Employee Resignation Without Notice: Is Recovery Based on Basic or Full Salary?

Hi everyone.

On the resignation of an employee without a notice period, what is the basis on which the recovery is calculated? Is it at the rate of basic salary or the complete salary for the month?

Thanks,
Vrush

It all depends on company policy. However, to ascertain the monetary value of recovery in case of non-submission of resignation, the simple way out is to check how you pay the notice pay to employees. If you have not come across such an instance of paying the notice period, then you can either adopt the principle of deducting and paying on Basic (i.e., basic plus DA or VDA) or on gross salary (i.e., what you pay on the salary slip; basic salary inclusive of all allowances and not reimbursements).

Though it depends on the company policy, normally the recovery is calculated on the basis of basic + DA for the unserved notice period.

Sushant.

Dear friend,

It purely depends on the company's policy or procedure. In some companies, they will deduct from Basic and DA, and in others, they will deduct it from the gross. However, in the majority of companies, even if they don't have a specific policy on this, the procedure is to deduct it from basic and DA.

Regards,
Martin

Dear Vrush,

One thing that has already been clarified is that you need to have a policy for basic and DA or gross, whether you want to give notice pay to somebody or deduct it from somebody.

Secondly, I would like to point out that you should refer to the terms and conditions mentioned in the appointment letter regarding whether "gross salary," "basic salary," or only "salary" should be deducted or given after the probation period has expired.

Regards, Dabas

Please consider an employee's leave account and make the necessary adjustments with the notice period before you calculate any monetary benefits.

Some companies have even asked an employee to repay dues to the company if the employee insists on leaving before the notice period is completed. This is usually done at the discretion of the management. In such cases, an employee does not challenge the company's decision, though there is no clause in the Appointment letter to allow the company to collect such dues. This may be an interesting issue to discuss in this forum. Let the discussion begin!

Normally, that is not a good practice to do. Yes, I have also encountered such instances where the employer insisted on depositing the money reimbursed for transportation, travel tickets, etc. I think that is where an understanding has to be clear from the beginning to avoid such shocking news to an employee who is separating by not giving proper notice period. That is all a company wants – its reputation to be created... the best employer image or the best place to work or...?

More so, it depends on the HR person in charge to advise the management in the right direction rather than taking unnecessary pains and rubbing their shoulders around.

Manoj