Is My Company in Kolkata Wrong for Not Paying Me for My Full Notice Period?

Hello, I worked for a Kolkata-based IT company. The offer letter clearly states: ++++++++++++++++ Notice of Termination Notice of termination of employment by the employee shall be 45 days' notice in writing or payment in lieu of notice. Such notice may not be offset by unused leave. The same shall be applicable when the employment is terminated by the company. ++++++++++++++++ A week after I resigned (giving 45 days' notice as we agreed), the company told me to stop working and ended the work relationship. They paid for the days I worked (of course, after too many delays, follow-ups, and arguments!) but are refusing to make payment in lieu for the remaining notice period they didn't let me serve fully.

Company's Argument

1) Because an employee resigned (while still under 6 months probation), the company is not obliged to respect the notice period.

2) They also quote: Section 15 of the WBSCE Act, +++++++++++++++ "The services of a person employed in any shop or establishment, who has been in continuous service for not less than one year in such shop or establishment, shall not be terminated without giving him one month's notice, in writing, showing the reasons for such termination and until the period of notice has expired or until he has been paid, in lieu of such notice, wages for the period of such notice."

To which I wonder: - Aren't they obliged to follow what was put in the offer letter? - And if not, were the claims they made in the offer letter bogus?

Please let me know my options further—are they obliged to respect the notice period or not? [Of course, a few people advised, "just forget it and move on," but if we all have such an attitude, why do we sign contracts in the first place and have laws in place?!]

Thanks a lot for your guidance in this matter.

Your post seems a bit confusing to me. You submitted your resignation with 45 days' notice and continued in service, anticipating the acceptance of your resignation, right? A week later, the company asked you to stop working or refrain from coming to work without any specific intimation regarding the acceptance of your resignation or your relief. Does this imply that your resignation was accepted on the date of communication, and on the same day, you were relieved in waiver of the notice period? Despite the delay and pressure you faced, you were paid for the days you worked from the date of submitting your resignation until the date of communication from the management.

The company did not terminate your services but relieved you from service before the notice period you offered expired. You were paid for the days worked during the notice period. In this situation, how can you claim that the management violated the offer conditions?

Please let me know if you need any further assistance.

Best regards, [Your Name]

Thank you for your response, and sorry for the confusion. Let me clarify further—I never asked for premature relieving and am willing to serve the full notice period. Hence, if they ask me to stop working while serving the notice period, it is considered a "termination" (at least that's what happens internationally, and please correct me if I misinterpret anything here).

Isn't it fair that just as the employee is made to serve the full notice or pay in lieu of the notice period, an employer must also let the employee serve the full notice period or pay in lieu of notice? I've spoken with a few friends and received conflicting responses. That's why I posted here to seek expert opinion—what is the normal practice (or what does the law say) in such a situation?

Regards

Understanding Termination and Notice Period Obligations

In my opinion, if an employee resigns, irrespective of the probation period, the employment relationship continues until the last date of the notice period. This includes all responsibilities and liabilities on both sides, as well as all agreed-upon terms.

Under such circumstances, if no conversation about premature relieving has occurred, and an employer asks the employee to stop working, it is classified as "termination." Thus, the employer is liable for payment in lieu of notice to the employee.

However, this is my opinion, which may be biased. That's why I am seeking expert opinions in this forum, based on their understanding, experience, and expertise in these matters.

Thanks for your kind attention.

I can very well understand your feelings. From the perspective of the sanctity of the terms and conditions forming part of the contract of employment, your views are correct. When an employee conveys his intention of resignation together with his unqualified willingness to serve the notice period already agreed upon mutually, reciprocal courtesy demands that the employer should formally inform the employee of his acceptance of the same with certain modifications, if any, within the scope of the agreed terms.

Your management could have very decently informed you that the notice period is waived and therefore you are relieved forthwith. However, it is the mindset of the IT and ITES industry that they are above the laws of the land, and their general HR practice is based on free hire and fire. Therefore, it is not prudent to engage in a one-to-one fight with them. Their watchful eyes on quarterly financial performance are totally blind to the socio-economic background of an Indian Knowledge Worker, and their HR people are there only to implement their policies and not to bring up questions of legality or otherwise of the policies. That's why, at times, a Higher Judicial Forum like that of a High Court has to remind them of the basics of Indian Labour Laws. In such a state of affairs, one has to be more rational than emotional.

