What Is The Meaning Of The Salary In Lieu Of Notice?

Hello everyone,

What is the meaning of the salary in lieu of notice? What if an employee resigns and doesn't serve the notice period?

Regards,
Swati

The letter of appointment normally contains a stipulation that if an employee wants to resign, he/she has to give one month notice (the period may vary with the company) or salary in lieu of notice. This means if the employee does not give one month notice or as many months as prescribed in the letter of appointment, he/she has to pay one month's salary or as many months' salary as prescribed in the letter of appointment.

B. Saikumar

Dear Guidance Seeker,

Please clarify if the person who tendered resignation is/was a probationer or an employee already confirmed upon completion of the probationary period. An employee on probation does not need to give any notice period.

Kritarth Team

While resigning from service, one should give a notice period of one month before leaving. This notice period will help the organization to recruit another person without any work suffering. Hence, the notice period is required to be given.

In case there is no work suffering, the management may relieve the employee from service upon the employee's request without a one-month notice. In such a scenario, the employee will have to pay one month's salary in lieu of the notice period. In other words, the company can deduct the amount from the full and final settlement or waive it, depending on the employee's service duration.