will be the best option. Did you inform your new employer about this situation? By the way, had you mentioned to your new employer about the 3-month notice you have to serve?

Anyways, from the advice of you all, I guess I should do as I had planned, with the modifications that you had suggested. The only query that remains for me is, should I send the mail with the revised last date (in the format which Ankita ma'am gave) now? Or just some 1-2 days before the revised last date (to avoid daily confrontation)? I definitely prefer the second option :-)

I believe you should be a little firm on your decision. Communicate your issues with the HR of the current employment and ask your HR about the issues and mutually negotiate. Tell the HR you are unable to attend post the finalized date in the last meeting.

Regards

Firm Decision-Making and Communication with HR

I believe being a little firm in your decision is important. Communicate your issues with the HR of your current employment and discuss the problems, then mutually negotiate. Inform the HR that you are unable to attend the post after a certain date, as agreed upon in the last meeting.

Actually, I have been placed with a semi-government organization. They have not requested any documents from my previous companies, so I decided not to explicitly ask them for any. Additionally, they do not allow any flexibility in the joining date.

I have been in regular contact with the HR manager for many days, but it has been unproductive.

If I email him with the revised last date just 1-2 days before the revised deadline, could that cause any problems? In my resignation email, I mentioned a different date, and I plan to work for a few more days beyond that date. However, I have verbally communicated that I cannot stay past a certain date.

Considerations for Transitioning to a New Job

The new firm (a semi-government organization) where you are anticipating joining, I am sure you must have gone there for an interview.

My question to you is this:

1) Did you show your current exposure to them? In simpler words, had you included your employment with your current firm (from where you're resigning) in your experience section?

2) Did you talk about any notice period clause in your appointment letter?

Asking you to submit documents is a different thing, and asking you about your notice period is different.

Secondly, just because they have not asked you to submit anything does not mean that you can do away with a relieving letter. As you said, if it's a semi-government organization and we are all very much aware of the speed and work of government firms, there is a possibility that they ask you to submit your relieving letter post-joining and then say unless you submit this, we won't confirm you. What would you do in this situation?

See, I am being the devil's advocate now and trying to show you both sides. All that I want to convey is that a relieving letter is important proof of your employment and a peaceful release.

Clarifications Needed from the New Firm

Another thing, as you mentioned that the new firm is not giving you any flexibility with the joining date. Can you elaborate on:

1) How did you get to know about this opening? I mean, was it through some recruiter, advertisement, or some bulk hiring through an entrance test and all?

2) Was there any tentative date for joining ever shared?

3) Not even once did they ask about the notice period? As far as I have experienced, this is one concern for a recruiter/interviewer - how early can you join us. One of the most common questions in the interview.

When did you resign from your current employment? I mean, was it the same day that you were told you are selected or when?

Balancing Perspectives

See, the problem is many times we just have to look at our perception and fail to address others' concerns. I can very well understand your situation that when you are getting a better opportunity, why would you want to be stuck with this one. If you do, that would be an opportunity cost.

At the same time, if we look at the company's perspective, they did bear a cost to hire you and will bear a cost to seek a replacement. I am not saying that you are wrong in your approach, but just a thing that it would really be a smooth exit if both parties can acknowledge each other's perspective.

Anyway, coming back to your case, as I said, send your resignation with a revised date asap because if you delay it, they would say you are informing us today that tomorrow is your last working day.

Do not burn your bridges is all that I would want to say at the end.

In reference to the query, I need to mention here that there are quite a number of organizations that do not accept money in lieu of the notice period, even though they mention it in the appointment letter. The basic reason for doing so is that all employees are entrusted with certain responsibilities that they have to execute. When the concerned employee resigns, before leaving the organization, they have to complete the responsibilities and, at the same time, explain their profile to the new joiner. The organization takes these 3 months to find a replacement for the resigned employee if they do not have one available.

Your strategy is absolutely correct. The organization cannot initiate any legal action against you. There might be a delay in sending you the relieving letter, but beyond that, there will be absolutely no problems for you. Nowadays, organizations are not resorting to such behavior, which ultimately tarnishes their image in the job market. The organization and the employee share a symbiotic relationship; they are interdependent.

Hello Ankita mam,

1. Yes, I did mention the current employer during the interview.

2. The interviewers did not ask me about any notice period clause and, in fact, anything about my company.

During the last 2-3 days, I asked as many seniors as possible, and I got the answer from almost everyone that they will ask for the relieving letter if the employer was a government organization (They have also written this in the list of documents to be given).

However, as you said, I should be prepared for that also, but there seems no possibility as of now that the company will give me the relieving letter. So I guess all I can do is to collect all the documents regarding my resignation and willingness to pay for the notice period. I can just hope that this will not create any problems.

1. The recruiter hires through a national entrance test followed by an interview, which I came to know from newspapers.

2. They did not share any tentative joining date; however, I got the offer letter (by e-mail) 1 month before the joining date.

3. They never bothered about my notice period. They would just declare results and give us a joining date. If someone cannot join, they will extend the waiting list accordingly.

I resigned from my current employment the next day after I got the offer letter.

I understand the view of the company too, but sadly there is not much that I can do, and the company also has not been moving from their first stand.

As you suggested, I sent the resignation with a revised date on the same day of your reply. But in 3 working days, they have not replied anything about it, as I had expected.

