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Hi,

This may be a repeated question, and if it is, I request you to please point me in the direction of the answer!

My question is: Say an employee resigns from the services of the organization on 1st February and having a 2-month notice period, agrees to be relieved on 1st April after giving the appropriate handover. If the organization feels that the employee can finish the handover activities by 15th February and asks the employee to leave to join his/her new job - is the organization liable to pay for the remaining notice period to the employee?

I would like to know if there is any legal aspect to this and if the organization has to pay while the employee joins another company, could it be seen as "dual employment"?

Please advise.

Thank you.

From India, Mumbai
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Hi Generally if u cmplete handover process, and company offers u exit letter.. then give u no dues slip which itself is clear that company have no liability to pay for rest period.......
From India
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pca
1446

Terms of appointment of an employee are enforceable under the Contract Act. If the company wants to relieve the employee before 2 months, it will have to give notice pay for the remaining period. Full and final payment (including notice pay) is made to the employee on the date of relieving him, and hence there is no question of double employment in this case.
From India, Malappuram
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SC
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Generally, the notice period is served to hand over the responsibilities and ensure that the absence of this employee will not impact the business. If the management feels that relieving this employee earlier will not affect the business, then the management can relieve him within 15 days or earlier. We need not pay him for the remaining notice period days. The notice period waiver details should be clearly communicated to the employee while accepting the resignation itself. The last working day details should be intimated to the employee.

As the notice period is waived off by the management, we should not deduct any notice period recovery amount from his F&F.

From India, Bangalore
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hi all, Can employer deduct notice period if there is no appointment letter given? Manish Gupta
From India, Mumbai
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My dear friend, the company is liable to pay the remaining notice period. Why? Now, just tell me, if the company wants to relieve one person without giving any notice period, what will the company do? The company will pay the salary of the notice period... Am I right?

Now, in your case, the employee has given a resignation with a two-month notice, and the company has accepted it? And after 15-20 days, if the company does not continue with that person, don't you think the same situation has occurred as mentioned above? It is a type of agreement where one has offered something and the other has accepted it, and once that procedure is completed, it binds both parties.

Let's assume if that person talks about leaving the company after giving a notice of two months in just 20 days, then what will your company do? No, never.

It is indeed a good question, Chanchal. For those who only think about the company, congratulations, your increment will be on the way. But friends, think, what if you were in that position? You promised a new joining after two months, the old company is letting you go in 15 days. If the new company doesn't take you before two months, how will you survive financially for that 1.5 months or 1 month without pay, friends? Before saying anything, you should put yourself in that position and think.

What do you say, my friend Chanchal?

From India, Bombay
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you are just a puppet in hand of company , forget about company paying for your non working days
From India, Gurgaon
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QUESTION— As per the terms of service, a notice period of 2 months or salary in lieu of the same is necessary when a job is terminated or resigned. The employee gives notice on 1st February to be relieved on 1st April to join a new company on 1st April. The company asks him to leave on 15th February, and the employee agrees and joins the new company on 15th February.

Can the employee sue the company to get one and a half months' salary?

ANSWER— No. The court will deem it as dual employment, which is not permissible. Even otherwise, once the employee decides to leave earlier than the expiry of the full notice period, he would be legally deemed to have withdrawn his two months' notice and replaced it with a 15 days' notice, for which he is liable to pay one and a half months' salary, but the same is waived by mutual consent. One cannot eat the cake and have it too.

-- M C Gupta
MD (Medicine), LL.M.
Ex-Professor
Practising advocate
25 January 2010
mcgupta44@gmail.com

From United States, Sunnyvale
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I think it's a very common practice if an employee needs to leave during the notice period, they may leave the remaining days with notice period pay because the employer wants them to serve until the notice period ends. If the employer wants the employee to leave early while on the notice period, they may give full pay for the notice period as the employee wants to serve until the end of the notice period. The only difference is to leave the remaining days' pay if the employee wants to leave during the notice period, but the company is liable to pay. The rest of the conditions shall be governed as per the country's labor laws.

Regards, Furqan SAEED Karachi, Pakistan.

From Pakistan, Karachi
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Any exit formalities must be in line with the terms of employment. If an employee gives the resignation stating "on or before the specified date (which must align with the notice period as per terms of employment)", or "as early as possible", then neither the employee nor the employer are liable for any notice period compensation.

In the event that the date is specified as "on the specified date", and the employer wishes to release the employee early, the employer is required to provide compensation. If the employee agrees to be relieved without compensation, it should be clearly stated in the full and final settlement letter/statement to avoid any legal issues at a later date.

From India, Bangalore
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Dear Chanchal,

You can search CiteHR by using the Search tools on top of the page for previous discussions on this issue. For your convenience, I am providing the link for the search query:

https://www.citehr.com/results.html?...%23usercptools

A company that treats its employees fairly will not take undue advantage of the notice given by its employee by terminating his services much earlier than the Notice Period and deny him salary for the subsequent period culminating on the effective date of separation.

