Hi All,
Greetings for the day.
Recently, it has been noticed that employees in critical job roles are leaving the organization without serving the full notice period. This situation leaves the employer with insufficient time to hire a replacement or complete knowledge transfer. It is important to understand best practices to address this issue and determine the necessary communications at different levels. Employees need to take this matter seriously and negotiate their date of joining with potential future employers before accepting a new opportunity.
Looking forward to your feedback. Thanks in anticipation.
From India,
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1Greetings for the day.
Recently, it has been noticed that employees in critical job roles are leaving the organization without serving the full notice period. This situation leaves the employer with insufficient time to hire a replacement or complete knowledge transfer. It is important to understand best practices to address this issue and determine the necessary communications at different levels. Employees need to take this matter seriously and negotiate their date of joining with potential future employers before accepting a new opportunity.
Looking forward to your feedback. Thanks in anticipation.
From India,
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Dear Moumita,
The incorporation of a notice clause for unilateral termination of employment by either party, or Notice Covenant in the contract of employment, is mainly for the purpose of gaining sufficient time for finding a suitable replacement by the employer to ensure the continuity of job performance, and for finding a suitable alternative job by the employee to ensure their continuity of employment elsewhere, respectively.
To my knowledge, courts do not ordinarily enforce the performance of contracts of a personal nature, such as a contract of employment. Therefore, such a clause is contractual by nature, except in situations of discharge simpliciter or retrenchment by the employer. In a situation of breach of contract by the employer, the employee can sue for damages, which are not normally limited to the salary for the notice period alone. Conversely, in the case of breach of contract by the employee through resignation or otherwise without serving the stipulated notice period, the employer cannot obtain a decree from the court for specific performance of the covenant to compel the employee to work for the entire notice period. Instead, the employer can only claim liquidated damages up to the amount of the notice period salary.
In S.S. Shetty v. Bharat Nidhi LTD., (AIR 2001 SC 3988), the Honorable Supreme Court of India categorically held that in the case of illegal termination of the contract of employment by the employee, only reasonable damages can be granted. If there is a clause for termination of the contract by one month's notice, then one month's salary can be considered as reasonable damages.
This legal position suggests that the notice period set in the contract should be reasonable and equally applicable to both the employer and the employee. The reasonable period of notice depends on various factors such as job position, length of service, and the reason for exit. The practice in countries like the USA, the UK, Germany, Poland, etc., involves notice periods ranging from 15 days to 12 weeks, roughly at the rate of one week per year of service, with a maximum of 12 weeks.
The key question then becomes how to make employees realize the necessity and importance of serving the entire notice period upon their early exit. It is crucial for employers to also understand this importance. When a buy-out option is available, the employer should allow the employee to exercise it without affecting the establishment's work. However, some employers tend to treat such options mechanically and insist on the full notice period, using pressure tactics to make the exit process difficult. Even when employees genuinely opt for a buy-out due to health reasons, some employers reject it harshly.
If employers can terminate contracts by paying notice salary in lieu of notice, employees should have the same option. Understanding the causes and effects of career stagnation can lead to lower employee turnover and smoother exits. A progressive employer, when an employee leaves for better career prospects, would facilitate a peaceful exit and maintain a positive relationship. While not all reasons for employee exits are genuine, a people-oriented organization can mitigate non-compliance to a great extent.
Best regards, [Your Name]
From India, Salem
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The incorporation of a notice clause for unilateral termination of employment by either party, or Notice Covenant in the contract of employment, is mainly for the purpose of gaining sufficient time for finding a suitable replacement by the employer to ensure the continuity of job performance, and for finding a suitable alternative job by the employee to ensure their continuity of employment elsewhere, respectively.
To my knowledge, courts do not ordinarily enforce the performance of contracts of a personal nature, such as a contract of employment. Therefore, such a clause is contractual by nature, except in situations of discharge simpliciter or retrenchment by the employer. In a situation of breach of contract by the employer, the employee can sue for damages, which are not normally limited to the salary for the notice period alone. Conversely, in the case of breach of contract by the employee through resignation or otherwise without serving the stipulated notice period, the employer cannot obtain a decree from the court for specific performance of the covenant to compel the employee to work for the entire notice period. Instead, the employer can only claim liquidated damages up to the amount of the notice period salary.
In S.S. Shetty v. Bharat Nidhi LTD., (AIR 2001 SC 3988), the Honorable Supreme Court of India categorically held that in the case of illegal termination of the contract of employment by the employee, only reasonable damages can be granted. If there is a clause for termination of the contract by one month's notice, then one month's salary can be considered as reasonable damages.
This legal position suggests that the notice period set in the contract should be reasonable and equally applicable to both the employer and the employee. The reasonable period of notice depends on various factors such as job position, length of service, and the reason for exit. The practice in countries like the USA, the UK, Germany, Poland, etc., involves notice periods ranging from 15 days to 12 weeks, roughly at the rate of one week per year of service, with a maximum of 12 weeks.
The key question then becomes how to make employees realize the necessity and importance of serving the entire notice period upon their early exit. It is crucial for employers to also understand this importance. When a buy-out option is available, the employer should allow the employee to exercise it without affecting the establishment's work. However, some employers tend to treat such options mechanically and insist on the full notice period, using pressure tactics to make the exit process difficult. Even when employees genuinely opt for a buy-out due to health reasons, some employers reject it harshly.
If employers can terminate contracts by paying notice salary in lieu of notice, employees should have the same option. Understanding the causes and effects of career stagnation can lead to lower employee turnover and smoother exits. A progressive employer, when an employee leaves for better career prospects, would facilitate a peaceful exit and maintain a positive relationship. While not all reasons for employee exits are genuine, a people-oriented organization can mitigate non-compliance to a great extent.
Best regards, [Your Name]
From India, Salem
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