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Hi Everyone,
I have a question regarding the notice period clause in a contract of employment. If the contract stipulates that an employee must give 1 month's notice to resign from the job or pay 1 month's salary in lieu of notice, is 1 month treated as date to date from the Date of Resignation? Also, if the employee does not work the full notice period, how do we calculate the salary and the money owed to the company?
For example, if the date of resignation is May 21st, is the notice period from May 21st to June 21st? If the employee only works until June 7th and his salary is 20,000, does the employee owe the company 10,000 rupees?
Thank you,
Suchitra N
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I have a question regarding the notice period clause in a contract of employment. If the contract stipulates that an employee must give 1 month's notice to resign from the job or pay 1 month's salary in lieu of notice, is 1 month treated as date to date from the Date of Resignation? Also, if the employee does not work the full notice period, how do we calculate the salary and the money owed to the company?
For example, if the date of resignation is May 21st, is the notice period from May 21st to June 21st? If the employee only works until June 7th and his salary is 20,000, does the employee owe the company 10,000 rupees?
Thank you,
Suchitra N
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Dear Suchitra,
If, according to the appointment terms, the notice period is one month, then one has to serve the notice period for the same duration. If the employee remains absent after a certain time of serving the notice period, then the notice period will be assumed for only those days present. Otherwise, the same will be deducted from the available leave balance.
This means that if someone gives notice on the 21st of May that they will be leaving after completing one month of the notice period, which is on the 21st of June, but only stays until the 10th of June, then only 20 days of notice will be served, or it might be deducted from their available leave balance.
Regards,
Amit Seth.
From India, Ahmadabad
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If, according to the appointment terms, the notice period is one month, then one has to serve the notice period for the same duration. If the employee remains absent after a certain time of serving the notice period, then the notice period will be assumed for only those days present. Otherwise, the same will be deducted from the available leave balance.
This means that if someone gives notice on the 21st of May that they will be leaving after completing one month of the notice period, which is on the 21st of June, but only stays until the 10th of June, then only 20 days of notice will be served, or it might be deducted from their available leave balance.
Regards,
Amit Seth.
From India, Ahmadabad
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Hi,
As per the employment contract, the employee should either pay back 15 days' salary or you can withhold the 15 days' pay for the work completed. If the employee has not handed over what is expected from him, you can ask for an explanation for not participating in a smooth transition. If the employee continues to behave inappropriately, you have the option to halt the relieving formalities.
Regards,
Vamsee
From India, Hyderabad
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As per the employment contract, the employee should either pay back 15 days' salary or you can withhold the 15 days' pay for the work completed. If the employee has not handed over what is expected from him, you can ask for an explanation for not participating in a smooth transition. If the employee continues to behave inappropriately, you have the option to halt the relieving formalities.
Regards,
Vamsee
From India, Hyderabad
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pay in lieu of notice period varies from employee to employer: if an employer does it, he compenstes on gross salary if an employee has to give, then it is purely basic ... surya
From India, Delhi
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From India, Delhi
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notice period means he should present 30 days. Aagar woo 20 days present rehate hai too oskaa 10days kaa notice period salary se kat jaayega ishkee calculation basic/30* absent during notice period
From India, Delhi
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From India, Delhi
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Dear Suchitra, You’re right. Please refer to the excel file attached to justify your calculation. -binzy
From India, Bangalore
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From India, Bangalore
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Thank you very much for taking the time to explain in such detail. I now feel more confident about the decision I have made. If you have read the other responses, you will notice that a couple of people are suggesting that when an employee has to pay, the basic salary is used, not the gross salary. What is your response to that?
Suchitra
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Suchitra
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Using Basic salary when an employee has to pay and Gross salary when the employer has to pay. What is the logic behind that? Does this have any legal basis? Suchitra
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Dear Suchitra,
I believe it's calculated on the gross salary, regardless of whether the payment is made by the employer or the employee. As far as I know, only the EL encashment of the employee is calculated based on the basic salary. Let's also wait for other members to comment on this.
- Binzy
From India, Bangalore
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I believe it's calculated on the gross salary, regardless of whether the payment is made by the employer or the employee. As far as I know, only the EL encashment of the employee is calculated based on the basic salary. Let's also wait for other members to comment on this.
- Binzy
From India, Bangalore
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Hi,
As far as I know, it is paid on gross salary. However, in cases of a shortfall of notice where the employer has to recover the amount from the employee, they do recover from the basic salary only. The same procedure applies for the encashment of leave, which is also based on basic salary.
So, if an employee, for example, has a 30-day notice period but serves only 8 days and has 22 days of paid leave left, those paid leave days get adjusted with the remaining notice days, i.e., 22 days. If the employee has only 12 leaves left, then the remaining 10 days are recovered from the employee's basic salary, not the gross.
Therefore, in the example provided by one of the members, I presume that the $10,000 gross, inclusive of all CTC components, will be given to the employee. However, for the remaining 15 days not served, the amount will be deducted from the basic part, not the gross. So, the employee will not owe $10,000, but Basic/30 * shortfall of notice days.
Regards,
Deepa
From India, Gurgaon
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As far as I know, it is paid on gross salary. However, in cases of a shortfall of notice where the employer has to recover the amount from the employee, they do recover from the basic salary only. The same procedure applies for the encashment of leave, which is also based on basic salary.
So, if an employee, for example, has a 30-day notice period but serves only 8 days and has 22 days of paid leave left, those paid leave days get adjusted with the remaining notice days, i.e., 22 days. If the employee has only 12 leaves left, then the remaining 10 days are recovered from the employee's basic salary, not the gross.
Therefore, in the example provided by one of the members, I presume that the $10,000 gross, inclusive of all CTC components, will be given to the employee. However, for the remaining 15 days not served, the amount will be deducted from the basic part, not the gross. So, the employee will not owe $10,000, but Basic/30 * shortfall of notice days.
Regards,
Deepa
From India, Gurgaon
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Withdrawl of Resignation and Notice period.doc
EMPLOYEE SALARY INCOME TAX CALCULATION.xls x