Can My Employer Threaten Legal Action Over Notice Period? Seeking Legal Advice on Exit Clause

Exit Clause in Appointment Letter

In the appointment letter, the following is the exit clause: "Your service can be terminated at any time from either side by giving at least one month's notice or salary."

Colleague's Experience with Notice Period

One of my old colleagues left the organization by giving only 10 days' notice as he had to join by July 15th. However, when HR insisted that he serve the one-month notice period, he left after just 3 days and requested to adjust the notice pay for the remaining period from his salary as per the appointment letter.

HR's Response and Threats

HR threatened him to serve the full one-month notice period and wrote in an email as follows: "Thus, it is further instructed to resume your duties from tomorrow, or else the organization is liable to take legal action against you, which includes filing a police case against you."

Employer's Unfair Practices

The employer in question has very unfair practices towards employees. In most cases, they do not complete the full and final settlement honestly, often deducting significant amounts for various reasons and paying only a small portion. This leads employees to prefer serving the minimum notice period after resignation.

Request for Legal Remedy

Could you please suggest a legal remedy in this case?

There is a shade of grey in your friend's action. Strictly speaking, either he serves notice period or pays upfront one month's salary. Anyway, there is no case for the police to intervene as it is an employment dispute. A legal practitioner can file a case if there is withholding of pay, etc.

Since your friend has already informed the management to adjust the remaining notice period from his salary, there is no breach of contract, and legal action does not arise on this score. However, if your friend has not complied with the handing over formalities, if any, as per the terms of appointment, the management is at liberty to take legal action for such non-compliance.

Regards,
P.S. Lakshmanan
S. G. Management Services
(PAN INDIA Consultant – Labour Law Compliance, PF, ESI, P Tax, Benefit Management & POSH COMPLIANCE) - KOLKATA

Exit Clause in Appointment Letter

In the appointment letter, the following is the exit clause: "Your service can be terminated at any time from either side by giving at least one month's notice or salary."

Has your colleague completed all the procedures before leaving the organization? It seems that your colleague has left after giving his resignation without completing the exit procedures. The HR department is free to pursue legal action based on the clauses in the appointment letter. There isn't much in the "Notice Period" matter that cannot be resolved with a cost. However, it is unclear what kind of complaint they intend to file against your colleague in an FIR with the police, which is a matter of concern.

In my suggestion, your colleague should consult a labor lawyer with all documents and correspondence related to the matter to determine the next course of action.