Feeling Stuck: How Can I Navigate a 3-Month Notice Period and Gross Salary Buyout?

I've been working at my current company (Pune) for the past 2 years. I'm currently underpaid since I handle most of the development process, and a fresher today earns more than me. My company always praises me in meetings, but during the annual review meeting, I'm told that I need to improve a lot, and I receive only a 7-8% annual hike.

Being a girl, I've never thought about staying late nights and have always completed my work in the office, occasionally sitting late hours. No transport is provided after such late hours, and I walk to my house (around a km from my office).

Notice Period and Buyout Concerns

My concern currently is that now, when I've found a great job, they are asking me to serve a notice period of 3 months (as listed in my joining letter). On asking for the buyout option, they are asking me to buy out with "Gross Salary." I recently also found out that whenever I've stayed late in the office, I've not been given complimentary offs for them.

Leave Balance and Compensation

I have a leave balance of 15 days. Should I be compensated for these? My friends tell me that a buyout should only amount to the Basic Salary. I am not very confident about going the legal route but will consider it if necessary. I've worked tirelessly for the company for the past 2 years, and now they are doing this to me. I'd like to know if there is anything I can do?

Relieving Letter and Legal Concerns

I want to get my relieving letter along with the PF transfer form and hope that any legal action does not result in complex problems. Please assist with some solutions.

If your joining, i.e., appointment letter says 3 months, then it should be adhered to. Please check the notice period clause in your appointment letter. That will provide information about the notice period calculation for buyout. If not clearly stated, you could ask them to show you a policy that mentions this information. If that is not possible, you can try checking with some ex-employees.

Let me know how it goes.

Regards,

Yes, a buyout will be at the gross salary as stated in your payslip. Note, it is gross wages and not the CTC amount. No one does a buyout at basic.

The rest of your post about how hard you worked, etc., is immaterial at this point. It's history. It's good to know you worked hard, and you should continue to do that in your new job. I am sure the benefits/rewards will come your way.

Your pending leave can be set off against your notice pay. Alternatively, the company is required to pay you the amount of pending leave days at full salary. This is provided in the Bombay Shop and Establishment Act.

It makes sense to get a clean relieving letter. It helps in future jobs to be able to show it. Furthermore, the new company may ask previous employers for a background check, and it's good that they don't say bad things about you.

About PF, don't worry. There is nothing the company can do to hold it back. You just fill the transfer form and give it to your new company's HR, and it will be filed for transfer.

"I've been working at my current company (Pune) for the past 2 years. I'm currently underpaid since I handle most of the development process, and a fresher today earns more than me.

My company always praises me in meetings. Still, during the annual review meeting, I'm told that I need to improve a lot, and I receive only a 7-8% annual hike.

Being a girl, I've never thought about staying late nights and have always completed my work in the office, occasionally sitting late hours. No transport is provided after such late hours, and I walk to my house (around a km from my office.)

My concern currently is that now, when I've found a great job, they are asking me to serve a notice period of 3 months (as listed in my joining letter.) On asking for the buyout option, they are asking me to buy out with "Gross Salary." I recently also found out that whenever I've stayed late in the office, I've not been given complimentary offs for them.

I have a leave balance of 15 days. Should I be compensated for these?

My friends tell that a buyout should only amount to the Basic Salary. I am not very confident about going the legal route but will consider it if necessary. I've worked tirelessly for the company for the past 2 years, and now they are doing this to me. I'd like to know is there anything I can do?

I want to get my relieving letter along with the PF transfer form and hope that any legal action does not result in complex problems.

Please assist with some solutions."

You said, "Your pending leave you can set off against your notice pay. Alternatively, the company is required to pay you the amount of pending leave days at full salary. This is provided in the Bombay Shops and Establishments Act."

Reference: https://www.citehr.com/508843-im-bei...#ixzz3GIOtZohq

Request you to kindly provide the link to the relevant section of the Bombay Shops & Establishments Act.

Regards,

Employee Entitlements Upon Leaving Employment

Section 35(2) of the act states:

(2) If an employee entitled to leave under subsection (1) [or (1-A)] is discharged by their employer before they have been allowed the leave, or if, having applied for and been refused the leave, they quit their employment before being allowed the leave, the employer shall pay them the amount payable under section 36 in respect of the leave. Therefore, upon leaving employment, the employee is entitled to wages for the days of pending leave. One option is for the employer to pay the amount, the other being to set it off against optics pay recoverable.

Rate of Wages Under Section 36

Section 36 specifies the rate of wages: Every employee shall be paid for the period of their leave at a rate equivalent to the daily average of their wages for the days on which they actually worked during the preceding three months, exclusive of any earnings in respect of overtime. Thus, it has to be gross wages.

Bombay Shop and Establishment Act: Notice Period and Wages

Incidentally, the Bombay Shop and Establishment Act (which applies to Pune) also has the answer to your query. Section 66 states that the minimum notice period is 30 days' wages (though a higher period can be mutually agreed upon, it should not be excessive to make it difficult to find a new job). Section 2(30) defines wages as provided in the Payment of Wages Act. Thus, wages encompass all payments that an employee receives in a month, which includes gross wages.

