Employee Resigned Right After Appraisal: Are There Legal Consequences for Salary Claims?

One of our employees has submitted his resignation just two days after receiving the appraisal. The appraisal is effective from September 2020. He tendered his resignation on the 22nd of September 2020 and signed his acceptance of the appraisal letter on the 18th of September 2020. Now, he is requesting the increased salary as he has already accepted the offer. Please advise on any potential legal repercussions in this situation.

When one reads the post, on the surface, it can be concluded that performance appraisal and separation from the company are two independent things. The former is for measuring employee performance in the past performance cycle, whereas the latter is his basic choice on how long one will serve in a particular company. If the employee finds his interests lie outside the company, then where is the problem? As long as the employee serves the notice period as per the notice period, everything is fine.

Your question is on the legal repercussions of separation after the performance appraisal. However, it should be noted that performance appraisal and resignation are internal matters of the company. Labor laws do not deal with the internal matters of any company.

Nevertheless, if one reads between the lines of your post, one feels a grouse that you might have on the resignation of the employee after the salary hike. Is this the real reason for your post?

Thanks,
Dinesh Divekar

I fully endorse the observations of Mr. Dinesh. Performance appraisal is an objective and periodic exercise by the employer to assess the past performance of the employee to grant a pay hike. On the other hand, resignation is the subjective decision of the employee to quit for their betterment. What is important is whether the resignation fulfills the predetermined exit clause of the contract of employment. When to resign, subject to the exit clause, is an exclusive choice of the employee concerned. If an employee resigns soon after getting a hike, it is not going to adversely affect the present employer but can enable the employee to have an edge in salary negotiations for a future job if it is one of the reasons for resignation. There are no questions of legality or ethics involved in such an action.

If the present employer prefers retention, they can offer a higher position with a higher compensation package. In fact, it will create legal and ethical issues only if the employer refuses to effect the pay hike agreed upon in the appraisal due to the resignation following the appraisal.

Whether there are repercussions or not depends on the terms and conditions of the appraisal and/or the employer's policies. If you want a specific reply, you can share your policies/terms of appraisal. The language used therein will have to be interpreted.

There won't be any legal repercussions on company management in awarding an increment to your employee, even if he submits his resignation. Performance appraisal is based on his past service of one year or six months (as per your company's policy), and therefore, he is entitled to receive the incremental salary hike.