Is It Legal for My Company to Demand a Notice Period Buyout and Withhold My Experience Certificate?

Notice Period and Buyout Issue

There was a 3-month official notice period in my last company. After 2 months of my resignation (I resigned voluntarily for better prospects), the company HR suddenly called me one day and asked me to leave that day itself. Along with this, she mentioned that I needed to buy out the rest of the notice period. When I asked for clarification, she said I didn't have a choice. Now, my final settlement document has arrived 45 days after separation, and I see a hefty amount as the buyout sum. Is this even legal? I think it is not, but I don't know how to fight this or whom to approach. If anyone is willing to help, please leave a comment. I am working in Bangalore.

Experience Certificate Withheld

Note: They have withheld my experience certificate/relieving letter and said it will only be given after clearing the full and final settlement amount.

P.S.: This country really needs specific laws in place to put an end to these kinds of separation-related issues. These are becoming very common day by day.

Legal implications of forced resignation and notice period buyout

In the case of a breach, any terms of the contract of employment not specifically covered by existing labor law would fall under the purview of the Indian Contract Act, 1872 for redressal. Your resignation, being prospective and set to take effect from a future date, especially during your notice period, the HR's action of abruptly compelling you to leave by buying out the remaining notice period, likely without your written consent, is not only illegal but also very high-handed. By agreeing to serve the full notice period, the employer's action of pushing you out before its completion constitutes a counteroffer. If you did not agree, the employer should have paid you for the remaining period before relieving you. The current situation calls for a rational rather than emotional response as the employer has made a significant error. Therefore, accept the Full and Final settlement, obtain the relieving orders and experience certificate, and proceed to your new job.

Steps to recover unauthorized deductions

Subsequently, consider one of the following actions to recover the unauthorized deductions and the notice amount from your previous employer:

If you fall under the category of a "workman" as per the ID Act, 1947, file a claim under section 33C(2) of the Act in the Labor Court after serving notice to the previous employer. I suggest this route because even if you are classified as a workman, your gross monthly salary exceeds Rs. 24,000, making you ineligible to file a claim under the Payment of Wages Act, 1936 for unauthorized deductions.

If you were employed in a supervisory or managerial role, you must file a Civil Suit solely for damages.

I hope this advice guides you in addressing the situation effectively.

Best regards, [Your Name]