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tulasi (Head HR)     21 November 2010

Change of notice period amount from Basic salary to CTC.

Dear Experts My company is planning modify the recovery of notice period amount for Basic +DA to CTC.Our notice period is 90days. As per proposed system, If any employee likes to leave the organization before 90 days he has to pay notice period amount as CTC after adjusting the Earn Leaves. The CTC amount consists of Basic salary, DA and other allowances like HRA, Personal allowance, Conveyance, Food coupons, Education allowance, CCA, Production Bonus, LTA. Medical, Gratuity, PF, Super Annuation. Legally notice period recovery as CTC amount is allowed? If it is allowed, is Earn Leaves encashment also to be considered as CTC amount? Does recovery of CTC have any legal issue? If it is not allowed, apart from Basic + DA what other allowances can be considered in the notice period recovery amount. Legal / HR experts are requested to guide. sagar


Learning

 3 Replies

Avinash Kumar Sharma (Sr. Manager HR)     22 November 2010

Dear Sir,

Notice period condition comes under the contract of job which is between employer & employee and both can agree on the terms which are not unresonable as given in Indian Contract Act. But condition of CTC should be applicable on both sides. But I am also not clear on inclusion of EL encashement in CTC so I request other members of this forum to give their valuable advice.

Thanks,

Avinash Kumar Sharma

Email- avinash9032@rediffmail.com    


(Guest)

You need to take out a notice under Model code act.  To make a proposed change. This notice has to be sent displayed on the notice board of your company in two languages (One of them must be a Local Language). Further you need to  make 6 copies of proposed changes and send the same to Labour commisioner. Upon the receipt of these copies THE LC will send it to the union or employees of your company and record the objections of the opposite party. Then you will be asked to remove the objections. Once both the parties are satisfied with the Rule. He will approve the same and then you will be allowed to make the changes.

What ever changes you make without following the above rule can be proved null and void in the court of law. As while taking a new employee you will not be giving him appointment letter you shall be giving him an offer letter and appointment letter will be given after the joining. So once he has joined your company he has lost all the barganing power and as Per the IC ACT. the contract will not be valid because it is in between two unequal parties.

In my view the Notice period should be Basic + DA not other things.

Regards,

Vivek

Kumar Doab (FIN)     22 November 2010

The companies make amendments, in their favor   :

1.When attrition is high.

2. When high number of employees are to removed/replaced.

In case you are not satisfied with the amendments you reserve the right to raise your concerns. 

If you do not it shall be deemed to be acceptable to you.Moreover your company shall ask you to sign in the copy  on the dotted line and your superiors and HR may peruse for your acceptance.

It is in your interest to write your concerns to your appointing authority/MD/person who has signed the amendment and obtain  acknowledgment, on the copy.

You can deposit your communication at the reception/central location of your office where all communications/letters are received by one employee under seal of the company and are entered in the register and forwarded to the concerned employees.

At a later stage when you leave the company you reserve the right to cite discrepant amounts in your F&F. 

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