If circumstances so warrant, a company may dispense with the services of the employee prior to the last day of notice and shall pay him compensation in lieu of notice.

In such a case, the employee is at liberty to join elsewhere. Please note that the question of Dual Employment does not arise here as the employee stands relieved.

Moreover, what he gets is NOT "salary" for any duty performed; BUT "compensation" in lieu of notice. By no stretch of imagination can it be deduced that the employee is guilty of Dual Employment.

I hope the above has been of help to you. Do feel free to seek further clarifications if you need to.

Warm regards.

From India, Delhi
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Mr. Chanchal,

Your question is very valid. As per the company rules, it is two months for both parties. If the outgoing employee is ready to leave early, then it is a win-win situation for both, i.e., the employer is ready to relieve early after completing the required formalities, and the employee is also ready to get relieved and join early in the new organization where the new employer has no issue in inducting the employee early than the actual date of joining. Otherwise, the employee has every right to continue as per the laid-down rules, and the organization should allow him to work till the end of his notice period.

In general, if the company and the employee accept it, it is a win-win situation. Normally, the company feels that once an employee puts up his papers and is able to be replaced, they will opt for the outgoing employee to leave at the earliest. However, it should not be at the cost of the employee (i.e., the employee may not be able to earn the salary for the rest of the period).

With best regards - Kameswarao

From India, Hyderabad
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Dear Chanchal,

In simple terms, the notice period is binding equally on the employee and the employer as well. The employer is not exempt from violating any legal conditions of the agreement and does not enjoy arbitrary power not to abide by the agreement conditions.

Here, the employee has given notice of 2 months in terms of the company regulations and the conditions of a legal contract in the shape of a mutual agreement. If the company wants to relieve the employee before the expiry of the notice period, the company is doing so for its own convenience and not as a favor to the employee. The company is legally bound to pay proportionately the compensation to the employee for the period that falls short of the notice period.

Suppose the employee has already conveyed his intention to the new employer to join after a 2 months' period in compliance with the company's rules and regulations, and if the company discharges him after 15 days without paying any compensation, the employee would remain unemployed for one and a half months with no fault of his own, but on account of a violation of its own rules by the company. He can legally sue the company for compensation, including the cost of the lawsuit that can cause a loss of image for the company besides bearing additional costs and the rigor of the legal formalities.

Even, as a matter of common sense, had the employee asked the company to discharge him before the expiry of the notice period, the company would not have exempted him from paying the proportionate amount equal to the period short of the notice period. Similarly, the company is also liable to pay compensation to its employee if it discharges him before the notice period.

PS Dhingra
Transformation & Vigilance Management Consultant
Dhingra Consultancy Group
New Delhi
[dcgroup1962@gmail.com]

From India, Delhi
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While endorsing the views of Mr. Giri, I would like to add that if an employee wishes to continue or demands pay in lieu of the notice period, management has to pay or allow him to work until the expiry of the notice period.

Regards,
agdesai

From India, Madras
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An employee resigns from the services of a company since he has found a better job. As per the terms of his appointment letter, he is obliged to give the company two months' notice, at the end of which he will be relieved.

It is abundantly clear that the employee is willing to work for two months and has also complied with the terms of his employment by giving two months' notice. It is the employer company that has decided to cut short the notice given by the employee and relieve him earlier.

Under these circumstances, the company is obliged to pay the salary in lieu of the balance notice period.

Let's consider the flip side.

The employee, under the above circumstances, gives the company only 15 days' notice and expresses his desire to leave at the end of the 15 days' notice.

You can bet that the employer company will most certainly ask the employee to pay the salary in lieu of the shortfall in the notice period and adjust the corresponding amount in his Full & Final Settlement.

The right answer to the query is that the employer company is obliged to pay the salary for the balance notice period.

Vasant Nair
HR Advisor

From India, Mumbai
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From India, Delhi
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Dear Manish,

Until and unless there is a formal appointment letter and a legally entered into agreement between an employer and employee, the company does not have any legal right to deduct any notice period pay. When there is no existence of any notice period in the company's records, the question of the notice period does not arise at all.

If the company has deducted any such notice period pay from the employee's salary, he can take recourse to legal action against the company to ask for the deducted amount.

PS Dhingra
Transformation & Vigilance Management Consultant
Dhingra Consultancy Group
New Delhi
[dcgroup1962@gmail.com]

From India, Delhi
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From India, Delhi
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Dear Mr. Dhingra,

Excellent suggestion and guidance for a few members who are sending messages just for the sake of answering, similar to how we do on social chat sites. It's important that one should only answer things when they have really practiced or have knowledge about the same and make this blog a guide for all HR practices, especially on legal matters.

