Can a Company Force You to Serve a Notice Period Instead of Accepting Payment?

Dear All, I want to ask one question regarding the notice period. One of my friends is working in a company and has resigned from his services. As per the appointment letter, he either has to serve the notice period of 90 days or pay a notice pay payment. However, the company will decide what to take (either payment or service).

Now, my friend is ready to pay the notice period, but the company is not ready to accept money and is forcing him to serve the notice period. Is there any act or clause which deals with the notice period?

Regards, Amit Nikam

Hi, Notice period clauses are company-specific. At the time of entering an employment contract, both parties involved mutually agree to a separation clause. The same should be honored at the time of exit. Whether to accept the notice period or payment in lieu of notice period will be at the discretion of the employer based on the volume of work in hand. The wise way is to discuss with HR and try for some amicable way out.

Notice Period and HR Policy

There is no act that deals with the notice period, and it depends on the HR policy of the company. Depending on the merit of the case, some companies may waive the notice period. Company management officials shall be ready to provide any help, but how to present your case before them purely depends on your friend.

Notice Period and Legal Implications

In the absence of a notice period in the contract of employment or provision in the certified Standing Orders, asking an employee to serve a notice period or pay in lieu of notice is unfair. For employees covered by the Industrial Disputes Act, requiring them to serve a notice period or pay an equal amount is illegal. Under the ID Act, there is a provision that an employer should give notice or pay in lieu of notice to terminate an employee, but nowhere does it mention that an employee should give notice or pay in lieu of notice.

Hi, Since there is a notice period clause of 90 days, it's best to serve and get relieved on a positive note since the organization is not ready to relieve you early without recovery. Please check with your HR team if any relieving is possible with recovery. There can be many reasons why companies may not accept a buyout (role criticality/IP, lack of successor, poaching trend from competitors where the new organization is offering to reimburse the buyout, etc.). As mentioned, it's best to leave on a positive note. Thanks.

Hi Amit, In many jurisdictions, notice periods and related clauses are typically governed by employment contracts and local labor laws. It's important for your friend to review the terms of their employment contract carefully, as well as any applicable labor laws in their jurisdiction.

If the employment contract clearly states that the company has the discretion to choose between a notice period or notice pay, and they are insisting on the notice period, your friend may have limited options unless there is a specific violation of the employment contract or labor laws.

Steps to Consider

Review the Employment Contract: Your friend should carefully review their employment contract to understand the terms and conditions related to notice periods and notice pay.

Consult an Employment Lawyer: If your friend believes that the company is acting unfairly or in violation of the contract, they should consider consulting an employment lawyer. A lawyer can provide advice based on the specific details of their situation and the laws applicable in their jurisdiction.

Negotiate with the Company: Your friend may try to have an open and honest conversation with their employer about the situation. They can express their willingness to pay the notice pay and explain why serving the notice period might be challenging for them.

Document Everything: Your friend should keep records of all communications with the company regarding this matter. This includes emails, letters, or any other written correspondence.

File a Complaint: If your friend believes their rights are being violated, they may file a complaint with the relevant labor authority or a similar regulatory body in their jurisdiction.

Remember, it's crucial for your friend to consult with a legal professional who is knowledgeable about employment law in their specific jurisdiction. They can provide the most accurate and relevant advice based on the details of your friend's situation.

Thanks

On the basis of what you have written here, the employer is not the "Tridev" who will decide everything; hence, he can pay the notice period, and the company has no right to compel him to work. However, if you can share the appointment letter, it would be easier to provide a specific answer.