Is a 3-Month Notice Period Fair? Let's Discuss Its Impact on Employees and Ethics

Is a 3-Month Notice Period Good or Bad?

To have a 3-month notice period for an employee in any company, is it good or bad? Recently, I have come across a few employers and HR professionals who are deliberately not choosing the buy-back option regarding the notice period and are asking employees to serve a mandatory 3-month notice. The same companies do not pay 3 months' salary when it comes to termination or in cases where employees are released due to no project. How ethical is this company policy?

“Personally, I do not recommend such companies or policies; people in such companies feel they are locked up by the company in terms of their career growth. Employees will stay less engaged at work. Negative vibes spread in such a work culture as employers are forcefully retaining employees who do not want to continue with the company.”

I would like to have your opinion, as this will help me in better understanding.

A three-month notice period has its advantages and disadvantages. If you have to change jobs, the new company needs its processing time. Afterwards, you also need time to wind up, particularly if it is in a different place. The existing company needs time to find a replacement.

Less Than Three-Month Notice Period

However, if you get a good offer with a short notice period, say a month, then a three-month notice period may not be to your advantage. In another scenario, if the existing management decides to terminate the services of an individual, he will find it very difficult to find another job immediately. Companies have their difficulties in finding a replacement. Hence, they opt to go for a full three-month working period.

What Big Corporates Do

They view it altogether differently. If a person has decided to go, then they feel the person may not deliver with the same efficiency as he had done in the past. So they sometimes release a person sooner than the notice period. However, this cannot be taken as a rule. Many possibilities exist, and decisions are made on a case-by-case basis.

Regards,
V. Raghunathan

Hello Getsie Jesse, this topic was discussed recently in a different context—please see this thread: https://www.citehr.com/467582-can-we...ml#post2078787

Clarification on Notice Period

@ V.Raghunathan—I think you are mixing up the '3-month Notice Period' and the 'Notice Period' aspects. What Getsie Jesse is referring to is the question of 'whether the notice period should be 3 months'—not whether the notice period should exist at all.

Regards,
TS

I find three months to be too long a notice period. Many times, companies think having a 3-month notice period actually gets their work done. For some very critical positions, it's good to have such an option, but there is no guarantee that productivity will be as much as it was before the resignation submission. Now that this employee has received an offer, he talks about it to his coworkers and also about some advantages he will have in the new company. This actually induces negative emotions within the team.

If you can't find a resource in 30 days for a replacement, it's the HR department's and the company's duty to introspect why they are unable to do a replacement with their existing recruitment team. The HR team and the company will get to the actual reason, and they will have to work on the root of the issue and get it settled. If not, your attrition at the end of the day will stay high, and your recruiters will constantly have a job to do only replacements. HR will have more and more documentation, induction, and settling of new employees to work, but the core essence of HR work will always be missed. It will be a bunch of employees from all departments who have a high level of negative charges on them, and this will be a cycle of blame game and a never-ending process. Productivity will be lost, and profit will actually start taking a nosedive.

I actually would like to understand what HR with a 90-day notice period has to say.

Thank you, V. Raghunathan, and TS is right. I am more focused on the impact of a 90-day notice, i.e., a 3-month notice period. I would like both of you to give me your input on the above and what your ethical thoughts are that HR will have to do.

Firstly, I am a bit confused about your profession—are you not into HR and/or Recruitment? Your line "...and you recruiters will constantly have a job to do only replacements and..." creates doubt.

Looking at the core issue you raised, this resembles the government mindset years back [pre-1991] when the whole government mechanism worked on the notion [ill-conceived, but thought by successive ones to be the right way then] that to increase revenue, the only way was to raise taxes and have things under their governmental control [through Licenses—then called the License Raj].

Until a couple of years back, the Notice Period across sectors was 1 month [with exceptions]—and things were still working fine, minus the additional headaches.