The question has really opened an issue that is being practiced by many companies in India with their vested interests. The Commissioner of Labor has practically played no role in their duties by holding the companies accountable on such issues. In most cases, these situations are more prevalent among our software engineers and senior staff members, with very few approaching the labor office or court of law for justice.

I hope our HR fraternity will take the lead in addressing such issues.

Ukmitra

From Saudi Arabia, Riyadh
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Dear Mr. Dhingra, ukmitra, Mr. Nair, kameswarao, and other members,

I appreciate your sincere efforts in demystifying the issue involved and pointing out the correct and fair line of action. I am sure it will help both freshers and experienced HR professionals to discharge their responsibilities in a fair and professional manner.

I hope other members who post their views do so after considered deliberations and research, rather than simply reacting without any substantial viewpoint.

Looking forward to your continued guidance and benevolent association.

Warm regards.

From India, Delhi
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Dear Mr. Dhingra,

Even if there is no Appointment Letter, there is always some law in operation, provisions of which will apply. For instance, in Delhi, the Shops Act clearly stipulates that "One Month's Notice Period" applies after three months of regular employment. As HR practitioners, we are morally bound to adopt a fair and ethical approach to matters pertaining to the "Manpower Compliment."

Cheers!!!! Vasant Nair


From India, Mumbai
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Dear All,

My colleague has given his resignation on 23rd Jan, and he has not completed one year in his current job. The company is not accepting his resignation letter, and he is not interested in staying. Now, the question is, what will be his notice period for relieving? If it is two months, and if he is ready to work, should his salary be given for the coming month? Please help me on how to proceed with the settlement.

Thank you.

From India, Bangalore
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Dear All,

According to you, we need to pay his January salary, and the final settlement will be done at the time of relieving. If it is a 2-month notice period, but if management does not agree to pay his January salary, what can be done? Please help me.

From India, Bangalore
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Respected Gupta ji,
With due regard, kindly review your reply in view of the question, as the question does not make any mention that the employee has agreed to join the new company on 15th February instead of 1st April.

The question here was:

"Say an employee resigns from the services of the organisation on 1st February and having a 2 month notice period, agrees to be relieved on 1st April after giving the appropriate handover.

If the organisation feels that the employee can finish the handover activities by 15th February and asks the employee to leave to join his/her new job - is the organisation liable to pay for the remaining notice period to the employee?"

That intends to say the employee has agreed to be relieved on 1st April, not to join the new company on 15th February. The only proposal from the present company for him is to hand over the charge by 15th February.

Your reply seems to be valid only in the case where the employee would have agreed to join or would have joined on 15th February only with the consent of the new company to allow him join on that date and that too when the question of suing by employee comes to fore.

From the question of the member, it clearly seems to be a current issue and the date of 15 February has yet to come when the employee is proposed to be discharged.

Regards

PS Dhingra

From India, Delhi
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Dear All,

In the above case that I mentioned, if the new employer is willing to accept the employee at an earlier date, does the old employer still need to pay the remaining notice period to the employee? Also, if the appointment letter states that in the case of resignation by the employee, the last working day would be finalized by the organization, is the organization liable to pay the remaining notice period?

Regards, Chanchal

From India, Mumbai
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No, the employer does not need to pay for that remaining period if the first situation occurs.

One can write the words in the appointment letters, but at the time of notice period, the employer has to inform the employee. One cannot relieve an employee even after 48 hours of accepting a notice on the ground that there is a note in the appointment letter.

From India, Bombay
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Once an employee resigns, for reasons of organizational security, protection of intellectual property rights, and also to bring in the replacement as early as possible, management may choose to relieve him or her earlier than the date of concluding the notice period.

The intention of the employee to leave the job is clear, and he or she cannot expect the employer to be any more sympathetic. Look at the condition when the employee is willing to pay up the salary in lieu of the notice period and leave earlier than the due date of relief. Therefore, for organizational reasons, the employer may choose to relieve the persons much before the actual closure of the notice period and is well within his rights to do so. There would not be any need to compensate the employee. If he loses, so be it. These are the risks he or she has to take.

There are cases where the employee, after submitting the resignation in writing, on second thoughts chooses to withdraw the same. The employer may or may not be willing to comply with the request of withdrawal. Therefore, once the employee submits his resignation, he has lost the lien on his job for all practical purposes and accepts the inevitable release earlier or on the dot.

EIRVALSA

From India, Madras
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Dear Eirvalsa,

Better if you please come up with some legal provision in support of your reply that may overrule the conditions of the agreement with the employee on the issue of the notice period, in particular reference to your following statement --

"Therefore, for organizational reasons, the employer may choose to relieve the persons much before the actual closure of the notice period and is well within his rights to do so. There would not be any need to compensate the employee."

