Facing a Notice Period Dilemma: How Should I Handle a Sudden Policy Change?

Dear Experts, I have been working in a private software company for the last two years. Recently, I received a new job offer from another company. In the offer letter from my current organization, it was stated that the notice period is three months, and if I fail to complete the notice period, I would have to pay three months' salary or a portion thereof in lieu. However, they later sent an email specifying that "an employee who has received a salary hike and wishes to resign before one year must serve a three-month notice period and repay one month's salary."

I have now decided to resign and informed them that I will serve one month's notice and pay for the remaining two months as per the original offer letter. However, the management is insisting that I need to pay five months' salary even if I serve only one month's notice, citing a change in the exit policy.

I am unsure how to handle this situation. Your advice would be greatly appreciated.

Thanks and regards, Vamsi Krishna

Thanks for your concern. Please let me know what I can do in this situation. I have to join my new company in 15 days. I have already submitted my resignation 15 days ago. Can I take any legal action?

Legal Action and Notice Period Concerns

Legal action is subjective, as they have clearly documented the change in policy. This is to prevent job hoppers from taking advantage of revisions and demanding more from a new company. If paying money were the way out, no company would have the notice period concept. The notice period is in place to ensure that exiting talent is replaced by new talent trained to take up that role.

Having said that, you can go ahead and join a new company, have your PF transferred, etc. You are legally eligible to join the company of your choice. The surprise element is why they are asking for five months even though, as per the email, it's only a three-month notice and one-month payout. Considering you are working for one month, it should be down to a three-month payback. If the company is demanding extra, please take it in writing. With that, you can take legal action.

Since you signed the appointment letter accepting the clause of a 3-month notice period or salary in lieu of the notice period, the company cannot legally amend the service conditions without the consent of the concerned employee. However, before making any amendments that may affect the employees, the company must serve notice to all the concerned employees under Section 9A of the ID Act, 1947.

Previously, if you had not accepted the amended notice period of 5 months, you only need to serve a 3-month notice period if you have already served 1 month and completed the period. Therefore, you are required to pay 2 months' salary in lieu of the notice period. Even if you received a salary hike, there is no need to reverse one month's salary.

Attempt to resolve the existing formalities amicably. If not, since your company has violated the provisions of Section 9A, you can approach your regional labor commissioner. Furthermore, labor laws protect employees categorized as workmen under Section 2(s) of the ID Act, 1947.

Thanks & Regards,

V SHAKYA

HR & Labor, Corporate Laws Advisor

Dear Mr. Shakya,

Thank you for your reply. I am ready to fight legally, but my new company is saying that they require a relieving letter from my current organization.

What should I say to my new company? Is it possible to join without a relieving letter?

Thanks and regards,

Vamsi Krishna

Understanding My Notice Period Dilemma

I joined this company on 1st April 2015. In my offer letter, it was stated that the notice period was three months, and I have to serve the company for the entire three months. If I am absent or do not serve the notice period, or part thereof, I need to pay three months' salary or part thereof.

In September 2016, we received a common email to all employees stating that "employees who have received hikes and wish to resign before one year from the date of the hike need to serve a three-month notice period and have to return one month's salary." However, no one accepted or rejected that email. After sending this email, they released the hike letters the next day, stating that salary hikes are effective from the previous month, and they deposited the salary balance amount without our approval. Now, when I have resigned, they are asking me to pay five months' salary to get my relieving.

In this way, my company has started playing with employees. What should be my plan of action to get my relieving?

Regards,
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If you signed any documents related to your notice period while joining, then you are bound to follow the same. An employer cannot pressure you to complete the notice period as per their convenience. However, concerning your need for an experience letter to join a new firm, you should directly meet with the senior-most officer in your company and try to resolve the issues amicably.

Based on the discussion with the senior officer, you should decide on further actions.

Thanks & Regards,
Nilesh Kadam

Understanding the Importance of a Relieving Letter

A new company is absolutely right in considering a relieving letter as a No Objection Certificate (NOC) from your previous employer, indicating that you are no longer in a service agreement with them. Hence, it is an ethical practice to obtain a relieving letter from a new joiner. It is better to convince your previous employer to relieve you amicably. If they remain adamant, you can approach the labor commissioner for violating the provision of Section 9A of the Industrial Disputes Act, 1947, if they refuse to relieve you.

Case Study: Rachan Rajshekar vs. Bharat Earth Movers Limited

In the case of Rachan Rajshekar vs. Bharat Earth Movers Limited, Rachan joined BEML on April 2, 2007, as an engineer on probation, drawing a salary of approximately Rs 22,000 per month. He was still on probation when he resigned from his job on April 8, 2008, giving one month's notice for resignation as is the norm. To his surprise, his resignation was not accepted, and he was asked to pay Rs 2.5 lakh as damages to the company.

Some time after his appointment, BEML issued a company bulletin stating that those resigning had to pay damages of Rs 2.5 lakh. Therefore, the company asked him to pay the damage amount to issue him a relieving letter and experience certificate. Consequently, Rachan Rajshekar moved to court to get relieved. On August 22, 2008, the Karnataka High Court directed Bharat Earth Movers Limited to issue him a relieving letter on the same day without paying any damages.

Thanks & Regards,

V Shakya

HR & Labour, Corporate Laws Advisor