Let me share some more insights from my research on the legality of relieving a resigning employee before the expiration of the notice period mentioned in their resignation. The ratio decidendi of the Delhi High Court's judgment on this matter can be found in its ruling in DASS STUDIOS v. R.K.BAWEJA, LABOUR COURT, DELHI [1972(1) ILR 856].

Understanding Sec.30 of the Delhi Shops and Establishments Act, 1954

When explaining Sec.30 of the Delhi Shops and Establishments Act, 1954, which addresses the termination of employment for an employee with a minimum service of three months, the honorable High Court made the following observations:

"A plain reading of Sec.30 of the Act clarifies that while the notice of one month under subsection (1) is for the employee's benefit, the notice under subsection (2) is for the employer's benefit. If an employer issues a notice under subsection (1), the employee can leave the service even before the one-month period expires. Similarly, when the notice is issued under subsection (2), the employer can terminate the employee's services even before the one-month period ends. The employer is not required to wait for the full one-month period before terminating the services, just as the employee who receives notice under subsection (1) is not obligated to wait the full month before quitting the employer's services.

For instance, if an employee serves a one-month notice on 17-07-1968, resigning effective from 16-08-1968, and the employer accepts it on 23-07-1968 with immediate effect, then the employee CANNOT INSIST on continuing in service until the notice period's end on 16-08-1968."

I hope the legal standpoint on this matter is now clear to you. The only mistake your employer made was acting hastily out of enthusiasm and deviating from conventional practices. It's best to leave it as is and focus on your career.

Regards

Thank you for inviting me to offer my views on this subject. The posts by the querist are a bit confusing to me as well. Under these circumstances, I avoid giving any views or opinions.

The querist is governed by the WBS&E Act 1963, the Service Contract document, and Standing Orders if his company has or had 100 employees. WBS&E Act section 15 only addresses the termination of services by the employer. The querist has referenced the said section in his post #1. According to it, a person with more than one year of service cannot be terminated without giving one month's notice in writing, showing the reason for such termination, or salary in lieu thereof.

As per the offer letter (Service Contract document), there is a requirement of 45 days' notice from either side to terminate the employment or payment in lieu thereof, to my understanding as stated by the querist. According to the SO Act, a notice of 30 days is required from either side or payment in lieu of notice in the case of the termination of a permanent employee. Unless the Standing Orders are certified with a 45-day notice, the company cannot enforce a 45-day notice. A company cannot supersede any law in force by signing any Service Contract document.

You have rightly said in your post no. 5 that the "IT and ITES" industry is above the law of the land and their general HR practice is based on free hire and fire. In my view, the query in this thread is about whether an employer can terminate the services of an employee who is on notice pay. The answer to it is No. And if terminated, the employee has to be given a salary in lieu of the remaining working days.

The legal position given by you in your post #6 is not applicable to the querist since he is not governed by the DS&E Act 1954. I hope you will agree with my contention.

Regards

Thank you very much @Umakanthan53 for taking the time to do more research on this and share it with the wider community. I appreciate your further clarification @Korgaonkar on this as well. Honestly, I need to carefully read these sections/acts a few times before I can fully understand them and arrive at a conclusion. From @Korgaonkar's last response, it does look to me like the company is liable to pay salary in lieu of remaining working days, irrespective of whether the employee resigned and is serving a notice period (provided the employee hasn't requested early relieving). Let me know if I misunderstood anything.

Please let me know if you are stopped from working in writing. Umakant has explained everything in writing. Even if there is a 6-month rule in West Bengal, it should have formed a part of your appointment letter.

Since you are stopped working, you consider that your notice period is waived. Just ask them for a letter of acceptance. Termination should have a reason. Hence, seek a letter of acceptance.

The employer has all rights to relieve you from the services before the expiry of the notice period against your resignation.

It is at the discretion of an employer to keep you till the expiry of the notice period. You can sue him only if he has terminated you without notice period or notice pay.

Can a person who is working under "Probation" be regarded as an employee under any Act? If not, the question of compensation does not arise under the Act. However, as per the terms of the offer letter, the concerned person has given 45 days' notice of resignation (as stated by him).

