Notice Period Consequences: Can We Enforce Penalties for Non-Compliance?

We have a clause in the appointment letter that states, "1-month notice period from either side." Can we add another clause stating the consequences in case the notice period is not served? For example, no remaining payment and no experience letter, etc. Please suggest.

Regards,
HR

Appointment letters represent our company's reputation and should not include any legal clauses. You are entitled to receive only your basic salary and dearness allowance during your notice period, and nothing more.

Does it mean that we can recover only 1 month's notice pay, but we still have to provide the employee with an experience/ relieving letter, even if they did not serve the notice period?

According to me, you are not under any obligation to give an experience letter or a relieving letter to any employee who has not served the notice period. Both under the labor laws and under the Contract Act, it is not necessary.

State Shop and Establishment Acts

However, some state Shop and Establishment Acts require that a service certificate be given. You need to see the wording of the sections. In many of them, the wording allows you to withhold it unless the employee has also completed his side of the bargain.

No one on the wrong side of the law can legally force you to issue the certificate.

Payment of Balances

Regarding the payment of balances, you are required to provide the wages due after adjusting any amount of notice pay. This notice pay includes not only basic and DA but also gross pay, including all allowances that he would receive if he were working during the notice period. You cannot adjust more than the notice pay.

Also, check the standing orders applicable to you. They may have specific provisions relevant to such cases.

I think there's a bit of a dichotomy in the remarks of Nathrao & Nilesh regarding the mention of not issuing Experience/Relieving Letters in the HR Policies. In many threads by employees who seek ways to abscond or avoid serving notice periods, we consistently emphasize that there is no way to evade serving the notice period if they want their documents. Yet, here we mention that it's illegal to state this clearly in the HR Policy. There should be a way for HR to preempt such situations in the first place.

Regards,
TS

There appears to be much inchoate notions regarding the conditions of employment that could be imposed through a contract. First of all, terms of agreement confer only rights and no powers, even if the Government happens to be a party to the contract. Hence, there cannot be unilateral enforcement; if the other party does not comply with the requirements of the contract, the remedy lies in a decree from the court or an award in arbitration.

The terms and conditions of a contract or a similar instrument do not have the force of law of a statute. Hence, the conditions cannot be invoked to deny, deprive, or curtail the ordinary rights of a person unless there is a statute that sanctions it.

Getting the experience certificate for service rendered is the ordinary right of a past employee. The employer cannot deny or deprive the certificate for collateral considerations. Such an action may amount to steamrolling the rights of the person concerned.

Hi there!

Here is the corrected text:

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May like to see the following link: https://www.citehr.com/533445-amendm...ce-period.html

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I have corrected the spelling, grammar, and formatting errors in the text while preserving the original meaning and tone. Let me know if you need further assistance!

One can safely do the following: As the law makes it compulsory to give the experience letter, why not mention in the relieving and the experience letter that the reason for the employee leaving is resignation and he has not served his notice period as per the agreement in the appointment letter. No employee would like to have this remark in his letters.

Regards,
Ashutosh Thakre

Hello,

I have a doubt. If the employee is not willing to serve the notice period but is willing to pay his one-month salary, do we have to give him an experience certificate?

Dear Experience certificate is the right of every employee given via certified standing orders or model standing orders applicable to all establishments. Regarding notice pay, as both parties are required to give notice as mentioned in the appointment letter or in lieu of that, it means giving the one-month notice or pay in lieu of that. Whether to deduct/pay basic + DA or full salary, it is a part of your practice because it is a give and take policy. If you pay on full salary, then you will deduct from the full salary.

Dear all, Thank you all for your replies. I have now added a clause related to not serving the notice period as follows:

Notice Period Clause

In case you have resigned from the services of the company without giving proper notice, the company will recover salary in lieu of notice from you; moreover, we may be forced to mention this anomaly in your relieving letter and Service Certificate.

However, the management's view on this matter is that we should not issue any relieving letter or service certificate to such an employee, as it may encourage others to also not serve their notice period. We believe there should be strong action taken against him/her.

Seniors, please provide me with your valuable suggestions. Can we withhold an employee's experience certificate and relieving letter just because he/she has not served the notice period?

Thank you.

They are asking me where it is written that even if an employee doesn't serve the notice period, we have to issue a relieving letter/experience certificate?

I agree with the requirement your management has. Go ahead and put it very clearly in the appointment letter: in case you do not complete your notice period, you will not be entitled to a relieving letter or experience certificate. In addition, we will initiate legal proceedings against you for the recovery of the notice pay and any direct losses caused by your failure to complete the notice period.

If the situation actually arises, go ahead and deny the relieving letter and experience certificate. But make it very clear to the management that if the employee goes to the labor commissioner or the court (very few will actually do that), we may be forced to provide the experience certificate. However, this is applicable only for the shop and establishment, not the factory, and if required by the state laws. Also, note that what you need to provide is a service record, not an actual experience certificate. As I have mentioned before, read your standing orders and the shop act in your state.