Query on Recovery of Notice Period Shortfall and Overseas Allowance Deduction in Indian Company

Dear Members,

I recently resigned from my Indian company by serving a 2-month notice instead of the required 3 months as per my appointment letter. I was deputed to Africa 1 year and 1 month ago but joined the company 2 years and 10 months ago. I receive two components of salary during my deputation to Africa:

- Indian salary in my Indian account
- Overseas allowance in my foreign account

Please go through the attachment for the salary bifurcation.

The company is now saying they will recover the shortfall by deducting 1 month of basic salary (India) and 1 month of overseas special allowance.

Is it legally permissible for the company to deduct the overseas allowance as part of notice period recovery? The appointment letter mentions that the company can recover gross salary in case of a shortfall in the notice period.

Kindly guide.

Thanks in advance.

In this scenario, the legality of deducting the overseas allowance as part of the notice period recovery depends on the specific labor laws and company policies applicable in India. Generally, notice period recovery clauses in employment contracts should comply with the terms agreed upon by both parties. To address this issue effectively, consider the following steps:

1. Review Employment Contract: Carefully examine your employment contract, particularly the sections related to notice period, salary components, and any provisions regarding deductions in case of early resignation.

2. Seek Clarification: Request a meeting with the HR department or management to seek clarification on the deduction of the overseas allowance. Understand the rationale behind this decision and how it aligns with the terms of your contract.

3. Legal Consultation: If necessary, seek legal advice from a labor law expert to determine the legality of the company's action. They can provide insights into relevant laws and regulations governing notice period deductions and overseas allowances.

4. Negotiation: Based on the contract terms and legal advice, consider negotiating with the company regarding the deduction. Present your case professionally and seek a resolution that is fair and mutually acceptable.

5. Escalation: If discussions and negotiations do not yield a satisfactory outcome, consider escalating the matter through formal channels within the company or seeking assistance from relevant labor authorities.

Remember, it is essential to approach this situation with a clear understanding of your rights, the contractual obligations, and the applicable legal framework to ensure a fair resolution.