Confused About Salary in Lieu of Notice Period? Let's Break Down the Calculation Together

Clarification on Salary in Lieu of Notice Period

I need some clarification on calculating the salary in lieu of the notice period. My appointment letter states that I need to serve a 2-month notice period; however, either party can end the employment by paying 2 months' salary in lieu of the notice period.

Salary Structure Components

My salary structure has the following headings:
- Basic
- HRA
- Conveyance Allowance
- Mobile Allowance
- Special Allowance
- Bonus

How will the salary in lieu of the notice period be calculated? Which headings of my salary will be considered while calculating this?

Notice Pay Calculation

Normally, the notice pay is calculated based on the basic salary. If it is simply referred to as "salary," it may be interpreted as gross pay. It is advisable to review the detailed conditions outlined in the appointment letter. However, it is not logical to incorporate other allowances when calculating notice pay.

Regards,
Pon

Calculation of Salary in Lieu of Notice Period

My previous company's calculation was based only on the basic salary if an employee served an incomplete notice period. Does this rule change from company to company?

Moreover, allowances that are not even given to the employee should not be entitled to be recovered.

The notice period salary from either side would depend upon the terms and conditions laid down initially in the offer of appointment. Since the offer of appointment is issued by the employer, these conditions are favorable to the employer. The employer expects that the employee should stay in the company and should not leave the company. The employer can dismiss the employee based on misconduct or inefficiency grounds and would not have to pay anything. Therefore, the offer of appointment is structured in a way that the issuing employee has to provide the full notice period salary or gross salary with all allowances. This is a standard practice. Therefore, you should fulfill the notice period on duty.

Regards,
Mahavir Mittal

Moreover, allowances which are not even given to the employee should not be entitled to be recovered. I agree, but in the CTC regime, the allowances are apportioned to meet one's tax issues.

What is Special Allowance?

It is very much a part of the basic salary but is just excluded for the sake of retiral benefits and PF onus. Similarly, there are other host of allowances. So, it is the company's policies that decide the N.P. calculation.

Regards,
Pon

Employer Not Following the Notice Period Norms

Please help me; it is very urgent. I am Ram from Madurai. My company's headquarters are in Bangalore, and my work locations are in Chennai and Madurai. It is an eLearning company, and we work in some schools. I joined this company six months ago.

The company wants to terminate my services. I accepted their decision on the same day (4-Jan-14) and handed over the office laptop and other accessories. However, they are not following the notice period norms (45 days on either side) and have only paid 15 days' salary in January, despite my requests.

Since my joining date, they have been deducting the gratuity amount as well. Is it possible for me to withdraw my gratuity and PF amount? I resigned from the company at the request of my reporting head.

Please advise me on where I can lodge a complaint against my employer.

My contact number is [Phone Number Removed For Privacy Reasons], and my email is [Email Removed For Privacy Reasons].

Regards,
Ram