Navigating Notice Period Confusion: Do Employees Paying Recovery Still Need to Complete Handover?

Hi Seniors,

I have been working with a company for the last 3 years, where a lot of confusion arises during the separation of employees.

As per the appointment letter, the notice period is 2 months. If an employee fails to serve the notice period, he/she has to pay the notice period recovery amount (which is a common policy followed by most companies).

Current Issues with Notice Period and Exit Formalities

I am currently facing contradictory points which are causing issues:

1) The management of this organization has asked me to calculate the notice period from the date of accepting the resignation.
2) They are instructing me not to initiate the exit formalities of the outgoing employee until a new replacement arrives.

Questions on Notice Period and Recovery Amount

1) If an employee is willing to pay the notice period recovery amount, are they still required to complete handover formalities?
2) If the employee pays the recovery amount, does it affect whether their notice period will be accepted or not? Do they still have the right to receive their relieving and experience letter?

Currently, they have requested me to amend the appointment letter to state that the notice period will be calculated from the date of acceptance. I have asked them to provide me with email communication as I am not the policymaker. Can you please suggest any alternative solutions to help me avoid this situation?

The topic is "Queries related to Employee Separation Process." Thank you for the input. Let's dive into discussing queries related to the employee separation process. If you have any specific questions or concerns in mind, feel free to share them for further discussion.

There is no rule or law that states the employee needs to wait until you accept the resignation. Once they give the resignation, the notice period specified in the appointment letter, or the standing orders (if applicable), will apply.

Even if the employee is willing to pay the notice pay, they will still need to provide a reasonable handover. However, it will not apply after the notice period is over. Furthermore, the amount of time taken for the handover will count as working time, and they do not have to make a notice period payment for that period.

I doubt if you are capable of explaining this to the management, but the fact is that the company does not have the right to dictate this and override law and common sense. Try putting it into your standing orders and see if the labor commissioner allows it.

Your queries are clarified below:

Acceptance of resignation

Acceptance of resignation is an internal process of the management of the firm, and the resigning employee has no role to play in it. There is no time limit set for it; for instance, if the resignation is accepted after 6-9 months, it is unreasonable and illogical to expect the employee to hang around ever expectantly. Moreover, once the employee has clearly expressed his/her intention to leave the service, is it just and proper to drag the retention of service indefinitely?

Notice period decision

The employer/management has to make a decision on whether the notice period is to be accepted or if actual service during the notice period is to be insisted upon; it cannot be both. Once the employee has completed the notice period requirement, then the employee has the right to receive his relieving and experience letter.

My reply is as below:

1) If the employee is ready to pay the notice period recovery amount, is he/she liable to do the handover formalities?

"Handover and notice period are both different, so the payment/recovery of the notice period is a requirement of the law (appointment letter). However, the handover process is a normal procedure for transferring work responsibilities."

2) If the employee pays the recovery amount, does it really matter whether his/her notice period will be accepted or not? Does the employee still have the right to receive his relieving and experience letter?

"In the case of resignation or termination, the notice pay recovery or notice pay follows the rules stated in the appointment letter/contract. Therefore, if you accept the employee's notice period or recover the notice pay, it clearly signifies acceptance of the mentioned terms. Furthermore, the issuance of a relieving letter indicates the conclusion of the relationship between the employee and employer from the relieving date. Providing the relieving letter is crucial to prevent any future misunderstandings."

Now, they are asking me to revise the appointment letter to include a clause stating that the notice period will be calculated from the date of acceptance.

"Is it not possible for the resigned person?"

I have requested them to send me an email communication as I am not the policy maker. Can you please suggest any alternative solutions to avoid such situations? Always adhere to the rules in an honest manner.

Here is my reply to your queries:

Handover formalities and notice period recovery

1) If the employee is ready to pay the notice period recovery amount, is he/she liable to do the handover formalities?
Ans: Handover is a normal process and must be done by the employee, regardless of whether they are paying or serving the notice period.

