Can My Company Deny Cooling-Off Period Pay After I Resigned During Probation?

Dear All, Please advise on the following:

I have joined a company and resigned during the probation period as per the terms of the contract. According to the appointment letter, the company paid me a joining bonus of Rs. 2 Lac, which is refundable to the company if I leave the job before completing one year.

Cooling-off period clause

There is another clause in the appointment letter regarding a cooling-off period as follows:

"If at any time you are relieved of your services by the company or you tender your resignation, then you shall refrain from joining a competitor firm or starting your own business affairs, competing with the company in any nature whatsoever, for a period of three months commencing on the date of termination of employment or acceptance of resignation. The company shall compensate you by providing three months' salary in lieu of the cooling-off period."

I understand that the bonus is refundable to the company as I left the company before completing one year. However, I am of the opinion that the company should pay the three-month salary as per the above term since they are preventing me from joining a competitor firm or starting my own business affairs, competing with the company in any nature whatsoever.

However, the company has denied the compensation, mentioning that the compensation in lieu of the cooling-off period is given solely at the discretion of the company for those employees who have been in employment for a reasonable period of time and definitely not for someone who is on probation and has left the company within three months.

I seek your advice on the cooling-off period compensation. Is the company legally bound to pay the cooling-off period compensation? Kindly advise.

Hi Mahendra - Dohale, If I understood your post correctly, it appears you submitted your resignation during your probation period. However, there is no clarity regarding the notice period in your post.

From the succeeding paragraph, it seems your company has a 3-month notice period. Again, your post is not clear whether you were willing to serve the full notice period of 3 months and your employer relieved you before the end of the 3-month notice period.

Hence, you may provide the following details to give an appropriate reply:

1. Your date of joining the organization.
2. Your date of resignation from the organization.
3. The notice period applicable to you as per the terms of employment.
4. Were you willing to serve the full notice period? If so, when does your notice period end?
5. Did the employer relieve you from services, or did you quit employment, or did your employer terminate your services before the end of the notice period, even though you were willing to serve the full notice period?
6. When did you actually quit the job?

Answering these queries will help us offer opinions, suggestions, or responses.

Regards,

MVK