Legal and company actions during termination - employee has decided to quit during the notice period

Hi All,

Requesting the seniors to advise on the below matter - One of our employees has resigned as he received another offer. He has requested to negotiate the current notice period of 60 days to 30 days, or else he is willing to compensate for the notice period amount. Due to the current critical circumstances of the team, we were unable to approve the request. Now, he has decided to quit during the notice period, leading to termination. What actions (including legal) should we take in this matter further? Please suggest.

Thanks & Regards,
Drishya

Dear Drishya,

In my opinion, the terms of the contract of employment and the specific rules and regulations framed in its wake are there to be genuinely followed and not to be flouted to suit the convenience of either party. This principle also applies to the bonafide use of the exit clause in the unilateral termination of the contract of employment. If the exit clause allows the option of buy-out by the employee, the employer's refusal, particularly under the apparent reason of a tight work schedule, when the employee is willing to serve half of the notice period, seems unreasonable. Subsequently, taking disciplinary action resulting in the employee's termination would be considered a poor HR practice.

When the employee has already expressed their intention to serve a part of the notice period and buy out the rest, why not consider alternative arrangements instead of outright refusal?

It is universally accepted that no individual's service is indispensable in the lifespan of an organization. When better opportunities arise in the employment market, individuals naturally seek to take advantage of them. To retain an employee's services, there are other options such as offering better benefits.

An ideal employer would not seek to exploit the weaker position of their employee by refusing to exercise their discretion in a fair and impartial manner. It is always preferable to adhere to the terms and conditions of the contract of employment in both letter and spirit, rather than attempting to exploit any legal loopholes.

Hello Drishya,

Umakanthan has mentioned a very valid aspect of HR Policies and Practices.

Of late, HR professionals tend to mix up the implementation of an existing policy and the crux/spirit behind its framing. Too often, corporations begin to behave like government departments—going by the rules rather than focusing on the spirit of the policies and adapting along the way. I am not sure what the company would have expected to gain by insisting this employee serve the full notice period—unless the handing-over process is expected to last the full two months (in which case, fixing the notice period at two months wasn't right in the first place—some buffer is always added when fixing the notice period to cater to unforeseen situations).

To add to what Umakanthan mentioned about the way to handle this issue, please note that you are not dealing with just this case here. The company is sending out a clear message to the rest of the employees on how to handle their resignations if and when that time comes. When you wish to follow the rules rigidly, then the employees are also prone to follow the rule book rigidly, many times to the detriment of the company—case in point, attendance timings.

To give you an example of the case of a candidate last week whom we placed with one of our clients: this candidate's present company has the practice of holding the salaries—including the current month—of anyone resigning until the person is relieved (notice period is two months). So he wanted to resign after getting the present month's salary on 1 or 2 November 2021. Legally or technically, the guy may be right—but he too doesn't relish doing it. But the company left him no choice due to their short-sighted policies. The guy needs to support his family, and so he found out a shortcut to ensure he is not affected much—it's a pity that the company doesn't recognize this simple fact of life.
When the company thinks just for itself—through the various policies and practices—how can one blame the employee for thinking about themselves first and foremost? Do you think this person will show any serious interest in whatever period he would still be spending in this company? And except for ensuring that the HR policy has been followed to the hilt, what else does the company hope to achieve?

Suggest designing HR policies that result in a win-win situation/solution for all the stakeholders. Else, it's only a matter of 'when' than 'if' when situations can become nasty the way your case seems to have developed into—going legal may not be the right way in all scenarios. In this very case, my guess is that the company may have to spend much more on legal/advocate fees than it's saved now. Penny-wise, pound-foolish probably?
Also, in a single line, you have ensured that the brand image of your company doesn't get a high score in various social media portals if this guy decides to share his experience with the world.

All the Best.

Regards,
TS

Thank you for your valuable feedback. I have already tried to resolve the issue by negotiating on the notice period compensation. However, the management is insisting on legal action as they fear it may set a precedent for other employees to leave the organization in a similar manner, given the constraints of a start-up.

Anyways, hoping for the best!

Thanks & Regards, Drishya

Hello Drishya,

Remind your management of one simple fact of life and HR: An employee leaves the manager, not the company (in your case, the management).

Sooner, they fix the actual causes, the better for them, not the employees. If the management goes legal, they can bet their last penny that the employees will find other ways to circumvent the situation—gone are the days when court cases can be used as a weapon. With social media so strong today, at the end of the day, it's the companies that will have to bear the cross rather than the employees.

Your management thinks going legal is the best solution to solve this issue, but they also seem to forget that this very same solution also has a high probability of ensuring new employees just don't get interested in joining your company. At best, the chances are that they may attend interviews, accept the offers, and then use the offers elsewhere for better terms. I have seen this happening so many times until the companies learned the hard way after getting hit multiple times. Hope you get the point.

Regards,
TS

Dear Drishya-Pradeep,

In my opinion, you should consider the request of buying out 30 days' notice of the employee. In every appointment letter, the clause "either party can give notice of 60 days or pay in lieu of that notice" implies that the buyout option exists for both the employer and the employee. Therefore, denying the buy-out is completely discriminatory and constitutes harassment.

Furthermore, if your management does not want the employee to leave prior to completing the 60-day notice period, you should communicate this to the employee. You can instruct the employee to complete the tasks at hand, and inform them that their resignation will be on hold. Leaving before the notice period expires could result in the termination of services, justifying the employee's termination for absconding from the job. Legal action should be unnecessary; if the employee wishes to challenge the termination, they may do so in court. It would be challenging for the employee to secure a new job without a relieving letter and an experience certificate.

Thank you.

Dear Drishya,

As the HR Manager, you need to pay attention to the contract terms between the employer and the employee. Where the terms are clear and transparent, don't hesitate to convince the management that the company may lose the case in court, which will affect the employer financially and reputation-wise.

Dr. M. K. Ravi
Advocate

Hi, Niharika Here,

I want to confirm that one of our employees wants to resign from their job due to some personal reasons. We kindly request the employee to wait for one week for the replacement to be arranged. Another employee will be joining within two days, so please hand over all responsibilities before you leave. During this transition period, if you need to take a leave or a half-day, you are permitted to do so.

However, on the same day, the employee left the office without any prior intimation and is now refusing to return for an orderly exit process.

What legal actions can be taken in this situation?