Can Management Legally Extend Our Notice Period from 1 to 3 Months? Seeking Advice!

Dear All,

I have a query related to the notice period. Earlier, my notice period was 1 month (as per my Appointment letter). Now, Management wants to increase the notice period to 3 months. They are deciding to increase all employees' notice period as follows:

a) Resourcing Manager - 2 months
b) Functional areas like HR, Finance, and IT - 3 months

Reasons:
Management is concerned that we may leave upon receiving our Appraisal. The Appraisal will be effective from 1st April 2019.

Please suggest - can Management change the notice period, or does the notice mentioned in the Appointment Letter apply? We are a staffing consultancy based in Pune.

Notice Period in Employment Contracts

Notice period, if specifically mentioned, becomes an integral part of the contract of employment as it is a restrictive covenant in the matter of unilateral termination of employment either by the employee or by the employer.

Even in the absence of such a notice period clause in the contract of employment relating to the "workman" cadre of employees as defined under Section 2(s) of the Industrial Disputes Act, 1947, there is a statutory notice period of one month prescribed under Section 25-F(a) of the Act in the case of unilateral termination by the employer, which falls within the ambit of the definition of the term "retrenchment" under Section 2(oo) of the Act. (In the case of industrial establishments to which Chapter V-B applies, it is a 3-month notice under Section 25-N(1)(a).)

However, the Act is silent about the unilateral termination of the contract of employment by way of resignation by the workman. The reason I could presume is that basically an employment contract is in the nature of a personal contract devoid of specific performance that can be legally enforced. However, item no. 13 relating to the termination of employment of the Model Standing Orders framed under the Industrial Employment (Standing Orders) Act, 1946 specifically provides for mutual notice of one month and two weeks for monthly rated workmen and other workmen, respectively.

It would, therefore, automatically imply that the notice period of the same length or more than the one specified under Section 25-F(a) or at serial no. 13 in the Model Standing Orders can be fixed in the contract of employment by consensus based on justifiable grounds, and it would equally bind both the employer and the employees. A change in the notice period at the behest of the employer in respect of workman cadre employees in either case would attract a notice under Section 9-A of the ID Act, 1947, or an amendment of the certified Standing Orders in force, respectively.

In the case of other employees above the cadre of workman, the employer can change the notice period after giving due notice to the employees.

You have to bear in mind that the notice period can be position-specific too. Regarding this, the High Court of Delhi observed in Indian Commercial Pilots Association v. Union of India [2006(4) MLJ289] that there is no universal formula for fixing the notice period, and its duration may vary depending upon the exigencies, needs, or necessities and the essentiality of the service concerned. What is required is a reasonable notice period.