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CA. Vikash Dwivedi (Chartered Accountant)     03 March 2013

Notice period mentioned in offer letter

Dear LCI members Hello,

One of my friend works in ITES (outsourcing /offshoring) company in Andhra Pradesh Head quartered in Delhi.  she has some personal family matter to address and she is under tremedous pressure to leave the company and she has resigend but she needs to get relieved As early As Possible on her personal grounds though she like job and company but her bosses not ready to relieve her before 90 days whereas the offer letter says 90 days notice period is not absolute  may or may not be buyable by the company. and can be relieved even before basd on the circumstances.

Please suggest the remedy with some substantiative documents.

 

Thanks,

Vikash 



Learning

 2 Replies

Kumar Doab (FIN)     03 March 2013

Such matters are best resolved by applying rapport, goodwill, and exceptional levels of persuasion, persistence, negotiation, reasoning skills while in employment.

She may seek appointment from good offices and submit representation followed by minutes in writing. She should build record in her favor.

If possible she should recommend her replacement from internal or external resources (in writing) and affirm to transfer the knowledge and thus display character and concern for employer. Usually the bosses in majority of the companies unwilling to share the work of outgoing employee amongst other colleagues and themselves and prefer to remain armchair managers or they do not have succession plan in place, hence the pressure.

She should remain amiable and cool and must not leave any room for company to charge her on any count.  

“she has some personal family matter to address and she is under tremedous pressure to leave the company and she has resigned”

As her bosses are interrupting, she should mention the compelling reasons in notice of resignation addressed to good offices of appointing authority, MD, Chairman, Company secretary, and mention notice period, effective date of resignation, last day in office in notice and affirm that she is willing to handover the charge/company property within and up to last day in office and routine duties may be assigned to him which can be completed within and up to last day in office i.e. dated…..and good offices should ensure that all exit formalities are completed within and up to her last day in office.

 

“but her bosses not ready to relieve her before 90 days whereas the offer letter says 90 days notice period is not absolute  may or may not be buyable by the company. and can be relieved even before basd on the circumstances.”

If she has explained her circumstances that should suffice, and in case she is not able to complete the notice period as stated in appointment letter the only penalty she is to bear is tender notice pay which should ideally be Basic+ DA as the employer would disburse OT, Bonus, Gratuity, paid leave at this rate.

She may affirm that notice pay may be adjusted in FNF statement/settlement.

Or she may supply the cheque of notice pay to the company and demand acknowledgment and to reduce the amounts in FNF statement by notice pay subject the FNF amounts to tax treatment after reduction.

Many companies do not agree to adjust the notice pay in FNF statement and if next employer is buying the notice period employee would be subjected to double taxation.

She may submit reminders for supplying the acknowledgment of notice of resignation, acceptance of notice (not resignation), work experience/service certificate/relieving letter, correct FNF statement, payment of FNF dues by bank DD only, Form 16 as per correct FNF statement, attested copies of PF forms for transfer of PF etc…..by her last day in office.

On last day she should submit final resignation quoting reference of notice of resignation and subsequent reminders and demand acceptance and other docs to be supplied by redg. post only. She must handover the charge and company property under acknowledgment.

Charge is handed over to HOD/reporting authority, or an employee designated by good offices. Having affirmed she has completed her side of obligation for proper relieving.

 

IT/ITES companies are covered by SE Act of the state.

In some states IT companies were granted blanket exemption from IESO Act, vide the respective IT Policy of the state.

Some stated have ended this exemption e.g. Karnataka.

Thus in some states IT companies have to frame their standing orders and get these certified from certifying authority which may be DLC in the state. Till the standing orders are certified model standing orders shall apply. You may check the status from o/o Labor Commissioner (DLC) or SE Inspectorate in Delhi/AP. The contact details would be available at Dept. of Labor website.

The service conditions in the standing orders can not be negated to employee in appointment letter and standing orders shall prevail. Standing orders should be displayed on notice board and certified copy should be made available to employee on demand of employee against a nominal payment of say Rs.10/

Model Standing Orders:

13.    Termination of employment: (1) Notice period is 1 month or 2 weeks if permanent….

(2) Notice period is not applicable in case of probationer/temporary ….

16.  Certificate on termination of service.--Every permanent workman shall be entitled to a service certificate at the time of his dismissal, discharge or retirement from service.

 

NOTE. - There is a provision under this Act for issuing a service certificate at the time of  dismissal, discharge or retirement and every person is entitled to take such certificate.

17.    Liability of 17[employer].—

18. Exhibition of standing orders

SE Act Delhi:

30. Notice of Dismissal: (1) No employer shall dispense with the services of an employee who has been in his continuous employment for not less than three months

(Implying notice period is NIL if service is for les than 3 months)

(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 at Delhi are covered by section 30(1) of Delhi Shops and Establishments Act, 1954

 

(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.

(Thus notice period of 90 days kept by employer may be claimed as violation of the act and hence void to that extent as per SE Act of Delhi)

 

SE Act AP: ( The provision is interesting)

47. Conditions for terminating the services of an employee, payment of service compensation for termination, retirement, resignation, disablement, etc., and payment of subsistence allowance for the period of suspension :-

(3) Every employee who has put in a continuous service of not less than one year shall be eligible for service compensation amounting to fifteen days average wages for each year of continuous employment, (i) on voluntary cessation of his work after completion of 60 years of age, (ii) on his resignation,

 

Kindly obtain the latest version of Model Standing Orders, SE Act from Dept. of Labor/SE Inspectorate or purchase from market.

Majority of the companies state in appointment letter that jurisdiction of the courts shall be at HO of the company so in case of any dispute which is to be contested  under SE act, employee may choose wisely between his location or company’s location.

If nothing works approach a competent and experienced labor consultant/service lawyer and lawyer would know how to handle the matter.

Valuable advice of learned experts/members is sought.


Attached File : 293121941 delhi shops & establishments act, 1954.pdf, 293121941 model%20standing%20orders.doc, 293121941 se act ap.doc downloaded: 216 times

CA. Vikash Dwivedi (Chartered Accountant)     05 March 2013

Many Thanks Kumar sahab for your swift and detailed reply.


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