Notice Period Dilemma: How Do You Calculate Pay for Partial Notice Fulfillment?

Hi all, I need your assistance with the following calculation. An employee worked only for 15 days during his notice period. Now, do we pay him 15 days of full salary and deduct the rest of the notice shortfall from either the basic or gross amount? Please assist.

What is the length of the notice period? Is it 1 month or even longer? In the normal course, any shortfall in the notice period will be adjusted from the Earned Leave balance in the employee's credit. In the case of your employee, let us assume the notice period is 1 month. Then, as the employee had worked for only 15 days, the remaining 15 days shortfall may be adjusted by deducting from the Earned Leave in his credit. I hope this is clear.

Regards,
Madhusudan

In addition to what Mr. Madhusudan has replied, what is your notice period clause? If it is one month's salary in lieu of the notice period, then it should be gross salary and not basic. Assuming if the employee would have worked for one month, would you pay only the basic pay or the gross pay?

Shraddhavaan labhate gnanam!

Can you please share any legal inference for adjusting pending leave against a shortfall in notice? My employment contract is silent about any such adjustment, and my company does not adjust for unutilised earned leaves and demands full gross payment.

Thanks in advance

In such a scenario, also ask them to deduct the notice period from your Full and Final Settlement. You will be getting encashment for any unutilized leave.

Shortfall of notice period can be calculated only from basic as per compliance. The formula to calculate it is (Basic * Number of shortfall days) / 26. In case you are waiving off the notice period based on the encashable leaves, the remaining shortfall days can be considered for calculation, if any.

Notice Period and Payment Query

Can anyone help me? I am serving a notice period of 90 days in my current company. I want to serve the notice period only for 30 days and pay out for the remaining 60 days. How much do I need to pay out to the company?

As per the offer letter, I need to pay only the basic salary, but I am not sure. My basic salary per month is 20K, and EL is 5. Please do the needful.

Below is the clause from my Offer Letter and a ticket:

"If early release is accepted by Business, the number of notice period shortfall days will be recovered from your Full and Final settlement considering the Basic pay."

1. Either party can terminate this employment by serving a notice of 90 days on the other. The Company may, at its absolute discretion, make a payment representing salary (basic) in lieu of notice of termination. However, for causes like misconduct, gross negligence, willful insubordination or disobedience, misbehavior, or non-performance, Tech Mahindra Limited may terminate your services with immediate notice. The Company shall have the right to place you under suspension on subsistence allowance and benefits as applicable pending any investigation into potential dishonesty, gross misconduct, misappropriation, gross negligence, fraud, or other circumstances, which expressly provides for termination of your employment, which if proved, would entitle The Company to dismiss your services summarily.

2. In the event of you serving on The Company a notice of termination of employment by submitting a resignation letter, your release will be governed by the relevant policies in force at that point in time, subject to satisfactory handover of your duties, responsibilities, Company documents, Company assets, etc., to the relevant parties.

3. In the case of Associates who are governed by any other service agreement(s) for serving a minimum stipulated period, the associate will need to mandatorily fulfill the requirements of Clause 3(a) along with applicable exit policy clauses under the stipulated service period agreed to and provided therein.

Regards,
[Username]

I resigned from a reputed organization stating, "Due to some medical complications with my family, I am not able to concentrate on work, so I decided to take a break in my career. I couldn't continue my work with immediate effect."

I had a discussion with HR and the manager on the same day. As I have genuine reasons, they agreed to the buyout option (I submitted all company properties to HR at the same time).

Buyout Calculation

I am not sure how the buyout is calculated - do I need to pay the gross salary of 3 months or only the basic salary? Please help me here.

Thanks.

Dear All,

We have a policy that requires completion of 3 months. If an employee provides a 45-day notice period, how should the calculation be done?

Regards,
Ankita

Hi,

As the employee completes a 45-day notice period, the remaining 45 days of notice are to be deducted from the full and final settlement to be paid to the employee. This deduction is applicable only if this clause is explicitly mentioned in the appointment or employment order.

Sir,

If we terminate our contract labor when our job is completed, how many days' notice period shall be paid to that employee, and how should we calculate the same? If we have given notice before work completion, is notice pay applicable or not?

Regards,

Santosh Ku Panda
HR Executive