Employee Wants Immediate Release During Notice Period: What Are Our Financial Obligations?

We have an employee with a contractual period of 5 years. He has completed 3 and a half years. Due to some reason, he has been given a notice period of three months by the organization (as endorsed in the contract of appointment). Now, after 20 days since he was served with the notice period, he comes and requests to be relieved immediately and receive the salary for the rest of the notice period (2 months and 10 days).

The query is -

a) On his request, if the organization relieves him with immediate effect, what is the liability on the organization? Does the organization have to pay the salary for the remaining days (2 months 10 days)?

b) As he is giving it in writing, in a way, he is resigning, does he have to pay three months' salary?

Employer has already served the notice and is ready to pay for the next 3 months subject to the attendance of the employee, and will release him after the completion of the notice period.

If the employee comes in between the notice period with some fresh request, it is null and void, as the employer has already issued notice.

The employee can reply to the notice, and willingly leave the employment but would not get paid for the remaining period.

Thank you for the reply. As you said, "an employee can reply to the notice and willingly leave the employment but would not get paid for the remaining period." Does the employee have to pay anything in that case? I suppose not, just wanted to clarify.

As the employer has already issued the notice, the employee is bound to serve the notice period as per the agreement clause. In case he denies the same, he has to buy the balance notice period as per the rules.

The balance is between the employee and the employer, and on any terms they can mutually agree upon.

You may instruct the employee to submit an application requesting the curtailment of the notice period. This application should be separate from and placed above the resignation letter. In the application, ask the employee to state that they are submitting it voluntarily and that no liabilities will be transferred to the company for the curtailment, including payment in lieu of the underserved notice period. Additionally, the employee should declare that they will not withdraw the application once the company authorities approve the request for the notice period curtailment.

In exceptional circumstances, the company may require the employee to bring two witnesses who must sign the application at the HR department.

Thanks,
Dinesh Divekar

Dear Friend,

Since the employee is already on notice, you should ask him to submit his request in writing. Pay him only for the days he has worked. As the company has given him notice as per the contract of employment, the company's liability is limited to paying for the days he has worked.

Warm Regards,

Bharat Gera
HR Consultant
9322404765

Employee is on a three-month notice period for exit. If the employee wants to leave immediately, the company's liability is limited to payment for the period he has worked, and that is all. In fact, the company is not obligated to agree to an early exit.

Notice on Exit in Employment Contracts

I have a different perception based on the purpose of notice on exit in the realm of employment. Here in this thread, the contract of employment between the employer and the employee is a Fixed-Term Contract of Service for a period of 5 years, terminable by 3 months' notice on either side. Now, the exit or foreclosure of the contract before the completion of the 5 years is at the instance of the employer, for which a notice of three months has been given by the employer for the obvious reason that the employer does not want to pay salary in lieu of notice.

Thus, the process of termination of the contract for 5 years of service stands started after 3 years by the employer through the issuance of a prior notice of 3 months. It means that the employer would continue the employee in his service only for a period of 3 months, and he would be paid salary if he works. If he finds alternative employment during the notice period, he can go out by foregoing his service for the remaining period as well as salary based on the principle of no work-no salary.

Answers to Queries

1) If the organization relieves the employee at his request on the 20th day of the 3-month notice already issued, it need not pay him salary for the remaining 2 months and 10 days as the foreclosure of the contract of employment between them gets concluded by acting upon the request of the employee on the 20th day itself.

2) His request for early relief cannot be construed as resignation so as to buy out the remaining notice period. Even in the absence of such a request for early relief, the organization is going to terminate his services as per the exit clause. Such a move of the employee, consequent on the intention of the employer to foreclose the contract, cannot be treated as a new offer validating acceptance from the employer so as to compel him to make a buy-out of the remaining notice period. Similarly, nor can such a move entitle the employer to compel him to serve the entire notice period when the employee is prepared to forego the salary for the period. The objective behind the notice of termination is primarily and predominantly to get the other party duly informed and prepared to arrange for alternatives only and not to garner any unusual monetary gains.

We have had a similar case where an employee was asked to leave because he was always late for his shift by 1 to 2 hours. He had been warned several times, both orally and in writing, that if he continued to be late, his services could be terminated with two months' notice. However, he did not mend his ways. We had to relieve him after 1 month with the assurance of 1 more month of severance pay. He did not inform anyone on his last working day and left the office without collecting the exit letters, such as the service certificate, etc. Are we still bound to pay him 1 month of severance pay? Please advise.

Regards, Vijaya

Dear Vijaya,

If he is a regularly appointed employee, you cannot simply send him out the way you mentioned. You ought to have taken formal disciplinary action against repeated misconduct of late attendance and then terminated him. If he was a Fixed-term Contract employee, then your action would have been correct. If so, send everything to his last-known address.

Thank you, Mr. Umakanthan, for your response. One of the clauses of his employment agreement with us states:

"Your Services are liable to be terminated any time for reasons:

i) As and when the company comes to know of any conviction by the Court of Law during the tenure of your services with us or conviction or

ii) Because of your giving false information at the time of your appointment or concealed any material information or given any false details in the application form or otherwise as regards age, education qualifications, work experience, salary, or any other information.

iii) Non-performance, disobedience, willful late coming or delays in work, or negligence, amounting to unsatisfactory performance.

iv) Any act committed by the employee which causes damage either financial or otherwise to the company's name, reputation, done due to negligence or with malicious intent or violation of company norms or discipline.

v) Unauthorized leave or intentional absenteeism without intimation or approval or deliberate insubordination.

In cases referred above, the company may terminate your services without payment in lieu of the notice period."

Despite informing/warning him several times over a period of 1 year, he continued to be late for his shifts, whereby the other team members had several issues. Hence, we had to make the decision to terminate his service after giving him one month's written notice and one month's salary in lieu of the notice period.

Dear Ms. Vijaya, you have not answered my question. Anyway, I presume that the individual is a regular employee on your roll. What your contract of employment mentions is "Discharge Simpliciter," which means simple termination of the contract of employment. Here, I'd like to quote the following observation of the Honorable Supreme Court of India in its judgment in U.N.Dutt & Co Pte Ltd., v. Its Workmen [AIR 1963 (S.C) 411]:

"An employer cannot base his right to discharge an employee purely on contract, and he cannot be allowed to say that under the contract, he has an unfettered right to hire and fire his employees."

In your case, the reason attributed for termination is that the employee was habitually committing the misconduct of late attendance. Then you ought to have conducted a domestic inquiry into the charges before terminating him.