Can I Legally Buy Out Part of My Notice Period After Serving 45 Days? Seeking Advice

In my appointment letter, the termination clause is mentioned as below:

Clause

"After satisfactory completion of probation, the services will be liable to termination by a three-month notice on either side without assigning any reasons therefor; provided also that the Appointing Authority shall have the right to terminate the services of the appointee forthwith or from any subsequent date on payment of a sum equivalent to the amount of pay last drawn by the employee for the period of notice in lieu of the notice period or the period by which such notice falls short of."

I would like to serve a 45-day notice period and buy out the rest of the 45 days. However, my employer says that as per the clause mentioned above, there is no buyout option for the employee. He said only the employer can pay money in lieu of the shortfall notice period and can relieve you if he has decided. But I feel that the clause is applicable on either side. Please let me know the legal opinion on this. They are not accepting and saying I have to serve a 90-day notice period.

Dear Manohar,

In the first place, such a clause permitting the employer to terminate the employee even after confirmation by giving 3 months' notice or salary in lieu of notice without assigning any reason is arbitrary and against the principles of natural justice. In this context, you may refer to the judgment of the Apex Court in Central Inland Water Transport Corporation v Brojonath Ganguly [1986 SCR (2) 278].

Secondly, and very particularly with reference to the contract of employment that places the parties on equal footing in respect of their consequential rights and obligations under the contract, your employer's contention that the employee has no buyout option is not correct. The phrase "three months' notice on either side" clearly empowers both the employer and the employee to exercise the option of unilateral termination of the contract of employment subject to fulfillment of the notice clause already mentioned in either of the ways they like.

Dear Sir, Thank you for addressing my concern. I am very grateful to you in this regard. This favor is not only for me but also for my colleagues who are being harassed by our management.

Management Harassment Issues

My management is acting smart and harassing employees, thinking they have every right to do so at their will and treating employees as bonded laborers. I must mention that some employees are not being relieved even after serving 3 to 4 months of the notice period, and their best offers from other companies are getting canceled due to that.

Inconsistent Notice Period Policies

I also want to mention that they recently relieved one employee after serving a one-month notice period, for whom two months of basic salary was deducted for the shortfall in the notice period (the same clause is mentioned in his appointment letter). However, in my case, they are not considering my request to serve a 45-day notice period and the buyout option for the remaining 45 days. They have not acknowledged my resignation request for the last 20 days, even though I am approaching them daily. They have not assigned anyone to take over my job responsibilities despite repeated emails and requests.

My other job offer may be canceled due to this situation. Please advise me on how to handle this situation. I am certain that my polite requests are not effective in this company, as they are taking advantage of it.

I am eagerly anticipating your reply. Thank you so much.

Unfortunately, you have signed the terms of employment without reading or understanding them. In this case, the employer has the right to terminate the notice period early by giving salary for the remaining period. You do not have any such right.

That being said, you now need to speak to your new employer and ask them what solution would be acceptable for them. They may be willing to wait for 3 months, or they may be okay with you joining immediately without completing your notice period. In that case, you do not need to bother completing your notice period.

However, you need to remember that the world is often a small place. Leaving without notice means your future background verification would be affected. Furthermore, you may meet the same manager in future jobs, and he may ask the company to reject your candidature at that point.

If you are working for a software company, remember that they have a master skill index database in which they can report your leaving without notice, and you will be blacklisted for a future job with all client companies.

Hi, I would like to know if, after a three-month notice period, the company has the right to retain me without accepting my resignation. I have heard from some of my colleagues that they are attempting to keep me on even after three months without acknowledging my resignation. If my resignation is not accepted, can I complete the three-month notice period and then leave the company directly to join another company, if they are willing to hire me? Can I legally demand my relieving letter and final settlements after the three months?

I would appreciate a detailed clarification on the above aspects. I should also note that another company is prepared to hire me after a 45-day notice period at my current company, regardless of whether my resignation is accepted by management. They cannot wait longer than that as they have an urgent need.

Please guide me on what steps to take as I am feeling very confused.

Legal Requirements for Resignation

Legally, acceptance of resignation is not a requirement for you to leave. The employer cannot force an employee to work if he does not want to work. What is legally required is that you must complete the terms of your contract, which in this case, is a 3-month notice period. The notice period starts from the date of delivery of the notice and not the date of acceptance.

So after 3 months, you can leave and join elsewhere; you will be legally entitled to a relieving letter and F&F. However, as I have said before on this forum, enforcing a legal right in India through legal action is a very long and time-consuming exercise. In fact, it is an expensive exercise as well. If your new company is willing to take you without completing your notice period, I suggest you leave.

However, you need to keep proof that you have delivered your resignation and followed up enough times for a handover.

Dear Sir,

Kindly clarify the following two queries for me.

Consequences of Serving a 45-Day Notice Period Without a Relieving Letter

1. What could be the possible consequences from my previous employer if my new employer has asked me to start after serving a 45-day notice period, even though I haven't received my relieving letter? What rights would my previous employer have in this case, based on the appointed terms, if I serve the 45-day notice period and opt to buy out the remaining 45 days? Can I be entitled to my final settlements and an experience certificate from my previous employer in this scenario?

Request for Release After a 45-Day Notice Period

2. Is there any way I can insist that my current employer release me after the 45-day notice period? I have sent 3 to 4 emails explaining my personal circumstances and the demanding home situations that prevent me from working beyond 45 days in this organization. I want to be relieved after completing the 45 days and am willing to pay for the remaining 45 days. I had assured them that I would hand over my job responsibilities in 45 days and assist in a smooth transition. However, there has been no response from them so far. They are insistent that I must serve a 90-day notice period, which is not feasible for me. Is there any way I can compel them to release me after 45 days and accept the buyout option for the remaining 45 days?

Thank you.

From what you have told us so far,

Legal implications of buyout refusal

Legally, you cannot force them to accept your buyout. Therefore, there is no way for you to force them to give you a relieving letter either. But if your new employer does not care about it, then it does not really matter (though future employers may ask why you did not get a relieving letter).

Possible company actions

What is more likely to happen is that the company will withhold your salary and consider it as a penalty for your absconding. It will mark you as absconding and process your separation. It is unlikely to take legal action against you, though it has the right to do so. If legal action is taken, the court is also unlikely to order you to work for 45 days more, but may impose a penalty, which should be similar to the buyout.

Consulting a legal advisor

However, you need to consult your legal advisor because with the limited information we have, none of us can predict the legal outcome correctly. In any case, we do not know the company, their attitude, or their relationship with you, so we are only guessing what their reaction will be.

As I mentioned earlier, they recently relieved an employee after serving a one-month notice period, during which two months of basic salary were deducted for the shortfall notice period. The same clause is mentioned in his appointment letter. In what way could they have relieved him if the buyout option is not there? I see that the way the clause is written, it is applicable on either side, but my management is saying it is not applicable on either side.

No, the wording of the terms specified is one-sided. They only have the right to terminate with immediate effect or with a shorter notice period as long as they pay the notice period salary. There is no automatic equivalent right for you just because they have it for themselves.

Even if they have accepted a shorter period for someone else, that does not mean they are forced to do it for you also. Similarly, a decision not to enforce a particular right is not a waiver of the right, and it can be enforced later or for a different incident.