Dear All, If an employee RESIGNS and is ready to serve the notice period, but the company wants to relieve him IMMEDIATELY. Is there any binding on the company to compensate him the remaining notice period? This is not a termination. This is a relieving as per the desecration of the Management.
Do you encounter such issue? Any practice? Please support your views with court cases if any.
From India, Pune
124Do you encounter such issue? Any practice? Please support your views with court cases if any.
From India, Pune
Dear Vinod,
It is important to first understand the concept of Notice
From the employers point of view it is necessary that the employee gives notice for 2 reasons
1. So that the employee completes pending tasks assigned to him / Her and hands over duties so that the functioning of the organization is not hampered
2. To enable the employer to find a suitable replacement in that time
From the employees point of view it is necessary that the employer gives notice so that:
1. The employee can find suitable employment
The notice period is based on the seniority of the employee and the role he/she performs.
The concept of Notice pay in lieu of Notice served is to compensate the inconvenienced party for the inconvenience caused.
And in both cases it is upto the inconvenienced party to waive the notice period without paying or demanding compensation.
However it depends on one very key aspect: was it a forced or voluntary resignation?
In case of a forced resignation you will have to pay the compensation for the notice period not served / enforced.
In case of a voluntary resignation, there is no need to pay any compensation for the notice period not enforced.
However for the sake of ease of administration and clarity in these kind of situations, Please include the below clause in your employment agreement / employee handbook on the subject of Termination / resignation:
“In case the employee resigns, the company at its discretion may relieve the employee with immediate effect without paying for the notice period not enforced.”
I hope this solves your query.
Regards
Savio
From India, Mumbai
It is important to first understand the concept of Notice
From the employers point of view it is necessary that the employee gives notice for 2 reasons
1. So that the employee completes pending tasks assigned to him / Her and hands over duties so that the functioning of the organization is not hampered
2. To enable the employer to find a suitable replacement in that time
From the employees point of view it is necessary that the employer gives notice so that:
1. The employee can find suitable employment
The notice period is based on the seniority of the employee and the role he/she performs.
The concept of Notice pay in lieu of Notice served is to compensate the inconvenienced party for the inconvenience caused.
And in both cases it is upto the inconvenienced party to waive the notice period without paying or demanding compensation.
However it depends on one very key aspect: was it a forced or voluntary resignation?
In case of a forced resignation you will have to pay the compensation for the notice period not served / enforced.
In case of a voluntary resignation, there is no need to pay any compensation for the notice period not enforced.
However for the sake of ease of administration and clarity in these kind of situations, Please include the below clause in your employment agreement / employee handbook on the subject of Termination / resignation:
“In case the employee resigns, the company at its discretion may relieve the employee with immediate effect without paying for the notice period not enforced.”
I hope this solves your query.
Regards
Savio
From India, Mumbai
Hi Savio, Thanks a lot. Very eloborate answer. This is voluntary resignation and my views are same. However have you come accross any case law on such issue? Regards, Vinod Bidwaik
From India, Pune
From India, Pune
Dear Vinod,
I haven't come across any case laws but have dealt with similar situations before. My understanding is that the concerned employee has an offer to join after a month and wants to get a salary upto the day he joins his new organization.
Things to consider
1. will he take up the mater in a court of law?
If yes then it is a lengthy process which he will loose on the technical aspects of the reason for notice. of course there are the costs to consider. The costs are not worth it for the employee both in terms of time and cost.
If No then don't bother just tell him that the company wont pay. explain to him him concept of notice and tell him that since he initiated the resignation you don't need to pay him anything since he has caused the inconvenience.
Basically he is trying now to get the maximum possible amount he can from you.
Regards
Savio
From India, Mumbai
I haven't come across any case laws but have dealt with similar situations before. My understanding is that the concerned employee has an offer to join after a month and wants to get a salary upto the day he joins his new organization.
Things to consider
1. will he take up the mater in a court of law?
If yes then it is a lengthy process which he will loose on the technical aspects of the reason for notice. of course there are the costs to consider. The costs are not worth it for the employee both in terms of time and cost.
If No then don't bother just tell him that the company wont pay. explain to him him concept of notice and tell him that since he initiated the resignation you don't need to pay him anything since he has caused the inconvenience.
Basically he is trying now to get the maximum possible amount he can from you.
Regards
Savio
From India, Mumbai
Dear Mr.Vinod/Mr.Savio,
Mr.Savio has explained the concept of notice period in very clear and simple terms.
The notice period required to be given is required to be spelt out in the appointment letter or in the terms of contract or in the Co internal policy. Same is supposed to be clear to both employee and employer and can not be changed to suit either party.
Few Co of repute are known to have given 6 to 12 months of pay to employees at the time of laying them off.
However, in case, both the parties agree, the period can be waived off.The decision can not be of one party alone as this will be illegal and not tenable in court of law.
Regards,
Col.Suresh Rathi
From India, Delhi
Mr.Savio has explained the concept of notice period in very clear and simple terms.
The notice period required to be given is required to be spelt out in the appointment letter or in the terms of contract or in the Co internal policy. Same is supposed to be clear to both employee and employer and can not be changed to suit either party.
Few Co of repute are known to have given 6 to 12 months of pay to employees at the time of laying them off.
However, in case, both the parties agree, the period can be waived off.The decision can not be of one party alone as this will be illegal and not tenable in court of law.
Regards,
Col.Suresh Rathi
From India, Delhi
Hi Sekhar here , Really good explanation by Mr Savio but i have one clarification which employee can always put that as per my Appt letter , i need to serve notice period for 1month after my resignation , so to serve that notice period i have given my resignation letter before 1 month .I am eligible for this 1 month salary with settlement .If organisation donot have any clause like this then i should have given resignation on the same day and relieved on the same day.Based upon this only i have commited to my new organisation that i will be able to join after 1 month , so why should i loose i month salary which i would have got their if i would have joined immediately .Do we have any answer for this .