Hence, as the company has relieved his services within a week of the resignation, he is entitled to compensation for the remaining days of the notice period (as per the offer letter). So if he approaches the courts, he is most likely to get compensation. However, courts in India take a very long time to give judgments, which will result in mental tension and excess legal fees.

Hence, if he takes a rational view, he can just forget it or give a legal notice or two to the company just to harass them.

"A week after I resigned (giving 45 days' notice as we agreed), the company told me to stop working and ended our work relationship. They paid for the days I worked. From the above, it is clear that the querent worked for one week and tendered resignation, giving a notice period of 45 days as agreed. The company stopped the work relationship, but nowhere was the querent terminated. Early relieving, i.e., before the expiry of the notice period, cannot be termed as termination. The employer has the right to waive off the notice from either side.

Let's consider the matter from the management's perspective as well. Within a week, what status could the querent create for themselves? What fruitful work could they do for the company during the notice period after resigning within a week? Sometimes, management may not have sufficient work to assign to a person who has resigned. Management generally believes that after resignation, a person's output may not be as high as before. It is within management's prerogative not to share their trade/business secrets with the resigned person any further.

A substantial amount is spent by the company on engaging a person. In a scenario where an individual resigns just after a week, and the management simply relieves them while waiving off the notice period and paying all dues for the worked days, I believe the management has acted appropriately. As mentioned earlier, management has the right to waive off the notice period, even from the employee's side. Without full work commitment, no management would be willing to pay a salary. Management is always cautious, prioritizing their interests/profits first and then those of the employees.

My frankness may not be taken otherwise.

Thanks,

V K Gupta"

The divergent views offered by all the learned friends have indeed added piquancy to the debate. The firm conviction of the poster that the hasty act of the management in relieving him before the expiry of the notice period mentioned in his resignation letter is illegal, the hesitation of Mr. Korgaonkar in giving a conclusive answer though he rightly touched certain points in favor of the poster, the strong view of Mr. Rajans68 in favor of the poster based on the terms of the offer of employment, and the strong argument of Mr. V.K. Gupta advanced for the management based on the balance of convenience (not in its legal sense but only in its literal sense) compelled me to rethink and go in for a deeper search by reframing the central issue of the debate as follows:

Whether a Prospective Resignation Given by an Employee Can Be Given Effect to by the Employer on an Earlier Date?

Resignation is the voluntary act of the employee to terminate his contract of employment with the employer. However, in a contract of employment, resignation is not unilateral but bilateral in character, requiring the acceptance of the employer. As such, the employee's right to exit on his voluntary act of resignation becomes subject to the fulfillment of notice obligations, if any, and the failure to do so can entail summary rejection of the resignation. In other words, he has to serve the entire notice period or pay notice salary in lieu of notice as stipulated in the contract of employment, and the choice is his. When he offers to serve the notice period stipulated in the contract of employment, in terms of its effect, it becomes a "prospective resignation." It can be effective only from the date mentioned therein and not earlier, though it is accepted by the employer. In this connection, the Andhra Pradesh High Court has held in Coromandal Fertilizers Ltd. v. P. Venugopal [1986(1) LLJ 417] that the letter of resignation is a "form of offer" by the employee and hence it is open to the management to accept or reject the same, but it is not open to the management to accept the resignation from a different date other than what was offered because such an acceptance would amount to a counter-offer which again requires acceptance from the employee.

Therefore, the contention of the poster is correct, and he can successfully stake a claim for wages till the expiry date of the notice period offered by him since he was relieved earlier by the management without his consent.

Thank you everyone for taking your time, energy, and efforts to dig deeper into this issue.

To clarify further:

- The debate isn’t about whether the employer has the right to relieve (or waive off the notice period, whatever phrase we want to use for that!) an employee prematurely during the notice period. Of course, they do!

- We’re debating: Can they do so without payment in lieu of the remaining notice period, considering a) a 45-day notice period as agreed on both sides, and b) the employee is willing to work right until the last date of the notice period and never requested a notice period waiver!

@RAJANS68 Thanks for being supportive of my point of view here. Yeah, it’s unfortunate that courts in India take long to give judgments (although not entirely their fault, I believe, as we all know how understaffed and stretched our judiciary is). I could let it go, but if these people are let go so easily with no opposition, it’ll only encourage such employers to find their next victim…

@GUPTA VK As Mr. UMAKANTHAN53 mentioned, we’re not debating what’s in the employer's favor or not (from a convenience or financial point of view, etc.). We’re debating whether they are legally or morally correct to not follow up on what was agreed in the offer in light of the circumstances of what happened.

