Notice Period Dilemma: Can I Legally Challenge My Company's No Buy-Out Policy?

At the time of appointment in June 2013, it was mentioned in the offer letter that I need to serve a notice period of one month if I put in my resignation. However, the company revised its notice period policy to require a 3-month notice period in June 2016. This change was communicated via email: "For the purpose of terminating this employment, either party will be required to give notice of three months in writing, or salary in lieu thereof to the other party."

I have recently submitted my resignation, expressing my willingness to serve one month's notice and pay for the remaining two months. Unfortunately, the company is not offering a buy-out option. Am I eligible for the 3-month notice period?

Please advise me on how I can proceed legally.

You have not mentioned in what capacity you are employed—whether as a workman or otherwise. The company can revise its notice period policy depending on factors like the attrition rate. However, for the workman category, it would amount to a change in service conditions. As such, the provisions of the Industrial Employment (Standing Orders) Act, 1946, or the Industrial Disputes Act, 1947, must be followed before effecting such a unilateral change. In other cases, no such restrictions apply.

In your case, a partial buy-out option is available to you as per the content of the email you mentioned. If you are not concerned about the effects of any confrontation with your management in this regard, it seems to me that you can legally exercise the buy-out option. Remember, our adversary always engages us in a fight against our weaknesses only.

Regards

Understanding Notice Period Policies

Since you are a senior engineer now, you belong to the supervisory cadre, if not managerial. Therefore, you are covered by the revised condition of exit only. Why your management refuses to accept your offer of one month's service plus two months' buy-out has to be explained only by them. At times, people may resort to reading the letter of the law without understanding the logic and might be under the wrong interpretation that buy-out means only the entire three months. So, try to convince them once again. Anyway, your option to fulfill the notice condition the way you expressed is quite legal.