As far as I can see, the basic motive of this enhanced NP seems to be driven by the premise that this will discourage employees from thinking of resigning and other companies to have a rethink about hiring employees of this company [whichever it is], due to the long gestation between Offer and Joining—essentially to handle attrition.

I am not sure how successful this strategy has been for the companies having this revised policy—only some independent survey would bring out the reality/truth.

But I think the companies failed to visualize the downsides of such a step.

There's another collateral action that I noticed. To ensure the employee remains busy during the NP, some companies load him/her with additional jobs—not-so-critical ones—after completing the KT activities. Quite often, such assignments were way off the core strengths of the employee—sort of just keeping the guy busy. Sometimes I wonder what the company gains by such actions—except spending on the employee's salary and the disadvantage of getting a low-end job done by a high-end salaried person to do it [meaning spending, for example, 10K where spending 3K would have sufficed].

The focus seems to have shifted from the cost-benefit per employee [vis-à-vis the company costs] to ensure none [ideally] leave the company, irrespective of the costs involved.

From another angle, the focus shifted from retention to controlling attrition—retention obviously involves a lot of proactive work by the company while controlling involves just passing a new policy—easier and convenient for sure.

Regards,
TS

As an HR professional, I believe that an employer can impose a three-month notice period for managers and employees in grades above, while one month's notice would suffice for all other grades.

Best regards,
Jayant Nisal
Corporate Manager - HR/IR (Consultant)

Hi TS, Thank you for your time and response. Of late, I have been seeing a lot of unethical practices in the HR system, and even HR justifies them. I believe in win-win situations; only then do people truly win. I am very much part of the HR system, and I am clear about my thoughts. However, I have found that this practice of a 3-month notice period has been drastically increasing in the last 2 years. Some managers and HR personnel are taking undue advantage of this notice period. I have started seeing more employees becoming victims. As a result of seeing such companies and their practices, I marked the statement you listed in the first line of your conversation. However, for the rest of your content, we both are thinking the same, and I agree with you. Regards

Three-month notice periods are typically known to individuals before joining a company. In my opinion, if someone does not agree with this, they should negotiate to have it reduced to one month before accepting the assignment. Generally, all companies include a clause about the notice period as part of their appointment order conditions. Even if it is not explicitly stated, one can try to negotiate it to their preference. Such conditions are governed by market demand and supply, as well as how desperate the company or the individual is. If a candidate is highly skilled, management may relax the notice period because they do not want to lose talent for this reason. In my view, one cannot initially agree to a notice period and later label it as unethical.

Regards,
V. Raghunathan

Issues with Notice Period Arrangements

The general and basic problem with this type of arrangement is that it is not honored by the company's side unless it suits their needs and requirements. Many employees who give a three-month notice as per the agreement/terms of employment are relieved the next day or within a week on the pretext/excuse that since they have already submitted their resignations, the company is free to dispense with their services. They are not paid the salary for the remaining period of notice.

It is sad to see several such cases in this forum, and sadder still to find certain HRs supporting such unfair actions on the plea that once an employee puts up their resignation (even though it is a notice of resignation effective upon the expiry of the notice period), their services can be terminated.

Warm regards.

Agreed, Mr. Raj Kumar. This is what I have been observing for quite some time. When the employer understands that the employee wants to leave within 30 days and they are unable to continue their 90-day notice, a forced situation is created by the employer, making the employee pay his/her salary for the remaining notice period. At times, some employers are not even willing to reduce the 90-day notice period, not because of the need for resources but due to pure ego, which they blame on company policy.

Policy Purpose

A policy is a set of rules that aim to build the company, not break it down.

Both. Other than this Shylockian approach, another motive is to make a cash profit out of any situation.

Warm regards.

I have two views on the 3-month notice period. I don't know if other senior members of the community will agree with it or not.

