Can I Leave My Job Immediately by Paying Instead of Serving Notice? Seeking Advice

I am writing this letter to discuss the terms of my employment. It is clearly stated that "Employment can be terminated by you, with or without cause, giving the other party a 2 months' notice - the company reserves the right to either pay or recover salary in lieu of the notice period."

I would like to inquire if I can leave the company immediately by paying two months' salary instead of serving the notice period. My employer is currently insisting that I work for the full two months to complete the pending projects.

Please advise me on how to navigate this situation and find a resolution.

Thank you for your attention to this matter.

Sincerely

If you require a proper relieving order, you need to serve the notice period. It is up to the employer to waive or compensate your notice period. If the employer is adamant, you need to serve and get yourself relieved, which is right in all propositions.

Though it is the appropriate solution to abide by the terms and conditions of employment and have a golden handshake with the employer to get a relieving letter, in exceptional situations, an employee may not want to adhere to the contract and may prefer to pay notice pay in lieu of serving the notice period. Can the employer seek an injunction against him to leave the job and serve the notice period? The answer is no. After the employee has tendered the notice pay amount, unless the employer has contemplated a domestic inquiry against the employee, the employer should generally relieve him.

Legal Framework and Employee Rights

Now the question arises: in the instant case, the queriest is working as a senior software engineer in Bangalore. Thus, he is governed by the Karnataka Shops and Establishment Act. Under section 39 of it, an employer is required to pay only one month's notice or pay in lieu thereof when terminating an employee's services. If the employer has the option to pay wages in lieu of the notice period pay, it would be arbitrary and discriminatory to deny an employee that contractual clause. A clause enabling only one party to pay the notice pay would be contrary to section 23 of the Contract Act as it may amount to discrimination, arbitrariness, and bonded labor, which is contrary to public policy under the Constitution of India.

Implications for Workmen

Furthermore, for example, if the queriest happens to be covered under the definition of a workman as defined under the ID Act, assuming that he is working at the grassroots level, then the employer is allowed to give one month's notice or wages in lieu of notice at the time of retrenchment, in addition to other amounts. It would be discriminatory if a workman is asked to give notice pay of more than one month in lieu of the notice period or even asked to serve the notice period by delaying his relieving. The clauses have to be equitable.

Thanks,

Sushil

Legal Consequences of Immediate Resignation with Notice Pay

In continuation of the above, the question arises in the wake of the legal position stated above: what is the consequence if an employee gives notice to the employer to immediately relieve them and simultaneously tenders notice pay in lieu of working the notice period, but the employer refuses to relieve them?

As per Bowen v Goes, a case decided in 2012 by the Ontario Court of Appeal, the payment of notice pay in lieu of the notice period is considered liquidated damages. Therefore, an employee who repudiates the contract by resigning with immediate effect, as per the contract or in terms of Shops and Establishment provisions, and the employer who refuses to honor these terms by not relieving the employee, becomes liable to pay damages. These damages are not considered as liquidated damages but rather as common law damages under section 73 read with section 75 of the Contract Act.

The employee has the right to sue for damages against the defaulting employer even after being relieved. Additionally, the employee may also seek relief from the Inspector under the Shops and Establishment Act or the ID Act, where applicable, to facilitate their relieving from the employer.

Thanks,

Sushil