Acceptance of notice period and issuance of letters

2) If the employee pays the recovery amount, does it really matter whether his/her notice period will get accepted or not? Does the employee still have the right to get their relieving and experience letter?
Ans: Acceptance of the notice period or resignation is not legally required if the recovery amount is paid. The employee is eligible for relieving and experience letters in this case.

Appointment letter clause revision

Now they are asking me to revise the appointment letter with the clause where I need to mention that the notice period will be calculated from the date of acceptance.
Ans: Your management is asking for an illegal clause to be put in the appointment letter. The notice period has to be served from the date of resignation.

I asked them to send me an email communication as I am not the policymaker. Can you please suggest if there are any alternate solutions where I can really avoid this situation?
Ans: You can only suggest following best practices and avoiding illegal actions. Wish you all the best!

Dear Team Members,

Reference is made to the Resignation/Separation Procedure:

[I. Advance Notice Required][/B]

A staff member who resigns must inform the Company in writing of their decision at least one month before the effective date of resignation. Workers and operators on the production line who resign must inform the Company either orally or in writing at least one week before the effective date of resignation.

II. Personnel Action Form

The HR Department will prepare the Personnel Action Form for the resigning employees' department upon receiving formal advance notice from HR through the department manager. The resignation is not considered effective until the Personnel Action Form is approved by the General Manager.

III. Cessation of Accrued Benefits

No benefits will continue to accrue after the effective date of separation. Therefore, any period of advance notice or accrued leave beyond the separation date cannot be used for benefits accrual, such as additional earned leave, insurance claims (through the Company), discounted travel fares, festival gifts, bonuses, salary increases, or allowances.

IV. Separation Clearance

The HR Department will create a Clearance Slip in original copy only, indicating the offices that must clear the employee in the separation process. The Clearance Slip may be hand-carried to each office by the employee or a department colleague. It is mandatory for the Clearance Slip to include the following offices: HR, Finance, Tool Crib, Documentation Center, Warehouse, Instrumentation Lab, Training Center, Security, Union Office, EWA (Employees Welfare Administration), and the employee's department.

V. Release Certification

An employee who is separated from the Company will receive a standard Release Certificate detailing their service with the Company. A resigning employee who fails to complete the Clearance Slip properly will not receive the release certification.

VI. Exit Interview

The HR Manager/Supervisor will conduct an exit interview with the separated employee to discuss their experience with the Company for potential re-hire consideration. The interview report will be filed in the employee's record. The exit interview process can provide valuable suggestions for future improvement.

Best regards to you all,
John Chiang

Handling Employee Separation Processes

Dealing with the employee separation process in most organizations can be complicated. This is often due to non-professional employees as well as non-professional employers. According to PNJ, it should be clearly stated in the appointment letter that either party may terminate the job by giving a notice period or opting for a financial settlement.

In a well-run professional organization with a good organizational culture, when an employee submits their resignation, there is open communication between management and the employee to facilitate a smooth separation process. In some cases, employees may even decide to continue in their roles, depending on factors such as their level within the organization, the communication system in place, and the policies of the organization.

There are instances where employees submit their resignation and abruptly cease coming to work the next day. Some may comply with the notice period requirements, while others do not. In such cases, the employer may withhold Full and Final settlement, delay issuing relieving letters, among other actions, but this often leads to prolonged issues.

In my view, the date of resignation should be based on when the employee formally resigns, not on when the employer accepts it. When faced with a high number of resignations within an organization, management should investigate the underlying reasons instead of solely focusing on refining the separation procedures, which may not address the core issues.

I have encountered both irregular employees and employers. For irregular employees, appropriate actions may be taken by management, provided it is done fairly and not out of spite. As for irregular employers, who are also prevalent and fail to handle the separation process effectively by completing Full and Final settlements properly, issuing relieving letters, etc., my personal suggestion is that they should adopt a more professional approach and reconsider their perspectives.

Regards, S K Bandyopadhyay (WB, Howrah) CEO - USD HR Solutions [Phone Number Removed For Privacy-Reasons] [Email Removed For Privacy Reasons] www.usdhrs.in