Notice period and buyout option
mahesh
(Querist) 30 July 2013
This query is : Resolved
Hello Sir/Madam,
I am working as a Permanent employee in Pvt Ltd IT firm. I have been working here since October 2012. I have put down my paper on 10th Jul 2013 as I got job in another firm. Notice period in my organization is 3 months. But considering my experience level no organization will wait for 3 months. Considering this I lied to new firm that notice period is 2 months. This firm is ready to wait for 2 months but my problem is my current firm is not willing to relieve me. Following are the clauses mentioned in my Offer letter regarding termination of service.
2.Termination of employment:
2.1. Either party may terminate the services with 90 days notice without assigning reasons.Notice period is meant to ensure completion of jobs already taken, transfer ongoing jobs, smooth transition and provide for time to get suitable replacement. Failing to fulfill this commitment and purely at the discretion of the employer, the employee will be required to pay to the employer, a sum not exceeding 3 month gross salary(excluding performance bonus) as was being received by the employee at the time of said notice, as compensation. In the same manner, if the employer w ants to dispense with the services of the employee, both notice period and compensation clauses apply to employer.
2.2.After notice has been given to terminate your employment either by you or by the company, the company reserves the rights to either terminate you with immediate effect or to ask you to serve the complete notice period.
2.3.Company reserves the right to terminate the services with 30 days notice on the basis of poor performance.
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I have completed all my work assigned to me but now they are re-assigning me to another project which is completely new for me.When I asked senior management about relieving me they gave me reasons as theses activities were preplanned for you etc etc.
According to offer letter I will have to serve the notice period if company does not accept my buyout option. I find this clause very unfair. Is there any legal way (any clause in employment law) using which I can serve only two month of notice period and also get my experience letter?
Regards,
Mahesh
Deepak Nair
(Expert) 30 July 2013
As per the above clause, the notice period is 3 months. But there is an option to buy out the notice period by paying the salary in lieu of the notice period.
Thus, you can serve a notice for 2 months and pay one month salary for the remaining one month.
There is no other option available for you right now, as the already accepted terms and conditions cannot be challenged at this stage. Further, it is clearly mentioned that you can buy out the notice period by paying salary in lieu of notice period. Thus your current employer cannot be termed as unreasonable. this is a universally practiced process.
Thanks.
mahesh
(Querist) 30 July 2013
Hi Deepak,
Thank you for your reply. My problem is I am ready to buyout my notice period but my employer is not ready for buyout option. He wants me to serve my notice period in any case. This is very unfair as I have completed all the activities and there is no dependency on me.
Thanks.
Deepak Nair
(Expert) 30 July 2013
You need to convince your employer.
You have an option to adopt legal action against your current employer. But, that may result in further complications, as your future employer needs your relieving letter and experience certificate. So it is advisable to sort it out amicably.
mahesh
(Querist) 30 July 2013
Even I don't want to go in that direction. I have been talking with Senior Management but they are not listening to me and keep on telling me about completing my notice period. That's why I am seeking legal advice. Please suggest me an action that I can take in this scenario. How can I force them to accept the buyout option ?
Raj Kumar Makkad
(Expert) 30 July 2013
You should immediately mail the company requesting to buyout the notice period so that you position legally may be sound on this front.
You should mention specifically the relevant clause and the date of your relieving on the basis of buyback period so that your legal battle may be fought accordingly.
mahesh
(Querist) 30 July 2013
Thank you sir.
R.K Nanda
(Expert) 30 July 2013
nothing to add.
mahesh
(Querist) 30 July 2013
Thank you all for your time and advice.
Deepak Nair
(Expert) 31 July 2013
As advised by Rajkumar Sir, give a letter to the management stating that "you are exercising the right available in clause no.__ of contract of employment/appointment letter". Understand that this is your right.
mahesh
(Querist) 01 August 2013
The clause 2.1 (for reference see the question. all Clauses are mentioned) of my offer letter does mention the buyout option but says "purely at the discretion of the employer". This was pointed out by a colleague. Does this mean my employer has right to reject the buyout option also ? Sorry for activating this post again.
Regards,
Mahesh
Deepak Nair
(Expert) 03 August 2013
Yes. Since you have signed in acceptance the employer can exercise that.
But, the same can be challenged litigation and there are many judgments in its support.
But, to avoid any such circumstances, you need to convince your management.
Deepak Nair
(Expert) 03 August 2013
Any agreement (or clause in agreement) in restraint of trade and practice is void in the eyes of law.
