Can You Resign During Probation if You Agreed to a Minimum Stay Period?

Termination During Probation Period

Can employment be terminated by an employee during the probation period when the employee has signed an agreement stating: "Employee understands that s/he will be trained with requisite work experience within the initial employment period of six (6) months ('Probation Period') using the time and materials of the Employer. The employee further understands that the Employer will suffer some economic loss if the Employee leaves his/her employment within his/her Probation Period, or any time before the expiration of a minimum of six (6) months thereafter (altogether a period of twelve months hereinafter referred to as 'Minimum Stay Period'). The employee therefore agrees to remain with the Employer for at least the Minimum Stay Period."

The employee is still under probation, and she tendered her resignation. Has she defaulted on the agreement of the minimum stay period?

You cannot terminate her, as there is a price for everything. Deduct her notice period salary and relieve her. No one can bind a human against their wish. After you come to know that she wants to leave and you threaten her and retain her, will she work towards good selves for the company? She will not. So, it is better to settle and send her out.

As an HR professional, try to make them feel comfortable while they are in the company. You can't force comfort once they have decided to leave.

Regards.

Understanding Employment Agreements and Legal Implications

The above agreement is in the nature of a bond to serve a minimum period, even though no liquidated damages amount is shown. So, reasonable damages to the extent of expenditure incurred by management on training him may only be recoverable under Section 73 of the Contract Act. However, if the employee is a workman, then by virtue of Section 38-B of the Bombay Shops and Establishment Act, the provisions of Model Standing Orders apply to establishments in Mumbai. Under para 13 thereof, only one month's notice will be required to be given by a probationer. Any contract contrary to it is void.

In respect of a workman or non-workman, by virtue of Section 38 of the said Bombay Act, the Payment of Wages Act applies, wherein no deduction otherwise authorized by the Act is permissible from the wages of the employee. Thus, even damages arising out of a breach of contract will not be recoverable because of Section 23 of the Payment of Wages Act, which holds contracting out to be void. Virtually, Section 73 of the Contract Act is modified in the case of a contract with an employee by the provisions of the Payment of Wages Act, which are read into the Bombay Act. This is a new dimension contemplated subject to scrutiny by judicial analysis. This has been discussed by me elsewhere in the thread titled "Break of Bond."

Thanks,

Regards,
Sushil