From India, Bangalore
From India, Bangalore
Dear Sekhar,
There is an answer in the explanation I have given above. The principle for Notice Period in each case of resignation and termination is a principle of fairness to the inconvenienced party. Hence it a mater of right for the inconvenienced party, to enforce the notice period, or seek compensation. It is the duty of the inconveniencing party to serve the notice period or pay compensation.
It is prerogative of the inconvenienced party to forgo / waive the notice / compensation. And the inconveniencing party cannot add to the hardship by demanding the enforcement of notice or compensation.
The second part of the answer is this: Most prospective employers want the candidate to join ASAP. They too have a position to fill remember. They would be very happy to have you join earlier. Most ask candidates to negotiate on notice period and in extreme cases they even buyout the notice period.
Most cases the resigning employee doesn’t loose at all.
However to be fair to all concerned it is best to have the clause I mentioned enumerated in the offer letter or employment agreement.
Forgive me if I’m wrong but, as I see in the case Mr. Vinod has mentioned the resigning employee wants to have his cake and eat it too…
In this context let me mention the 2 scenarios where employers don’t enforce notice and still pay the resigning employee.
1. As mentioned earlier they pay this compensation and more when it is a forced resignation (in case of layoffs or retrenchment to avoid ruining the employee’s reputation with a termination)
2. I case of employees with access to confidential data they pay a compensation called in today’s lingo “Gardening Leave” a cooling off period before the employee joins another employer.
From India, Mumbai
There is an answer in the explanation I have given above. The principle for Notice Period in each case of resignation and termination is a principle of fairness to the inconvenienced party. Hence it a mater of right for the inconvenienced party, to enforce the notice period, or seek compensation. It is the duty of the inconveniencing party to serve the notice period or pay compensation.
It is prerogative of the inconvenienced party to forgo / waive the notice / compensation. And the inconveniencing party cannot add to the hardship by demanding the enforcement of notice or compensation.
The second part of the answer is this: Most prospective employers want the candidate to join ASAP. They too have a position to fill remember. They would be very happy to have you join earlier. Most ask candidates to negotiate on notice period and in extreme cases they even buyout the notice period.
Most cases the resigning employee doesn’t loose at all.
However to be fair to all concerned it is best to have the clause I mentioned enumerated in the offer letter or employment agreement.
Forgive me if I’m wrong but, as I see in the case Mr. Vinod has mentioned the resigning employee wants to have his cake and eat it too…
In this context let me mention the 2 scenarios where employers don’t enforce notice and still pay the resigning employee.
1. As mentioned earlier they pay this compensation and more when it is a forced resignation (in case of layoffs or retrenchment to avoid ruining the employee’s reputation with a termination)
2. I case of employees with access to confidential data they pay a compensation called in today’s lingo “Gardening Leave” a cooling off period before the employee joins another employer.
From India, Mumbai
It all depends on the Termination clause mentioned in the Appointment Letter. If the termination clause states that on sucessful completion of probation/confirmation either party can terminate the service giving one month notice or salary in lieu of notice then the employee who has resigned of his/her own or voluntarily and is willing to give notice period and if the company relieves him immediately without taking notice then the employer has to pay one month salary in lieu of the notice period, as mentioned in the appointment letter
Thanks & Regards
Saji
From India, Ahmadabad
Thanks & Regards
Saji
From India, Ahmadabad
Hi Saji,
I go with Savio. Resignation is a trigger for accepting the resignation and relieving by the employer. If knows that he is not adding value during the notice period, it is the right of employer to relieve him as per the convenient of the company.
The logic is clear. Unfortunately there is not such law or the court judgment on this.
The benchmark what other (majority) industries do will support the logic.
Regards,
From India, Pune
I go with Savio. Resignation is a trigger for accepting the resignation and relieving by the employer. If knows that he is not adding value during the notice period, it is the right of employer to relieve him as per the convenient of the company.
The logic is clear. Unfortunately there is not such law or the court judgment on this.
The benchmark what other (majority) industries do will support the logic.
Regards,
From India, Pune
Hi Mr. Vinod
Its just a matter of debate, if any employee is not adding any value to the service to the company then the company would have not hired him. At times company relieves an employee to avoid any leak of confidential matters to the competitor, here the company should understand that if an employee is interested in giving the proper handover during the notice period and gives sufficient time to the employer to either promote from within or hire a replacement which is a good gesture from the employee's side and if the company takes the decision to relieve the employee immediately its the sole discretion of the employer and not the employee so in my perception the employee should be compensated with the notice period. Last but not the least there are many ways to avoid giving the compensation to any employee but the HR should appreciate that even he/she is also an employee and the same scenario can happen to anyone.
Thanks & Regards
Saji
From India, Ahmadabad
Its just a matter of debate, if any employee is not adding any value to the service to the company then the company would have not hired him. At times company relieves an employee to avoid any leak of confidential matters to the competitor, here the company should understand that if an employee is interested in giving the proper handover during the notice period and gives sufficient time to the employer to either promote from within or hire a replacement which is a good gesture from the employee's side and if the company takes the decision to relieve the employee immediately its the sole discretion of the employer and not the employee so in my perception the employee should be compensated with the notice period. Last but not the least there are many ways to avoid giving the compensation to any employee but the HR should appreciate that even he/she is also an employee and the same scenario can happen to anyone.
Thanks & Regards
Saji
From India, Ahmadabad
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