Confused About Notice Pay Recovery After Early Release? Seeking Advice on Next Steps

Hi, I joined an organization and within two weeks, I expressed my desire to resign citing personal reasons. After the discussion, my manager agreed to it. I expressed that I wanted to serve the notice period and work. He said onboarding employees are asked to leave early. However, he gave it a thought and, citing technical feasibility as a reason, asked me to opt for early release. All these conversations happened over a call. I did what was asked, then management asked me to take the resignation back and offered some perks.

I took back the resignation but told them I'll think about it as the reasons are personal in nature. My problems didn't improve and money was inconsequential in my decision, so I again submitted my resignation within a week of this event. Based on my previous discussion with the manager, I opted for early release.

My release date has passed, but now I've received an email for notice pay recovery. I emailed him, and he said he would ask management for approval of the waiver, but unfortunately, it was not granted. According to them, an early release doesn't mean a waiver of recovery. HR is now asking for the manager's approval to proceed.

Currently, he is not responding. I didn't have any responsibilities to hand over either as I just joined and have that in the email. What should I do?

Notice Pay Waiver After Early Release

As the situation stands now, you have resigned and sought early release, which has been accepted. This means that the notice pay is to be deposited. Having only served 2-3 weeks, citing your previous offer to serve the notice period as well as your compelling circumstances for leaving the job, you can attempt to have the notice pay waived. However, this would depend on the good judgment of the management.

Thanks, KK! As mentioned, management is not listening. Communicating with them is futile as they keep lying. I've experienced it twice and have it on email. I guess ethics should be followed by employees only, and employees are not human either. The problem is they have transferred the salary to me after all the deductions. I raised a query at that point as to why the money was transferred when I have resigned; they said they would settle it. Now, to pay it back, I'll need additional funds, which I don't have. Moreover, their notice pay is not on the basic pay but on a per-day salary basis. Thus, the amount is high. I wouldn't have had a problem paying it back if it were on the basic salary.

What if I don't pay it or pay it partially? As my exit will not be complete in either case since I won't have a relieving letter. Can there be any other repercussions? Does it have any impact on my EPF later on? What if I don't mention this company anywhere else? Due to Covid, we did not have any contract signing on hard copy. I am feeling harassed.

Notice Pay and Breach of Contract

You need to reply to the notice you received demanding notice pay. The specific provision in the contract of appointment needs to be reviewed to understand its implications. Since you mentioned that due to COVID there was no contract signing on a hard copy, the question remains on the validity of the contract itself. Subject to there being a valid contract, as you are not complying with the contract, it amounts to a breach of contract as per Section 39 of the Contract Act 1872. Section 73 lays down provisions regarding the compensation for loss or damage caused by the breach of the contract. It discusses the right of the party who suffers from the breach of a contract. Such a party can claim compensation from the party who did not perform their obligations under the contract. The loss caused to the party must arise naturally, i.e., in the usual course of things or must be known to the parties while contracting, to occur in the case of a breach. This section further states that compensation would not be provided for remote or indirect loss suffered by such a breach of contract.

So here, the natural loss caused to the party is only the salary paid to you. Since you are ready to pay back that amount, there should not be any problem in returning this amount.

Other Queries

As regards the other queries raised by you, the response is as follows:

Can there be any other repercussions?

Nothing specifically other than that the doors of this organization are closed for you.

Does it have any impact on my EPF later on?

Not likely. Have you got UAN? I presume you must have drawn a salary above the ceiling limit as per the PF Act. (> Rs. 15,000)

What if I don't mention this company anywhere else?

As this remains a very short duration assignment, it can be ignored.