Now I am planning to send the same resignation letter by registered AD also. I have some small doubts regarding that:

1. Till now they have not disclosed anything about the payment I have to make. So I should send the cheque/DD later through another registered post later, based on their response/non-response, right?

2. Is it mandatory that my registered post should reach the company before my last date? Is it possible that the company will say that they will consider my resignation from the date they received the registered post only? I have already sent them the emails declaring my resignation, from my official mail ID (Though they have not replied to the emails a single time, only replied verbally).

Thank you and regards,

Vidhan

Handling Resignation and Notice Period Issues

Hi Vidhan,

[QUOTE=Vidhan1988;2061195]Hello Ankita mam,

1. Yes, I did mention the current employer during the interview.

2. The interviewers did not ask me about any notice period clause, and in fact, anything about my company.

During the last 2-3 days, I asked as many seniors as possible, and I got the answer from almost everyone that they will ask for the relieving letter if the employer was a government organization (They have also written this in the list of documents to be given).

However, as you said, I should be prepared for that also, but there seems no possibility as of now that the company will give me the relieving letter. So I guess all I can do is to collect all the documents regarding my resignation and willingness to pay for the notice period. I can just hope that this will not create any problems.

1. The recruiter hires through a national entrance test followed by an interview, which I came to know from newspapers.

I believe you mean to say the company wanted to hire for a position, and they placed an advertisement in the media (newspaper or others), and you read and applied for the entrance and later cleared the interview.

In this case, surely the company is unsure of the exact dates that they'd bring someone aboard due to several reasons.

2. They did not share any tentative joining date; however, I got the offer letter (by e-mail) 1 month before the joining date.

Kind of good that they let you know 1 month prior to the joining date so that you can serve the notice period and do a smooth exit. (The usual notice period is 1 month)

3. They never bothered about my notice period. They would just declare results and give us a joining date. If someone cannot join, they will extend the waiting list accordingly.

Yes, since they are hiring in bulk and they already have more candidates than their requirement, they have no need to entertain anybody and fancy their tantrums or problems.

Steps to Manage Resignation Process

So what should we do? After analyzing the below things...

I resigned from my current employment the next day after I got the offer letter.

I understand the view of the company too, but sadly there is not much that I can do, and the company also has not been moving from their first stand.

As you suggested, I sent the resignation with a revised date on the same day of your reply. But in 3 working days, they have not replied anything about it, as I had expected.

Now I am planning to send the same resignation letter by registered AD also. I have some small doubts regarding that:

Please make the Reg AD soon. It's always better that we send it as early as possible so that we are not liable.

1. Till now they have not disclosed anything about the payment I have to make. So I should send the cheque/DD later through another registered post later, based on their response/non-response, right?

I had a little different scenario. I had to pay rent to my landlord, and he refused to take it. After several attempts, what I did was ask a lawyer, drafted a letter, drafted a cheque of the pending amount, took a xerox of the letter and cheque, registered AD it to the landlord.

I had put in the letter that I am sending along with this letter a cheque for the rent settlement.

You can as well include the following:

Kindly note that enclosed with this letter is also a cheque dated _____ of amount _______ as salary in lieu of the remaining notice period of ______ days which I would be unable to comply by. The cheque is drawn on ______ Bank and has ______ cheque no.

Always remember to make the cheque A/c payee and put the name of the company. You can find the name on the salary cheques issued by them to you.

2. Is it mandatory that my registered post should reach the company before my last date? Is it possible that the company will say that they will consider my resignation from the date they received the registered post only? I have already sent them the e-mails declaring my resignation, from my official mail ID (Though they have not replied to the mails a single time, only replied verbally).

Sooner, the better.

Don't fail to track the records like this -

1) This is to mention that I sent my resignation on DATE via email to PERSON.

2) Since I didn't have a written revert for this and only verbal communication happened asking me to extend my last working day from DATE 1 to DATE 2, I resend my resignation with a revised last working date as DATE 2 on DATE to PERSON.

3) Again when I did not receive the acknowledgment of the resignation I sent, I hereby send you my resignation via Register AD to reemphasize the fact that my last working day with the company shall be DATE 2.

A post from a senior would actually make it stronger. All the best.

Regards,
Ankita

Hello, my new employer is a semi-government organization. I think they will not go by logical understanding; they will just follow the rulebook. So, if a relieving letter is needed, they will not be convinced by any other means. On the other hand, if I don't tell them, most probably they won't ask for anything (because we are not told to bring any document of the previous employment in the rulebook). This is what I have learned from the seniors.

Regarding the DD, they will most likely not reply to anything (at least till now, they have not replied). If they do not inform me about the amount to be paid, and I do not pay it, will it not be considered as if I have violated the rule? ('Either serving the notice period OR paying the amount' was written in the appointment letter).

If I give them the DD, at least I can say that I have fulfilled my obligation as per the contract. Will it affect me adversely in any way?

Please share your valuable suggestions on this. Thank you for your time and regards.

Legal Actions and Employee Rights

No HR would ever take legal actions as these are not one-sided actions. It involves them also spending money, time, and resources. Courts are also heavy on frivolous claims by companies against employees.

You need to be sure that you are not in any data or intellectual property breach, which could lead to criminal consequences.

Regards