@PRATHEEKSHAA I appreciate your opinions. But I’d appreciate it more if you could please share any past judgment or any logical rationale why the employer is right to not follow up on what was agreed.

Thanks all! I’ll speak with my employer with all these inputs and see if they revisit their point of view. Will keep you all updated!

Regards

Since a lot of people have spent their time, efforts, and energy addressing this thread, I thought I'd update you. I spoke with my employer regarding the notice pay (as per our agreement), and they responded. Basically, they won't address it because of so-called "softer elements" (unsatisfactory performance, duration of employment).

"So from a softer aspect of you being entitled to the benefits - my short answer is no. If you think you are, like we mentioned before, hire a lawyer and do it with paperwork."

I'm a bit confused—these so-called "softer elements" can be reasons to discontinue an employee's service or inputs to an employee's performance appraisal. But how can it be a valid justification to not fulfill their obligation under what was agreed upon? Of course, such elements were never communicated while I was employed, making me believe it's just a pretext to avoid their obligation.

Any suggestions on how I may proceed further? Thanks in advance!

I have advised you earlier. Now, check if there is any clause regarding tendering resignation within 6 months probation.

When they stopped you from working, they have to provide a letter showing the period of service and when you resigned.

Notice Period Practices and Employee Rights

Learned HR experts and members have greatly contributed to discussing the prevailing practices followed by some companies. The normal rule/practice followed by some companies is a one-month notice period for officers and a two-month notice period for managers and above. However, some companies with Certified Standing Orders (SO) unexpectedly relieve the resigning employee before the due date of relief. This action occurs when the company perceives that the employee has resigned and will no longer show interest in work, leading to problems for the affected employees. This practice is more common in situations where there is a strained relationship with the particular employee.

Interestingly, some companies include a clause in their SO stating that the company reserves the right to terminate employment before the due date, which may be due to the lack of clear rules on the matter according to the Labor Commissioner.

The arbitrariness in the relieving process puts the employee under strain, affecting the good relationship built over time, especially on the verge of departure. Instead of ending the employment relationship on a positive note with a farewell, many relieving cases now conclude with arbitrariness.

I hope and request that more knowledgeable members shed light on this matter.

Regards, c.neyimkhan

Management Jargon and Employment Contracts

Using management jargon with negative connotations amidst a situation where one is reluctant to admit their mistake has become fashionable nowadays in the higher echelons of management. Softer aspects of employment include the contract of service as well as total compliance on the part of both the employer and the employee.

In the case of the questioner, the contract of employment comes to an end through their prospective resignation only, not due to discharge or dismissal by the employer on grounds of laxity or other softer aspects such as unbecoming conduct or violation of the code of conduct by the questioner. If the employer had found any such negativity in the employee's performance, what prevented them from rejecting the letter of prospective resignation and initiating disciplinary action instead of accepting it immediately?

It is, therefore, left to the discretion of the questioner whether to legally challenge their employer or to simply leave based on the principle of "enough is enough."

Notice Period Practices and Employee Rights

Learned HR experts and members have greatly contributed to this prevailing practice followed by some companies.

The normal rule or practice followed by some companies is a one-month notice period for officers and two months for managers and above. Even then, some companies with certified standing orders may suddenly relieve the resigning employee before the due date of relief. This occurs when the company feels that, as the individual has already resigned, they may not take interest in work and thus decide to remove them before the due date arbitrarily, leading to problems for the affected employees. This practice is more common in situations where there is a strained relationship with the particular employee.

Strangely, some companies include a clause in the standing orders that reserves the right for the company to terminate the employment of a particular person before the due date, and the Labour Commissioner certifies it, possibly due to a lack of clear rules on the matter.

In any case, there is arbitrariness in relieving the employee, putting strain on the good relationship built over a period, just on the eve of departure.

"All is well that ends well;" this is now missing in many relieving cases. Instead of concluding the relationship on a happy note and a farewell, it now ends with arbitrariness.

I hope and request that more knowledgeable members will shed light on this matter.

Regards, HR Consultant

Hospet-Bengaluru, 1.10.16