Employment contract states that either party (Employer or Employee) can terminate the contract by giving 3-months notice or pay in lieu thereof.
Company has appointed an HR Consultant who now states that while the Employee needs to give 3-months notice or pay out of his/her own pocket in case (s)he leaves early, the Employer can terminate the employee at any time after receiving resignation and need not pay the 3-months notice period to the employee. Is this valid?
From India, Bengaluru
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Company has appointed an HR Consultant who now states that while the Employee needs to give 3-months notice or pay out of his/her own pocket in case (s)he leaves early, the Employer can terminate the employee at any time after receiving resignation and need not pay the 3-months notice period to the employee. Is this valid?
From India, Bengaluru
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Hi,
Not right. When the employee is willing to serve the notice period after resignation, the employee should be allowed the notice period as per the separation clause or compensated with pay in lieu of the same.
However, if the employee makes a request for early relieving, the employer, at their discretion, can consider early relieving either with shortfall recovery or without recovery.
From India, Madras
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1015Not right. When the employee is willing to serve the notice period after resignation, the employee should be allowed the notice period as per the separation clause or compensated with pay in lieu of the same.
However, if the employee makes a request for early relieving, the employer, at their discretion, can consider early relieving either with shortfall recovery or without recovery.
From India, Madras
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Dear Paul,
I am afraid that your consultant tries to make your management happy by giving such an interpretation of the exit clause in the contract of employment. Any conditional clause in the contract of employment giving rise to mutual rights and obligations should ensure equality of interpretation and implementation to both the employer and the employee concerned. Notice condition on unilateral foreclosure of the contract of employment cannot violate this principle of equality for the simple reason that such a one-sided clause favoring the employer would be against public policy under section 23 of the Indian Contract Act, 1872.
Still, one may ask why such discretion is granted to the employer in certain employment agreements to accept or reject the buy-out option of the employee. It is only to ensure the protection of the organizational larger interest by way of completion of any time-bound assignments or for securing a suitable substitute. Thus, it is a different situation in which such discretion would enable the employer to effectively apply the principles of situational management in his organizational interest.
If the employee has expressed his willingness in the letter of resignation to serve the entire notice period, the employer has no choice other than accepting it. On the contrary, if the employer decides to relieve him forthwith, it amounts to a counter-offer that requires the acceptance of the employee concerned. If he does not accept such a counter-offer, the employer should allow him to continue till the expiry of the notice period or should pay him the notice period salary and relieve him simultaneously. It is the correct legal position as per various case laws.
From India, Salem
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I am afraid that your consultant tries to make your management happy by giving such an interpretation of the exit clause in the contract of employment. Any conditional clause in the contract of employment giving rise to mutual rights and obligations should ensure equality of interpretation and implementation to both the employer and the employee concerned. Notice condition on unilateral foreclosure of the contract of employment cannot violate this principle of equality for the simple reason that such a one-sided clause favoring the employer would be against public policy under section 23 of the Indian Contract Act, 1872.
Still, one may ask why such discretion is granted to the employer in certain employment agreements to accept or reject the buy-out option of the employee. It is only to ensure the protection of the organizational larger interest by way of completion of any time-bound assignments or for securing a suitable substitute. Thus, it is a different situation in which such discretion would enable the employer to effectively apply the principles of situational management in his organizational interest.
If the employee has expressed his willingness in the letter of resignation to serve the entire notice period, the employer has no choice other than accepting it. On the contrary, if the employer decides to relieve him forthwith, it amounts to a counter-offer that requires the acceptance of the employee concerned. If he does not accept such a counter-offer, the employer should allow him to continue till the expiry of the notice period or should pay him the notice period salary and relieve him simultaneously. It is the correct legal position as per various case laws.
From India, Salem
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Dear Mr. Umakanthan, OMG. Words cannot express the gratitude I feel towards you right now as I finish reading your definitive answer. Really appreciate your help! Thank you so much, Paul
From India, Bengaluru
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From India, Bengaluru
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If the provision is the same as you have given above, i.e., "either party (Employer or Employee) can terminate the contract by giving 3-months notice or pay in lieu thereof."
The contention of the Consultant is wholly unjustifiable and incorrect to the core.
From India, Bangalore
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The contention of the Consultant is wholly unjustifiable and incorrect to the core.
From India, Bangalore
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Hello everyone,
I need help. I joined the organization on 4th September 2023 and resigned on 17th October 2023 due to cultural issues. From 18th to 31st, I served my notice period. However, my appointment letter does not contain any clause regarding serving a notice period or any specified amount to be paid. Now, when I requested my release, they are asking me to pay an amount equal to two months' salary, which was not mentioned in the appointment letter. Additionally, they have withheld my salary for the month of October. Currently, I am suffering from typhoid, and they are insisting that I come to complete the exit formalities. Please guide me on how to proceed.
From India, Mumbai
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I need help. I joined the organization on 4th September 2023 and resigned on 17th October 2023 due to cultural issues. From 18th to 31st, I served my notice period. However, my appointment letter does not contain any clause regarding serving a notice period or any specified amount to be paid. Now, when I requested my release, they are asking me to pay an amount equal to two months' salary, which was not mentioned in the appointment letter. Additionally, they have withheld my salary for the month of October. Currently, I am suffering from typhoid, and they are insisting that I come to complete the exit formalities. Please guide me on how to proceed.
From India, Mumbai
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