How to Handle Short Notice Period Requests Without Disrupting Projects in Our SME?

We are an SME software company. We are facing a problem with resigned employees requesting to be relieved from service for a shorter notice period than stipulated in the employment agreement of 45 days. A few of the projects get held up if we agree to such requests, especially if the resource is a very important one and cannot be replaced quickly.

Notice Period Compliance

Can we insist on serving the notice period as per the employment agreement of 45 days? We are also considering increasing/amending the notice period from 45 days to 60 days for all employees. Can we do that for existing employees who have already signed employment agreements with 45 days?

Please advise.

Thanks in advance.

Changing Conditions of Employment

Conditions of employment can be changed. Earlier, top-notch software companies had just a 30-day notice period. Later, it was extended to 60 days, and then even to 90 days.

In your case, you need to issue a letter regarding the extension of the notice period on your company letterhead to each employee, obtain their signature on the photocopy, and retain it in the employee documents. If you wish, you may remove the clause about payment in lieu of the notice period.

Since this letter is specific to the notice period, you may add one sentence stating, "other terms and conditions of employment would remain the same."

Most changes are not necessarily smooth, and your company could be no exception. Therefore, it is better to call everybody and inform them of the changes in the conditions of employment before issuing the letter. If you do not wish to call a meeting, then at least convene a meeting of the HODs and instruct them to relay this message to everybody. After this meeting, issue an office circular and display it on the notice board. If a few staff members express frustration, handle it calmly.

Thanks,

Dinesh Divekar

Understanding Job Offer as a Contract

A job offer is a contract. A contract is a meeting of minds on a particular subject—job. Once the company feels the need to revise the notice period for all employees, they can go ahead and frame the new policy, circulate it to all employees, and get individual signatures of acceptance. This is essential because you are making a change that could be adverse to the employee in many cases, i.e., the notice period is being revised upwards.

However, it is always good to add this sentence in your offer letter: "You are required to sign a copy of this letter confirming the acceptance and compliance of the terms of the offer and policies existing and modified from time to time."

Thank you very much, Mr. Dinesh and Mr. Nathrao. Is it the accepted practice to get signatures of all employees for the change in the notice period? We have a SOP (Employee Handbook), and whenever we make any amendments to it, we circulate the updated SOP to all employees with a version control. Is it sufficient to do so, or do we need to get a sign-off from all employees? For all new hires in the last 3 months, we have issued employment letters with a 60-day notice. My concern is regarding existing employees with a 45-day notice. Please advise. In an MNC, if a revision is made, do they also take a sign-off from all employees? Thanks for your valuable time.

Signature is taken basically to avoid an employee from claiming that he did not know of a changed notice period.

It now depends on the company how to deal with the matter.

Offer of Appointment and Service Rules

You can include the following paragraphs in your offer of appointment and accordingly revise your service rules.

During probation, the services will be liable to termination by giving one month's notice on either side without assigning any reasons therefor; provided also that the Appointing Authority shall have the right to terminate the services of the appointee forthwith or from any subsequent date on payment of a sum equivalent to the amount of pay and dearness allowance last drawn by the appointee for the period of notice in lieu of the notice period or by the period by which such notice falls short.

After satisfactory completion of probation, the services will be liable to termination by giving three months' notice on either side without assigning any reasons therefor; provided also that the Appointing Authority shall have the right to terminate the services of the appointee forthwith or from any subsequent date on payment of a sum equivalent to the amount of pay and dearness allowance last drawn by the employee for the period of notice in lieu of the notice period or by the period by which such notice falls short.

Procedure for Changing Employment Contract

Please note: If you are going to change the contract of employment after the employee has joined your organization, the procedure would be the same. You have to make an offer, the employee has to accept it within the given time frame, and communicate the acceptance back to the authority who proposed the offer. If this process does not complete, then the clause will not hold any legal sanctity. Once the cycle is complete, it can be modified only by following the same process.

The notice period will be binding on both sides (employee and organization). If the organization wishes to terminate the services of an employee, the organization also has to give termination notice in advance.

In the absence of serving the notice period, the terminator of the contract should be ready for payment of a sum equivalent to the amount of salary last drawn by the employee for the period of notice in lieu of the notice period or by the period by which such notice falls short.

Serving the notice period cannot be forced as it will amount to bonded labor.

No provisions of the offer or any changes thereafter should be arbitrary and contradict Natural Justice. Any obliqueness will be prone to be challenged before the Competent Court of Law by aware employees.