This would help the community members to enhance their knowledge in respect of what you made mention of.

So far I know, neither the question nor supplementary question of Ms. Chanchal indicates any such serious state of security or any other serious reason of the organization arising out of the resignation notice of the employee.

I am of the opinion that instead of complicating the issue, we need to fulfill the exact need of the occasion rather than presuming several things by adopting only a negative approach. It is good to be cautious, but it is always dangerous to be over-cautious without any reason behind the issue and make the very simple issues very complicated sometimes.

PS Dhingra
Transformation & Vigilance Management Consultant
Dhingra Consultancy Group
New Delhi
dcgroup1962@gmail.com

From India, Delhi
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Dear eirvalsa,

I agree with Mr. Dhingra's comments on your post. Your opinions appear contrary to any HR policy, ethics, or natural justice; especially your views that "Therefore, once the employee submits his resignation, he has lost the lien on his job for all practical purposes and accepts the inevitable release earlier or on the dot."

It implies that once an employee submits resignation, his services can be terminated immediately, on-the-spot!

I suggest you need to rethink what you have written; as I do not wish to assume that you do not have sufficient knowledge of HRM or your organization has no policy or ethical outlook towards their employees.

In case one has to accept your arguments about "for reasons of organizational security, protection of Intellectual Property rights and also to bring in the replacement as early as possible, management may choose to relieve him or her earlier..." what is your organization's viewpoint about superannuating employees? It is well known that they are going to retire on a particular date. So does your organization, "for reasons of organizational security, protection of Intellectual Property rights," dispense with their services years earlier?

Kindly refrain from posting opinions that reflect badly on the ethics of your organization or your own competency as an HR professional. See, a bad policy cannot stand the rigorous examination of various situations, whereas a good and fair policy stands the tests of time and situation. Hope you will take my suggestion in good spirit and seriously.

Warm regards.

From India, Delhi
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Dear Chanchal,

Legally speaking, the first and foremost thing is that we should not talk in logical terms. The XYZ company, in the appointment letter issued to an employee, clearly mentioned that the employee will have to give two months' advance notice before leaving, and vice versa, before the termination of services, the employer will have to give two months' notice to the employee. Therefore, the question of handing over assignments by the management does not exist. In your case, if the company wants to relieve the employee before the agreed date, then it will be the employer's responsibility to end the process by mutual consent and not by violating the terms of employment.

Sudhakar Surve

From China
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Dear Sowmya Heggade,

In any circumstances, management will have to pay the employee salary for the period for which he has worked. So, even if the employee has agreed to work during the two-month notice period, on completion of his two months' notice period, he can demand his salary. If the employer is not willing to pay his salary, he can file a complaint with the office of the Labour Commissioner for the recovery of his salary.

From China
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Hi,

My friend resigned on 10 Feb 2010 and was supposed to serve a month's notice period until 9 Mar 2010. However, his employer asked him to leave within 5 days, i.e., on 15 Feb 2010.

a) In this case, will the employer need to pay for the remaining notice period, i.e., until 9 Mar 2010?
b) What will be the last working day for my friend on the relieving letter? Will it be 15 Feb 2010, or will it be 9 Mar 2010?

My friend is yet to find a new job. Can anyone help me with this?

Regards,
Rahul

From India, Mumbai
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Dear Rahul,

It is okay, your friend has fulfilled the requirement of one month notice. However, the company is not obliged to keep him for the full one month until the expiry of the notice. The notice period is meant for the company to make arrangements for a substitute upon the employee's departure so that the company's work may not suffer. It is not binding on the company to retain the employee for the full notice period. The company has the discretion to relieve the employee even on the same day as the notice if it is able to arrange for a suitable substitute. Therefore, there is nothing wrong if the company has ordered him to leave within 5 days. Your friend will not be entitled to any salary for the period beyond the date of relief. Your friend served the notice of resignation, and the company served the notice of termination. If the company had served the notice of termination and relieved him within 5 days, your friend would have been eligible to claim compensation in lieu of the remaining days of the notice period. Early relief has nothing to do with whether your friend has been able to find a job or not.

PS Dhingra
Vigilance & Transformation Management Consultant
Dhingra Group of Management & Educational Consultants
New Delhi

Rahul,

My friend resigned on 10 Feb 2010 and was supposed to serve a month's notice period until 9 Mar 2010. However, his employer asked him to leave within 5 days, i.e., on 15 Feb 2010.
a) In this case, will the employer need to pay for the remaining notice period until 9 Mar 2010?
b) What will be the last working day for my friend on the relieving letter, will it be 15 Feb 2010, or will it be 9 Mar 2010?

My friend is yet to find a new job.

Please, can anyone help me with this?

Regards,
Rahul

From India, Delhi
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