Current Employment Situation and Concerns

I've been working at my current company in Pune for the past 2 years. I feel that I am currently underpaid, considering that I handle most of the development process, and a new employee today earns more than I do. Although my company praises me in meetings, during the annual review, I am told that I need to improve significantly, and I only receive a 7-8% annual salary increase.

As a female employee, I have never considered staying late at work and have always completed my tasks within office hours, occasionally working late. After working late hours, no transportation is provided, and I have to walk around a kilometer to reach my home.

Notice Period and Buyout Option

My current concern is that now, when I have found a great job opportunity, my company is requiring me to serve a 3-month notice period (as specified in my employment contract). When I inquired about a buyout option, they insisted on a buyout with the "Gross Salary." Additionally, I recently discovered that I was not given compensatory time off for the late hours worked in the office.

Leave Balance and Compensation

I currently have a leave balance of 15 days. Should I be compensated for these days? My friends suggest that a buyout should only be based on the Basic Salary. While I am hesitant to pursue legal action, I am willing to consider it if necessary. I have dedicatedly worked for the company for the past 2 years, and I am disheartened by their current actions. Is there anything I can do in this situation?

Seeking Advice and Solutions

I aim to obtain my relieving letter along with the PF transfer form and hope that any legal steps taken will not result in further complications. I would appreciate your assistance in providing some solutions.

Regards

You are governed by your employment contract only. Does your employment contract, i.e., appointment letter, mention that you have to pay a basic or gross salary? If it does, then follow the same; if it doesn't, then pay whichever is lower.

If you are mentioned as falling under the labor/worker category by your company and not under the executive and management category, then other labor laws will become applicable to you.

As far as leaves are concerned, internal policy and procedures would be applicable. What you can do is square off one against the other and thus save time and money.

Regards,
Octavious

Notice Pay and Employment Contracts

If the Shop and Establishment Act states that notice pay is at gross (see my previous post), how can what is stated in the appointment letter override it? So, on what basis will you use "lower of the two"?

Employment Agreement and Notice Period Concerns

A company cannot force its employees to stay for three months via an employment agreement. On resignation, a company cannot demand the gross salary but only the basic pay. Non-provision of transport facilities to women employees working beyond work hours is an offense by the company. Therefore, send a letter to the company stating that you feel insecure due to the absence of such facilities.

Also, no pay for overtime, which leads you to resign, upon which the company demands the gross salary instead of basic pay, is an offense that can be prosecuted. Therefore, request to be relieved immediately or as soon as possible within two weeks by deducting three months' basic pay from your Full and Final (F&F) settlement.

I am not sure whether getting into legalities, what this or that Act says or doesn't say, would be useful to you at this point in time, since you, understandably, would like to avoid confrontation to the extent possible. Hence, without going into the legalities—where other members are better equipped to give suggestions—let me suggest the course of action in the Worst-case Scenario, meaning you will have to adhere to whatever the Company wants you to do to get relieved. In this context, please note that I am NOT, repeat NOT, justifying whatever the Company's stand is in your case.

Prima facie, based on what you mentioned, I think they know they gave you a raw deal so far but yet don't want to lose you (I have seen such situations where a hard-working employee is taken advantage of to the maximum extent possible).

I would suggest this: talk to the new Company where you got the offer and explain to them the situation. Request them to bear the costs of the Notice Period Buy-out.

If you did well in the interviews and they wouldn't like to lose you and they have such a policy of NP Buyout, it's quite likely they would agree, albeit with some conditions. The usual condition in such situations would be to ask you to work for a minimum period of time. Though not unusual, given a choice, I would suggest you ask the Company to bear the Buyout costs and deduct from your salary over a specified period of time, say 6 months. That would enhance the chances of them agreeing to your request, if they don't have any NP Buyout Policy and also preempt any chance of you getting into a Service Bond-like situation.

All the best.

Regards,
TS

I agree with the suggestion of Tajsateesh. Please note, it's a matter of fact that most employees (at officer/executive category - in general) after a period of 2-3 years, feel and believe that new joiners are appointed on a higher package, and it's true also. In many cases, the current employer gives a hike to their employees who have been working for many years too. However, for progress, switching jobs is necessary. When you join a new organization, it might be possible that the employees working there for many years can think the same about you as well.

Regarding Buyout Calculation

Proceed with your policy. All companies have their own policies as mentioned in your offer or joining letter. In my view, if they calculate a notice period of 3 months on gross, then your leave balance of 15 days can also be calculated on gross.

Also, request your current organization to release your services in a month or two (as per the joining date specified in your new offer letter). In many cases, employers agree to release employees early in one month without a buyout.

Notice Period Law

Is there any law specifying the number of days for a notice period, or do employers still have the right to add as much period as they wish to? As far as I know, only one month's notice is required by law. However, I request seniors to guide on the government rules regarding serving the notice period.