Employee asking for Salary for notice period - She has given resignation due to her own issues

Dear Seniors,

I have an issue with one of our employees. She has submitted her resignation due to personal reasons and mentioned that she will serve the notice period. However, since she resigned voluntarily, we have relieved her from duty today. Now, she is requesting payment of one month's salary for the notice period. Please advise on the appropriate course of action in this situation.

Thank you.

Hi,

The employee is willing to serve the notice period, but you have asked her to leave, so it is your obligation to pay her. Please check the resignation clause in the appointment letter of your company and act accordingly.

She has an issue if she stated in her resignation that she will resign with effect from a future date, which may be one month away.

B. Saikumar

Normally, the clause reads like this:

"Your services may be terminated by giving one month's notice or one month's pay in lieu of notice. You may resign from the services by giving one month's notice or one month's pay in lieu of notice."

PURPOSE:

If the management terminates suddenly, the employee will face hardship, and to compensate for this hardship to a certain extent, 30 days' notice or 30 days' pay is given.

Similarly, when an employee resigns, the management will face the hardship of not having a person for that job and also need to spend money to manage the same job by incurring overtime, etc. To compensate the management, 30 days' notice is prescribed, and to persuade employees to be around for 30 days, notice pay is also included.

Logically, both parties can say that they do not want the compensation.

PRESENT CASE:

The employee opts to resign, and she gives a letter saying that she would like to be relieved on a specific date. Her intention is to leave the company, and there is no hardship created for her by the company. It is for the management to decide whether to relieve her on the same day or any day during the notice period. We need to understand the purpose of such clauses and apply the logic.

Some may not agree with my argument, and there has not been any case law on this subject (to my knowledge). However, I have followed this logic for 35 years, and wherever I have worked, we have followed this logic.

T. Sivasankaran

You need to see the relevant clauses in the appointment letter, standing orders, HR manual (assuming given to employees), and terms of employment if any. Some companies have a clause stating that management has the right to accept resignation with or without notice, at their choice. If you have a clause to that effect, then you can relieve her and not pay.

In any other case, you have to pay the notice period salary even if you do not want her in the office. If you wish to take a humane view and consider your reputation in the job market (and also you may need to interact with the same person in another company on a professional basis), then you must pay for the notice period. She may face financial hardships if she loses one month's salary. It's not a good idea to have someone leave with a bad impression of your company when it could be avoided.

Likewise, the above arguments do not apply if she was asked to leave for fraud, shoddy work, or any matter of dispute that makes it impossible for her to work in the office.

There is a practice of gardening leave in Western economies that applies to senior employees. It's a period for which they get paid, can't work for anyone else or join the next job, but are not wanted in the office (confidentiality issues). At the same time, they are available for anything the company might need. Unfortunately, few companies follow that in India.

Hi,

In my opinion, you have to consider only the clause of the appointment letter.

Regards,
Pani Ram Arya

In this case, the employee has resigned on her own and not been terminated by the employer. Therefore, it is at the discretion of the employer to either make her work the notice period or relieve her immediately. The employee cannot claim notice pay in lieu of the notice period. If the employer had terminated her, she would have been eligible for notice pay.

Ms. Rupawati,

Since the employee has expressed her intention to resign from 21 July 2012 but you have relieved her immediately, it is advisable, both on technical grounds as well as on grounds of administrative prudence, to pay her one month's salary and end the matter on a win-win situation.

B. Saikumar
Mumbai

Dear Seniors,

In our appointment letter, we have mentioned that "your service may be terminated at any time by one month's notice in writing by either side." Now, she is referring to that point and asking us to pay one month's salary for the notice period; otherwise, she will proceed legally.

Is the point we mentioned in the appointment letter legally strong on the employee's side? Please suggest to me.

But she has not been terminated. She has resigned. If she has resigned, it's up to the employer to make her work for the full notice period or relieve her immediately. If she was terminated by the employer, she would be eligible for notice pay.