Legal Concerns of Early Employee Release During COVID-19 Lockdown: What Should We Know?

One employee resigned in the last week of February 2020. At the time of accepting the resignation, it was stated that the employee must serve the notice period as per the appointment letter and will be relieved upon its completion, which is the last week of May 2020.

Due to the lockdown, there has been a significant decrease in workload, and up to this date, the employee has not been assigned any tasks. As a result, there has been no deduction in pay during this period.

We now intend to relieve the employee by the 17th of April 2020, and up to that date, they will receive their full salary.

My question is whether there are any legal implications of early relieving during this lockdown period.

Regards

Compliance with Notice Clause in Employment Contracts

Strict compliance with the notice clause regarding the unilateral termination of the contract of employment by either party is a contractual obligation. Failure to do so would require one to compensate the aggrieved party. It appears that you accepted the resignation only on the condition that the employee serves the entire notice period as stipulated. Your message does not mention the existence of any buy-out option for the employee or whether you rejected any such option proposed by the employee. Therefore, as it stands, the employee should be allowed to complete the full notice period. Your intention to relieve the employee earlier due to the lockdown would put the employee at a disadvantage, leading to a disruption in employment and loss of earnings.

Considerations for Early Release

If you wish to release the employee earlier for any reason, it would be considered a counteroffer, necessitating the employee's unconditional acceptance. If the employee declines your offer, you will be required to pay the salary for the remaining notice period to promptly implement your decision. The current lockdown situation does not change the legal position outlined above.

Yes, we have accepted his resignation and sent him an email about the acceptance of his resignation. In that email, we mentioned that his notice period will start from the specified date. On the other hand, we have written in the policy of our organization that the date of relieving is at the sole discretion of Management. The employee mentioned his last working day in the resignation email, which aligns with the defined notice period of the organization.

Request to clarify my above question considering these points.

Regards,

Vivek Kumar Singh

Dear Vivek, I think that you will have no hesitation in agreeing with me that in HR matters, starting from appointment to termination, situations have to be managed professionally. Professional management includes honoring contractual obligations. Your acceptance of the employee's resignation with the specific mention of the date of commencement of his notice period, as already stipulated in the contract of employment, cannot be unilaterally modified to his disadvantage because of any discretion vested in your policy statement. Your policy statement is not a legal instrument, whereas the particular contract of employment is a legal instrument under the Indian Contract Act, 1872.

Therefore, I have to reiterate my earlier opinion only.

Dear Vivek,

Your employee who resigned in the last week of February 2020 will have their services end in the last week of May 2020 as per the terms of their appointment. The employer may release the employee on the 17th of April before the end date in the last week of May 2020, but must pay them until the last week of May 2020.

Payment made only until the 17th of April is considered illegal because, according to the terms of the appointment, the employee's last working day should be the date in the last week of May.

There may be legal implications as the employee resigned before the lockdown and has already received compensation until May '20. However, paying the employee only until the 17th of April is illegal and could be seen as a violation of lockdown advisories.

Regards