Not serving notice period
Jeetu
(Querist) 29 March 2013
This query is : Resolved
Hello,
Recently I changed my job and left my previous company where i worked for around 4 years. As my new employer want me to join on immediate basis due to training requirements, hence I did not get option to serve my notice period to my last employer.
Now after few months I got the legal notice from my previous employer asking for payment of penalty amount as per agreement of employer which were signed during joining of company and during appraisals.
however I haven't signed any bond or any other document apart of basic employement agreement.
Could you please let me know how to deal with this situation by providing the best possible solution on this?
H.M.Patnaik
(Expert) 29 March 2013
Your previous employer may be requested to supply you the copies of documents wherein you have agreed to the notice period clause. Then only , suitable action can be suggested.
Pl. also examine the copy of Employment agreement if available with you.
In some cases, the agreement contains a clause to deposit the salary equivalent to notice period in lieu of serving the notice period . So before taking any action in this regard , you have to make yourself doubly sure whether there is any such condition you have agreed to during the course of previous employment .
Pradeep MK
(Expert) 29 March 2013
It appears that your new employer has allowed you to joint the job without any relieving letter of resignation letter addressed to your earlier employer. Therefore there is no trouble from your new employer.
Your financial liability depend upon the terms and conditions of your appointment letter of earlier employer. If the appointment letter provides for giving one month notice to resign then you may have to pay maximum one months salary in lue of notice period.
You may simply reply the notice saying that you are ready and willing to pay one month salary in lue of notice period and factual thing about your execution of bond.
Subsequent to this do not initiate any legal action at your end.
You have better chance to defend the litigation successfully if initiated by your earlier employer .
Jeetu
(Querist) 29 March 2013
Thanks a lot Pradeep/ Patnaik for sharing your views.
To clear your questions, Yes. My new employer do not demanded any reliving document knowing fact that I haven't got chance to submit notice period of 30 days.
Coming back to my previous employer. I put my resignation during last working day of month so even last month salary was credited to my account, and as per my employment agreement which were signed, they have a clause of paying around 3 times salary if employee is leaving without submitting notice period.
The only doubt in my mind is:
1. Is there any sense of paying around Rs. 100,000 to my previous employer now?
2. As per Indian Labor Law, is thier legal notice have such power to recover that penalty amount. As these are very common cases in many of coporates and many of HR dept. knows that Indian labor law is much favourable for employees.
H.M.Patnaik
(Expert) 29 March 2013
Dear Jeetu,
It seems you have signed the service contract which among others contained a clause to pay 3 months salary in lieu of serving the notice period.
Unless you have any solid reason for not serving the notice period , you are liable to deposit the notice pay or face the legal consequence. Better consult an experienced local lawyer before taking any action.
Jeetu
(Querist) 30 March 2013
Dear Mr. Patnaik, I do understand the service/ employment agreement which is the basic document which every employee signs during his/her employment in any kind of firm or company.
I am only confused regarding the legal value of that agreement. bcoz every employee or employer is well versed that there is no bonded labor law in India??
However Thanks for your advise, I will seek for legal advise.
Kumar Doab
(Expert) 30 March 2013
You have resigned with immediate effect without tendering and serving any notice period as per employment agreement/appointment letter, and appraisal letters signed by you.
Employee while accepting the appraisal letter should write clearly that increment is accepted and increase in notice period is rejected (if this is not acceptable).
Employers shall continue to find ways and means to trick the employees and circumvent the process that may lead to non acceptance of the conditions drafted by employers.
The notice period as mentioned by you is 3 months.
Since you were asked to join immediately by your current employer, ideally your current employer should buy out the notice period. Did you negotiate the notice period buy out?
If the current employer buys out the notice period you may ask your past employer to supply you the correct FNF statement showing adjustment of notice pay and you may ask for Form 16 as per correct FNF statement along with acknowledgment and acceptance of resignation, service certificate/relieving letter, attested copies of PF transfer forms, NOC/NDC etc………..
If your current employer agreed to buy out notice period and past employer does not reduce your FNF payout by notice pay you shall be subjected to double taxation.
If you have not handed over the company property and charge, and have not completed the exit formalities, your past employer may become rigid on not issuing reliving letter.
Relieving letter signifies nothing is due at the end of employee and adverse against the employee and employee has been properly relieved.
Although your current employer has not asked for relieving letter from you, your future employers may ask for relieving letter issued by past employers and they may run reference/back ground check during which the past employer may post adverse comments against you and you may have a unpleasant situation to handle.
The notice pay is @ Basic + DA as employer would disburse leave encashment, OT, Bonus, Gratuity.. etc at this rate. However you may check the T&C in appointment letter/employment agreement signed by you.
If your current employer had not agreed or does not agree to buy your notice period then you have been tricked and a pass has been made on you.
You have acted in hurry without consulting in advance and now you have to swallow the outcomes.
The service conditions are stated in standing orders of the company, appointment letter.
The notice period is part of service conditions. The service conditions stated in standing orders shall prevail upon appointment letter.
If standing orders are applicable to your company and have been extended to your designation, you may refer to the clause on notice period. If it is 1 month, then notice period applicable as in your case should be 1 month.
The notice period is also stated in SE Act applicable in your state, which you may check. The long notice period to be tendered by employee is obviously in favor of employer…………
e.g.: The Delhi Shops and Establishments Act
30. NOTICE OF DISMISSAL.
(2) No employee who has put in three months’ continuous service shall terminate his employment unless he has given to his employer a notice of at least one month, in writing. In case he fails to give one month’s notice he will be released from his employment on payment of an amount equal to one month’s pay.
COMMENTS
(a) Applicability of section 30
In the absence of any standing orders or any contract between the employer and the contesting respondent containing any particular terms or conditions, the conditions of service of the employee relating to his employment in an establishment………..
(b) Notice or wages in lieu thereof under section 30—When to be given?
A plain reading of section 30 of the Act would make it clear that whereas the notice of one month under sub-section (1) is for the benefit of the employee, the notice under sub- section (2) is for the benefit of the employer.
prabhakar singh
(Expert) 30 March 2013
One thing is clear from your posts that you are not willing to comply with their demand.
Then they can not get it unless they file a recovery suit.
Hence postpone the discussion until filing of suit of recovery.
