Notice Period Dilemma: Should We Pay an Employee Who Didn't Serve Full Notice?

Dear All,

Looking forward to expert advice on the following issue:

Notice Period and Payment Obligation

Our employment agreement has a notice period of one month from either side. One of our employees submitted his resignation dated 9th Jun '18. His resignation was accepted, and he was relieved from his services with effect from 16th Jun '18, as mentioned in his resignation email. However, he had not served his one month's notice period as stipulated in his offer letter.

The employee is now demanding payment for the days he had already worked. Is the company liable to pay him anything?

Regards, Nidhi Singh

Resignation and Notice Period Waiver

Resignation is the voluntary termination of the contract of employment by the employee, and it takes effect only when it is accepted by the employer. If it is covered by any specific term relating to the notice period in the contract, the employer would normally accept it subject to the fulfillment of the notice condition as mentioned in the contract or may at times waive it. It is a matter of the employer's exclusive discretion whether a request is made in this behalf by the employee or not.

In your case, the resignation submitted on 09-06-2018 was accepted, and he was actually relieved on 16th June 2018 despite the employee not serving the one-month notice period or not paying the salary in lieu thereof. This would certainly mean an implied waiver of the notice condition by the employer. Therefore, the ex-employee's demand for proportionate salary for the days he worked in the month is correct and justifiable as well.

Payment for 16 days' work is legally due to the employee who has exited upon acceptance of resignation. The company, having accepted the resignation, cannot adjust the days worked against the notice period. The question of the notice period does not arise here as the company has the authority to waive it off by express words or by action (in this case, the action of accepting the resignation).

Good employers do not quibble over such small matters of withholding 18 days' pay. Pay him and let the ex-employee be happy.