- If you see, mostly 3-month notice periods are present in companies that are working in niche domains or facing difficulties in getting replacements for their profiles, or as a strategy for employee retention. I think the notice period is somewhat related to the tentative time frame for the handover of work and getting a new employee on board. Many companies don't get replacements that easily if they are working in niche domains, and other reasons are also present, such as a bad work environment and high attrition. During this period, companies also try to retain good employees by every possible means. If an employee resigned due to tension, anger, or stress at work, then 3 months is a long duration to make up their mind. But I personally feel that this method can stop an employee for a few months only. If they face the same situation again, no one can stop them. :)

- Now about the salary part and termination of employees: Termination of an employee is a different situation. Companies terminate employees because they don't want them anymore in the company. So, they will not waste their money on it. Now this situation becomes about saving money or cost-cutting for them. It's also somewhat similar for people on the bench as well.

Whether it is ethical or not sometimes depends on the situations employees are facing. I have seen employees, if they're aware their notice period is 3 months, will try to get as many job offers as they can by hook or crook. It's a long duration to try their fate, where they lie with many companies to get good job offers (not ethical). Not every employee changes their job because they do not like the company anymore. Sometimes they just want growth in their career or to learn new things! I think both the company and the employee use the 3-month notice period to make things better for them. For the company, it's time to get a new employee on board and complete the handover. If an employee feels like they're a prisoner, maybe they think their work is over in the company, but the employer has to think of their replacement and backup. I think it depends on the employer how they will treat the employee who's serving the notice period. Not all managers are angels, nor are they devils. But yes, self-interest is their highest priority.

I have given my point of view based on my small experience.

Regards,
Nancy

We welcome diverse opinions as long as they are sincere and have merit, irrespective of whether the majority agrees with them or not. I appreciate your opinion and agree with it to the extent that in certain niche industries and professions such as IT software, mining, mineral exploration, and financial institutions—investment and merchant banking—a longer notice period of 3 months is not only desirable but often a necessity. However, the spirit should be equally honored by both the concerned parties.

Notwithstanding the above, what is felt abhorrent is the fact that many companies are adopting this practice without any need but to make things difficult for employees who wish to leave the organization. Such a practice can never be a remedy for attrition nor bring about any positive effect except saving money to the extent the company wishes to exploit the hapless employee.

Warm regards.

Analyzing the Three-Month Notice Period

Many divergent views have emerged in trying to analyze whether a three-month notice period is required or not. Views have been expressed from both the employer's and employee's points of view. Ethical behavior on the part of the employer and employee could solve the problem. However, seeing the present situation, we are dreaming of an ideal case that is non-existent.

Alternatives to a Three-Month Notice Period

So, if prima facie a three-month period policy is misused, what are the alternatives? One month? It is in vogue, and many companies do follow it. For the sake of this discussion, it would be worthwhile if experts who have handled cases with a one-month notice period share their experiences.

Is No Notice Period an Alternative?

Certainly not. However, many companies immediately release a person upon resignation, irrespective of what period is agreed upon as the notice period. Members may like to share their views.

Regards,
V. Raghunathan

Thank you, Raj Kumar Sir, for your appreciation. I agree with your point that employers sometimes use unethical means when employees resign, especially critical resources, under the guise of their policies. These policies can vary from employee to employee.

Here, I want to know whether there is any forum in India that can take action against such practices. Can HR take action, at least against the reporting manager, for unethical behaviors like overloading the employee with difficult tasks, not helping, or harassing the employee? Changing company policy is not easy, but as HR professionals, we have to help employees. Professionalism is important, and no one has the right to harass anyone just because they are leaving the company.

We have the law of natural justice! Will it be helpful in such cases? I hope I am not diverting from the discussion.

Regards,
Nancy

The Impact of a Three-Month Notice Period

Three months of notice period is a career killer. No company would hire a mid-level professional if they state during a job interview that they need three months to join. A product's next version gets released in three months these days. Many people are forced to resign without having another job lined up and search for a job during that three-month notice period. However, if the company finds out about this, they ask the employee to leave immediately. This is unethical. NASCOM/Labor authority should step in and urge companies to reduce the notice period to one month.

Regards