Employee Resignation Spike: Can We Legally Act Against Those Skipping Notice Period?

Respected Seniors,

I am working as an HR Executive with a manufacturing company. I need your guidance on the matter below.

Employee Resignation Trend

We have a total of 11 branches all over India, and we have appointed employees in all branches for sales and marketing activities. In the last few months, a trend has started where employees leave the job without completing the notice period. On the 7th of every month, we credit the salary to individual employees' accounts, and on the 8th, we receive resignations from branch employees.

In the last 4 months, a total of 6 employees left without completing the notice period and handover formalities. We require employees to sign a two-year service bond, and there is a clause in the appointment letter stating that the employee must complete a 30-day notice period if they wish to leave.

Possible Actions Against Non-compliance

To stop this trend, can we reject the resignation letters of these employees and take legal action against employees who have not completed the notice period and left the job?

Please guide.

Regards,
Sagar

Examining Reasons for Quick Exits

First, the company needs to examine the reasons for quick exits. Critical self-analysis is the need of the hour. Legal recourse is available for people who exit breaching the terms of the job offer, but one must remember that the legal process is time-consuming and expensive, and a positive verdict is not assured. If your company is involved in too many such legal cases, market reputation also takes a sharp dip.

Clauses of Bond and Notice Period

The clauses of the bond and notice period need examination. Bonds can be treated as a restrictive employment practice in many cases. Attrition needs to be examined with care, and changes in HR policies would help.

I agree with Nathrao. First, you need to check the reasons behind the exits. There may be plenty of reasons such as company policy, work pressure, compensation, working culture, and opportunities in the market.

Conducting Exit Interviews

Take exit interviews; this will help in understanding the issues. The exit interview should be kept confidential, and the employee should trust the company. Don't argue with the employee on the points mentioned in the exit interview. Take their feedback in a positive way and analyze the problem; you may find solutions.

Dear Sagar, you do have the right and the most appropriate answer for the problem of sudden resignation by your employees in violation of the exit terms of their contracts of employment at the closing part of your own thread. Such a legal action can certainly mar the future career of such employees and, of course, it would be an eye-opener for other employees who are also fancying with such an idea of sudden exit. But how long can you hold on to an unwilling employee to the organization's service if he chooses to quit at any cost by fulfilling the exit terms? Therefore, take stock of the situation and try to find out the reasons for such mass resignations as suggested by the above learned members.

Responding to High Attrition

Come out of the mindset of a conventional personnel manager and respond to the situation of high attrition, particularly in the sales and marketing jobs across the country, as a professional HR manager by making some in-depth analysis. Find out the possible ways of retaining the employees for a considerable number of years and make positive suggestions to the management.

It is evident from your post that your staff are leaving just after the salary reaches their accounts. This is a common phenomenon in the industry, and the same trend is followed by everyone.

Understanding the Issue

The main issue is why people are leaving in quick succession and in groups. As an HR professional, you need to investigate the matter, ascertain what is the driving force behind this occurrence, or whether any lapses remain on your end.

Many times, it happens without reasons, but these occurrences provide us with different understandings, even though everything appears to be in order.

Preventive Measures

Your study and fact findings of this incident would guide you on the path to be followed to prevent such incidents. It is always advisable to take preventive measures rather than waiting for a cure. Do not settle the accounts of employees who leave without complying with the notice period and other exit formalities. Issue a communication to all of them to this effect.

Employee Engagement

Taking immediate action on a two-year service bond would create resentment among the employees. Those employees who already plan to exit could escalate the situation into trouble. In my suggestion, convene a meeting with the employees and present your ideas to come from their own mouths. This is an effective approach often followed to make employees feel part of the decision-making process.

Kind regards

Challenges in Managing Employee Exits

The suggestion to analyze the causes of employee exits is valid, but will the staff who have already left cooperate in the exit interview? I have my doubts. Determining the reasons for their departure is a significant challenge. It seems that some staff members are taking advantage of the company by quitting without serving the notice period, immediately after receiving their salary. This situation may require a more assertive approach. The following actions are suggested to address potential employees who may be planning to leave:

1. Do not accept or acknowledge the receipt of resignation letters.
2. Terminate the service of the person who resigns.
3. Withhold payment of dues.
4. Do not issue a service certificate.

Although these actions are not ideal, such measures might be necessary given the current situation.

Regards,
Vinayak Nagarkar
HR Consultant

Dear Mr. Sagar,

If the employee submits their resignation on the 8th and does not serve the notice period of 1/2 months, then:

1. You must request the resignee to complete the full notice period and ensure a proper handover of assigned work responsibilities and assets, such as a laptop, etc.

2. This request should be documented in writing or sent via email to the employee's official and personal email addresses. If possible, obtain the resignee's signature on the advisory letter.

3. If the resignee fails to serve the notice period, the calculation of their full and final dues should include a deduction of 1/2 month's salary (usually basic only in most companies) in lieu of the notice period not served.

4. Until the handover process is completed, the full and final dues can be withheld with proper notification through email or letter (sent via speed post).

5. The issuing of a relieving letter can be postponed.

6. The issuance of an experience letter can also be delayed.

7. If your relationship with the Labor Department is strong, consider copying the actions being taken to the Assistant Labor Commissioner or Labor Inspector.

8. In case there is a significant departure of employees from your company to a specific organization, you may escalate the matter to their senior management or HR department.

Legal action against an employee should be a last resort, except in cases involving criminal offenses.

Thank you, and may God bless you.

Maj. Sandeep Sahni
Plant HR Head
Jindal Tubular (India) Limited