Is It Legal for My Employer to Deny Payment in Lieu of Notice Period After Policy Change?

This is related to the denial of an option for payment in lieu of the notice period after resigning by my employer. I submitted my resignation to my employer on 02.04.2015 at 09:30, maintaining a notice period of one month as per my agreement letter. However, there was a change in policy by my current employer on 02.04.2015 at 18:00, where the notice period was revised from one month to three months, effective from 01.04.2015. Will this change be legally effective for me?

Understanding that this change will affect me, I offered to buy out the additional two months' notice period (even though not mentioned in my resignation) and requested to be relieved on the stated one month's notice period. However, my employer mentioned that shortening the notice period by forgoing the employee's salary is not permissible, which I find very unfair. I asked for the revised signed version of the policy stating the same, but it has not been made available to date. I have also begun the handover of my job to my colleague to ensure a smooth transition of tasks within one month.

Please suggest a legally binding law for the employer as per labor laws, where shortening the notice period by forgoing the employee's salary is considered illegal.

Thank you in advance for your quick support.

Regards,
Swapnil

Revised period of three months is simply not binding on you. Change has been made probably keeping your resignation in mind, but it is not applicable to you. You must insist on leaving as per the one-month notice period as per your terms and conditions. Revising these kinds of terms with a backdate is not legally correct regarding pending notice cases of resignation.

Thank you, Mr. Nathrao, for your inputs.

Hello all, I request you to kindly share any legislative references as per labor law or incidents for reference.

Thanks.

As suggested by Mr. Natural, the employer cannot change service conditions with retrospective effect. Moreover, if you are working at the ground level as an engineer, you are probably covered under the definition of a workman as defined under the Industrial Disputes Act and thus covered under the Act.

Conditions of Service

Under Section 9A of it, conditions of service cannot be altered. See para 9 or 12 of Schedule IV of the Act. Make a complaint to the labor commissioner. Even otherwise, under the State Shops and Establishment Act, generally, the notice period of resignation is one month, and contrary to it by enlarging it is not valid. But check the concerned Act. There are a number of decisions cited in various threads that an excessive notice period is invalid. There is no need to pay a notice in lieu amount.

Thanks,

Sushil

Any unilateral and so-called announcement of a change in policy is not binding to parties to the agreement. The revision in the agreement needs consent after the signature of both you and your employer, as it was done the first time when you joined the company. The provision of the ID Act, as stated by Mr. Sushil Luthra, also fully protects you, as explained very clearly by him, in case you are in the Workman category. It's a simple requirement of the law that parties to any agreement or contract must sign a revised agreement to make the terms binding to both parties. You are right and free to proceed with the notice served, and the employer is wrongly trying to harass you.

Regards,
RDS Yadav
Management Advisor and Trainer

If an employer amended the said clause for three months for all, from a prospective date, then it is binding.

If the notice period is contrary to the provisions in the State Shops and Establishment Act or the ID Act, then the proposed alteration is invalid.

Thanks,
Sushil