Facing Legal Threats Over Notice Period: How Should I Handle This Situation?

I was working with a company for the last 1.5 months, and then, due to my personal issues, I decided to leave. I sent a resignation via email and requested that the same day be considered my last working day. Subsequently, they disabled all my official accounts and assets. After a few days, they contacted me and stated that I must pay for not serving the notice period as outlined in my offer letter. The letter specifies that in the event of less than 60 days' notice, one must pay a one-month base salary in lieu of the notice period upon confirmation of service. However, they are now asserting that according to company policy, I am required to pay two months' Cost to Company (CTC). They have also threatened legal action if I fail to comply, including informing my future HR. What steps should I take? Your assistance is appreciated.

Thank you for your quick response. However, I do not have the appointment letter, perhaps because I am still in my probation period. I do possess the offer letter, but I am unable to share it at this time. Could you please suggest the necessary steps for me to check and confirm the details?

Thank you.

Addressing Notice Period Discrepancies

It looks like they are trying to frighten you. You mentioned that the offer letter states you have to pay one month's base salary if found to be short on the notice period. Therefore, you should strongly refute the suggestion of paying two months' CTC amount. The CTC claim is totally invalid as the company is not going to spend any money after you leave them, so it is entirely preposterous. Give them a strong reply pointing out the above.

Thank you for the reply. However, they are saying that it is mentioned in the employee handbook of the company, and it is your responsibility to stay updated. I haven't received any email regarding such a policy change.

Dear Umakant ji, with due respect, sir, I wish to say that any company, when deploying a person in an organization, spends a good amount of time and money. The first month is typically an induction period where the employee is just understanding the organization and may not be giving any output initially. If an employee states that they are leaving the organization because they have found a better opportunity elsewhere, the company will need to repeat the hiring process to find and onboard a new person. This whole process involves both money and time.

Why do employers often seem to be on the wrong side?

What is your opinion on this? Why is it that employers often seem to be on the wrong side while the employee is viewed as right?

Regards

Dear Colleagues,

Employment decisions and commitments

Employment is a serious business, and one must make well-thought-out considerations before taking up a job. If something is not appealing, then he or she should not accept that offer and join the organization. The organization invests money, time, and energy in searching, selecting, and onboarding talent for their business, which is a crucial aspect from the employer's perspective. Both parties are responsible for honoring their commitments. The employer must provide a positive working environment and uphold any commitments made during the recruitment process. The employee, or talent, should commit to serving for a minimum period, in my opinion, at least one year to understand the role before deciding whether to continue or resign. It is not fair to judge a job within a month and then decide to leave, as this can seriously disrupt the business. One must consider this aspect when taking up any new employment opportunity—make a thoughtful decision, seek advice, evaluate, and then make a choice.

Handling employee resignation

On the other hand, when an employee is no longer interested in continuing with an organization, the employer should not resort to punitive actions such as sending notices or demanding a large sum of money in the name of notice period wages. This scenario happens frequently, and internally, the organization needs to investigate and determine why the employee chose to leave so abruptly. This is a critical issue for managers to analyze and take corrective measures to prevent a high turnover rate. It is advisable to have a pool of potential talents ready to fill vacant positions promptly to ensure business continuity.

In the current situation, the employee cannot be compelled to pay the "CTC" for specific months unless explicitly stated in the appointment order and agreed upon by the employee.

All the Best, God Bless
Dr. P. Sivakumar
Doctor Siva Global HR
Tamil Nadu

Dear Indu,

Yours is a very pertinent question focusing on the genuine difficulties experienced by employers at times due to the job-hopping done by certain indecisive employees. Therefore, there can be no generalization putting the blame entirely either on the employer or on the employee concerned. A situational perspective, coupled with the aspects of legal compliance and feasibility of performance, has to be adopted on a case-by-case basis. In fact, the various case laws in India so far on the subject matter of employment agreements requiring employees to serve a certain predetermined number of years in the establishment after induction, failing which to pay liquidated damages to the affected employer, are based on this principle.

Employment is always at will only.

One of the reasons for fixing the period of probation in the contract of employment emanates from this universally accepted concept, notwithstanding the nature of parameters associated with it. If the employee falls short of the expectations and assessment of the employer in terms of behavior and performance during the probation period, the employer can terminate his services without assigning any reason, with or without notice, as per the unilateral exit clause which is called "discharge simpliciter," that is devoid of any stigma. Such an equal right is given to the probationer too if he is not satisfied with the work culture of the organization, or career prospects, or even the later availability of a far better offer from elsewhere, or any other compelling personal reasons.

The objective of an employment agreement imposing a compulsory service period

The objective of an employment agreement imposing a compulsory service period after confirmation and the levy of a penalty in case of breach by the employee is only to discourage the tendency to switch jobs after acquiring sufficient experience. However, the quantum of damages should be reasonable, i.e., commensurate with the cost of recruitment and the cost of time, energy, and money spent on imparting training to the employee. That's why such employment agreements are held to be enforceable, subject to the reasonableness of the terms and conditions, as there can be no lifetime contracts of employment.

At the same time, Indu, you will agree with me that if the recruitment process is effective, one will get the right employee who will stay long. If the intent is employee retention for a considerably longer duration, the employer should devise his employee retention policy in such a way that trained employees do not leave their jobs for the sake of temporary monetary benefits.

Since Dr. Sivakumar has explained the unfair tactics actually adopted by both some employers and employees in this matter, I avoid going further in this regard.

If the reasons for exit are genuine, both the employer and the employee should be prepared to fulfill the exit conditions and strive to make the separation formal, friendly, and peaceful by making mutual adjustments. What's the guarantee - the same employee may come back to you in the future, or you may require his services once again for a higher position.

Many thanks for sharing your experience. We have now agreed upon one month's base pay, and then they will release an official email stating my relieving.

Which mode of payment would be better in this case?