Confused About Notice Pay: Can My Boss Charge Me for Days He Waived Off?

I need help with a certain issue I am facing regarding my notice payout. I recently acquired a job with a company and hence decided to inform my boss of the same and ask him when the earliest possible date they could relieve me would be. As per our rules, we have a 90-day notice period. My boss informed me verbally that he would relieve me in the middle of next month, which is like serving about a 50-day notice. When I passed this information to my new company and asked for the offer letter, in the meanwhile, yesterday I officially sent a mail to my boss resigning from the job and confirming the date. However, he replied that he can only relieve me by the end of next month. Furthermore, upon requesting to be relieved by the middle of next month, I have been informed that notice pay would be deducted for the same.

Notice Pay Calculation

My question is, since my boss has agreed to waive off 30 days of my notice and I will be serving 30 days, can he ask for notice pay for the remaining 30 days or for the full 60 days? If I have to pay out, will it be calculated based on my basic pay or my gross pay?

Question 1: You need to pay for the balance period of 30 days only.

Question 2: Generally, it is calculated on Basic Salary. However, you may check with your organization. Also, check what method is used for encashment of leave. Logically, the same method shall be used for both encashment of leave and Notice Pay.

Regards,
Sivasankaran

Your boss agreed to waive off 30 days. Did you receive it in writing? Please go through the appointment letter and see what clause is mentioned about the notice period. It is generally accepted in most organizations that in lieu of a 1-month notice, 1-month salary is applicable. In case your boss states that you need to serve a 90-day notice, then you must comply. So, it's better to review your appointment letter.

Thank you.

Please learn first that in HR, what is in writing is more important than what is orally promised or assured. The notice period or pay in lieu of it can be insisted upon by the employer, and you have to pay. Normally, it is based on gross pay, but it depends on what is stated in your appointment letter.

Regards,
Kannan

Thanks for your reply. Encashment is on basic pay only, but still, can I be asked to pay on gross? Also, I am being given house rent, but the amount is included in "consolidated allowance" as we have a separate head HRA which is just a part of my salary breakup. I am also getting CCA as I have moved in from another city. So even if I am asked to pay gross, will it include both the above?

Notice Period Waiver and Pay Calculation

1. Your boss agreed to waive off 30 days; did you receive it in writing?
2. Please go through your appointment letter and see what clause is mentioned about the notice period. It is generally accepted in most organizations that in lieu of a 1-month notice, 1-month salary is given.
3. In case your boss says you need to serve a 90-day notice, then you must follow that.
4. So, it's better to review your appointment letter.

My company has recently merged with our parent company; hence, we received an acquisition letter wherein the 90-day notice was mentioned. Unfortunately, I seem to have misplaced it when I was transferred recently. Regarding the waiver, although my boss did not explicitly mention it as a waiver, it is understood from his email as he agreed to release me at the end of October. I had sent the email on September 1st, and I intend to work for the whole of September.

Regards.

My boss has agreed to release me by the end of October, but my new employer wants me to join by the 1st of October. This has raised concerns regarding the payout. I will not be able to stay back to complete the notice period as my new employer is not willing to wait that long, and I do not want to miss this opportunity.

Thank you.

If this clause is mentioned in the appointment letter that you have to serve 90 days, then you must do so unless they relieve you. It's one month's salary if it is mentioned in the appointment letter; otherwise, the default rate prescribed by management applies. It is advisable to clarify these aspects with management.

Since I don't have my letter with me, I have just inquired with a colleague of mine and asked for the exact clause. It states, "The company shall be entitled to terminate your services without assigning any reason by giving 90 days' notice or salary in lieu of notice. In the event you desire to leave the company, you will give the company 90 days' notice in writing or 90 days' salary in lieu of notice."

The point to be noted here is that in the case of the company relieving me, it says 90 days' notice or salary without mentioning the number of days. However, when it comes to the case of the employee, it clearly states 90 days in both the cases of notice or salary in lieu. So, what essentially is the difference between the two sentences?

In employment situations, there are typically two options when it comes to providing notice of termination: giving 90 days' notice or providing salary in lieu of notice.

1. If you are required to give a 90-day notice period, then your salary will also cover the same 90-day period.

2. Even if you work for only 89 days instead of the full 90 days, the company may still deduct 90 days' worth of salary from you. However, this situation should be approached with consideration for the one-day shortfall in the notice period as a matter of compassion.

3. For instance, if your monthly salary is 15,000, then the calculation for the salary deduction would be as follows: 15,000 / 30 = 500 per day. Therefore, for 90 days, the total deduction would amount to 45,000.

I hope this clarifies the process regarding notice periods and salary deductions.

My HR is asking me to pay my gross salary as a payout, including my CCA and actual house rent. However, as nothing to that effect is mentioned in my letter, should it not have been on basic pay and not on gross? Can I take up this issue with my HR?