Facing a 3-Month Notice Period: What Happens If I Can't Comply and Legal Concerns?

Notice Period Clause Change

I have 4 years of experience in the HR field and recently joined a new company. My previous HR absconded due to mental harassment and a low increment policy. After discussions with the director, she paid an amount equivalent to one month's salary. Because of this incident, the company has changed the notice period clause from 1 month to 3 months (or 3 months' gross salary to the company). During my interview, they did not disclose these details. After my joining, when I asked about this clause, they explained the reason behind changing the notice period clause.

Leave Allowance Component in CTC

Another issue is that they have included a "LEAVE ALLOWANCE" component in the CTC structure, which is invalid. According to the leave policy, employees have the right to take leave, and employers cannot deduct leave allowance from the employee's salary. When I inquired about this component in the CTC, they explained that it represents the total annual leave expense to the company (total 45 days) and is a company-side component. They mentioned I would never receive this amount and should only focus on my take-home salary. However, they are only providing me with 7 sick leaves and 7 casual leaves in a year. After a year, I will be eligible for 21 privilege leaves.

I am unable to pay them 80k (equivalent to 3 months' salary); I can only serve a 1-month notice period if they agree to waive it off.

My Questions

1) If they pursue legal action, what should I do? What consequences could I face if I do not respond to their notices or court hearings?
2) Is it valid to deduct LEAVE ALLOWANCE from my salary/CTC structure?

Regards,
Bhavika

Understanding Notice Period and Dual Employment

There is no universal rule on such issues. It depends on the terms and conditions of your appointment. In most cases, you either have to serve a notice period or pay the company salary for the notice period.

Whether you want an experience certificate or not doesn't matter; however, whether your company accepts your resignation and relieves you matters. If your company doesn't formally relieve you, then you will still be considered an employee of the company. Working in another company during the same working hours as your current company will be considered a case of dual employment, which is illegal. Therefore, if you join another company without being relieved from your current company, there may be legal consequences, and your current company can take legal action against you.

My point of view is that being from HR, you should have asked about the notice period and other terms of employment before joining. Basically, it is a contract of employment for a stipulated period with certain terms and conditions agreed mutually by both parties. I suggest you try for proper relieving either by serving 3 months or paying partially in lieu of the shortfall notice. If you leave without any information, mostly they will follow the disciplinary process and close the file as terminated for unauthorized absence. Maximum termination will be the final resort. However, this will have an impact on your career when you apply for a new job and if they go for BGV. So try to get relieved properly.

Thank you for the quick reply. If I pay a 3-month notice period, my future company will not wait for 3 months. If I follow the rules, then I will have to depend on my luck. I will have to resign first and then search for a new job. For me, it is a foolish act.

Solution for Dual Employment Case

The solution in a dual employment case is to give resignation in writing via email and submit a copy to my current company. I should also explain to them my previous company's clause. If they agree, then nothing will be wrong. If they decide to go legal, another plus point from my side is that in my CTC structure, they have mentioned LEAVE ALLOWANCE in the deduction part, which is absolutely wrong practice according to labor law.

I have a solution, but I need more suggestions from all experts. I have attached the CTC structure file for better understanding.