Facing Salary Cuts and Unfair Notice Period Demands During COVID-19: What Should I Do?

Salary and Notice Period Issues During COVID-19

The company is not paying salaries according to the appointment letter and salary revision letter since the lockdown. Almost 2.25 lakh has been deducted from an 8 lakh CTC in just 9 months, and this continues. The company has not provided any clarity or information regarding this matter. They have only orally communicated changes in working days per week (4 days, 5 days according to management's mindset). Despite healthy sales and profits this year, the company seems to be taking advantage of the COVID situation. The plant is operating as usual, paying wages, but deductions are being made from office staff such as accounts, purchase, and HR.

Notice Period Change and Resignation

In my appointment letter, the notice period was stated as 1 month, but after joining, it was forcefully changed to 3 months for all assistant manager-level positions. I objected to this change but was given the ultimatum to either accept a 90-day notice period or leave the company. With no other choice, I accepted the 90-day notice period.

After a few months, the lockdown began, and salary deductions commenced, which have persisted until now. Subsequently, I found another job with a full salary and tendered my resignation, requesting an early release. However, after 20 days of no response, I was asked to serve the notice period as per the revised 90-day policy. Feeling unfairly treated, I left immediately, stopped attending the company, and returned all assets. The company is now demanding a notice pay of 70 days.

Seeking Advice on Notice Pay Demand

My question is, if the company is not adhering to the salary terms outlined in the appointment letter upon which I accepted the job, how can they demand a notice pay of 90 days? This situation amounts to serious harassment of the employee.

I seek expert advice on this matter.

Interesting question.

Prima facie, if one party has violated the terms of the contract (in this case, the promised salary and increment), then there is no obligation for the other party to obey the terms of the contract either. However, since we do not know the circumstances, we cannot tell you where exactly you stand. For example, we do not know if they have given you notice of lower pay, whether you have in any form accepted the same, or to what extent the continuing acceptance of pay cuts amounts to acceptance of the changed contract.

You can always reply to the company stating that you do not need to follow the notice period since the payment was cut without your approval, or you can tell them that they owe you xxx amount of money which they have not paid and that you are entitled to file a legal case to recover the same and therefore you will not pay them, etc.

But it would be a good idea to take the case to a labor lawyer who can advise you based on the full knowledge of the matter.

It is also a question of how your new employer looks at the matter and whether they believe that you are justified in leaving without adequate notice. If they are okay with it, then I guess you should not have much of a problem.

Companies rarely find it worthwhile to spend on legal fees to follow up on cases of short notice periods.

Dear Friend,

I understand your problem, and you are not alone in suffering from this kind of situation. It would be prudent on your part to come out of this whirlpool for a better future. One positive aspect is that your employer has agreed to a buyout option for the remaining notice period. You can discuss the issue with HR. If that is not possible, send a letter to HR stating that the notice period of 70 days equates to Rs. X on a pro-rata basis of the salary received against the actual amount to be received, to be paid by cheque. It would be advisable to send the notice through a lawyer if you have this option available.

You have a valid reason for a legal fight, but try to settle it through a discussion sitting across the table. Keep a recording of the discussion as getting a new job is a priority for you. You should also discuss with the HR of the new employer whether they are willing to accept the letter from the previous employer with a 70-day payout but without a relieving letter. Make your decision after considering the advice of other well-wishers and act accordingly.