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Different notice period for employee and employer during probation

(Querist) 31 October 2013 This query is : Resolved 
Dear Experts,

I wanted a quick opinion on the situation where my employer contract during Probation says they can terminate my services in one month. But then if I resign during probation I need to give 2 months notice. Is this fair, can a employer have such clause? I am ready to serve one months notice, but they are forcing me to serve 2 months notice.

Please advice and thanks for your help.

I am adding more details

Below are 2 different sections covered in the contract.

JOb Title and Date of Engagement

If you are a new hire to the company, you are considered to be on probation for a period of six(6) months("Probation Period") from your intial date of hire. During the first month of the probation period, if your performance is not found satisfactory, your employment may be terminated by Company with seven(7) days notice or payment in lieu thereof. From the second month of the probation period your appointment may be terminated by way of written notice of one(1) month or pay in lieu thereof

No Notice is required in cases of serious or gross misconduct. The probation period may be extended by company in its sole and absolute discretion.


Notice of Termination

The period of written notice required from either of you or company to terminate your employment is as follows: 2 months for managers ( I am a manager)

Company shall be entitled to terminate this agreement without prior notice (but without prejudice to right and remedies of company for any breach of this agreement and to your continuing obligations here under) in the event of any serious misconduct or cause. On either company or you serving notice for any reason to terminate your employment or at any time thereafter during the currency of such notice company may pay you your basic salary and any other contractual benefits payable under this contract in lieu of the unexpired period of notice and/or may require you to take paid leave for all or part of the remaining period of your employment.

I am still in probation period, so my understanding was i need to give only one months notice. But HR came and said I need to give 2 months notice. Also there is no explicit mention if I could pay in lieu of notice period. Does this mean i cannot pay and have to serve the full notice period.
Thank you once again for your help

Regards
Amit
Kumar Doab (Expert) 31 October 2013
>> Contract of employment should promote equitable discretion.

Any policy in the larger interest and beneficial to both employer and the employee has the sanction of law as otherwise it will be easily termed as arbitrary.

It is general law that whenever there is any ambiguity in terms of contract then benefit of doubt will given to party who don’t make the contract (Read Employee).



The clause as stated by you is detrimental to your interest and beneficial for employer and easily be termed arbitrary.


The company shall scream that employee is not a workman the relationship is that of Master and Servant, Specific relief Act is applicable and Contract of Personal Service can not be enforced in a court of law.



>> What is this establishment: Industrial or Commercial?

You and redg. office/HO of the company is located in which state?


Do the standing orders (certified/Model) apply to the establishment and does company have its Certified Standing Orders?
Since how long you are working with the company?


Other issues to be explored are whether you would be covered as ‘Workman’ as stated in ID Act or as ‘Employee’ as stated in Shops and Commercial Establishments Act applicable to the state?

Your labor consultant/service lawyer may ask you a set of structured question and may opine that you would be covered or not.
Designation alone does not decide employee would be covered or not.



>> Does the notice period during period of probation apply in your case……………..?

Notice period is part of service conditions and is stated in standing orders (SO: Certified/Model) applicable to the establishment and extended to the designation of the employee, statue, Appointment letter/contract of employment…………… and is also stated in Shops and Commercial Establishments Act applicable to the state.

If SO are applicable to you, the notice period stated in standing orders shall prevail upon appointment letter.

Notice period in probation period is ideally NIL as employee does not have any lien on position/appointment.

If notice period stated in standing orders is 1month it can not be 2 months in appointment letter.
If it is NIL in SO it shall be NIL in appointment letter.
Employer has to ensure faithful observance of standing orders, and responsible for it.

You may also look into clause of Notice of Dismissal in Shops and Commercial Establishments Act applicable to your state ( if your establishment id commercial and you are covered as employee as in the Act) and relate it with your length of service. It may be NIL.




>> 1Month of notice period is sufficient for the employer to put his house in order.

However while you must state in notice of resignation that no task/assignment is pending at your end as on date and routine duties may be assigned that can be completed within and up to expiry of notice period on daily basis and to whom you should handover the charge and company property (if any).



>> Are you aware of the incidences where this employer had given only 1 month of offer period to new joinees, and where it issued 1 month of notice period to employees to whom it issued notice of termination?

Employer and its HR, Line Managers are not Governor.
They are liable to ensure faithful observance of the law of the land, statues, and enactments applicable to it, sense and prudence too.


prabhakar singh (Expert) 31 October 2013
Expert : Kumar Doab!
I praise and hail you on developing the power of detailing and wish and for sure
in times to come you would be great advocate of your own kind.
My all sincere wishes are with you.
Raj Kumar Makkad (Expert) 31 October 2013
I do agree with the advice of Doab and also congratulate him like Mr. Singh.
Kumar Doab (Expert) 31 October 2013
Respected Shri Prabhakar Singh ji, Shri Raj Kumar Makkad ji,

Sir,


May I take this opportunity to thank you from the core of my heart for your kindness, affection, coaching, mentoring and guidance you have provided to all of us and also for making this forum LCI what it is today: a thumping success.


All of us that are avid readers of your posts have gained from you.

We are fortunate to have you around us.

We will continue to flourish under your wings.

May lord almighty bless you with good health, prosperity, and may you always be around to guide us.

With Warm Regards

Kumar
Rajendra K Goyal (Expert) 01 November 2013
Agree with the advise and felling (both feelings and regards expressed for seniors like prabhakar singh ji and raj kumar makkad ji.) of expert Kumar Doab ji.
Amit Dhamane (Querist) 01 November 2013
Dear Kumar Doab,
I am really thank full to you for answering my query in such detail. I really appreciate it. I have answered to your queries below:
>> What is this establishment: Industrial or Commercial?
---It pvt ltd MNC IT company
You and redg. office/HO of the company is located in which state?
---It has branches in Pune(HQ)-Maharasthra and Gurgaon

Do the standing orders (certified/Model) apply to the establishment and does company have its Certified Standing Orders?
---I am not sure about this, how do I find this information.

Since how long you are working with the company?
---3 Months

Other issues to be explored are whether you would be covered as ‘Workman’ as stated in ID Act or as ‘Employee’ as stated in Shops and Commercial Establishments Act applicable to the state?
--I am referred to as employee, and this is part of employment and Confidentiality agreement. How do i find this information?

Your labor consultant/service lawyer may
ask you a set of structured question and may opine that you would be covered or not.
Designation alone does not decide employee would be covered or not.
--Ok.


>> Does the notice period during period of probation apply in your case……………..?
---I have added details as part of the question, I think it would apply but only for one month. Please let me know if my understanding is correct

I am again copying, the clauses from my employment agreement.

Below are 2 different sections covered in the contract.

JOb Title and Date of Engagement

If you are a new hire to the company, you are considered to be on probation for a period of six(6) months("Probation Period") from your intial date of hire. During the first month of the probation period, if your performance is not found satisfactory, your employment may be terminated by Company with seven(7) days notice or payment in lieu thereof. From the second month of the probation period your appointment may be terminated by way of written notice of one(1) month or pay in lieu thereof

No Notice is required in cases of serious or gross misconduct. The probation period may be extended by company in its sole and absolute discretion.


Notice of Termination

The period of written notice required from either of you or company to terminate your employment is as follows: 2 months for managers ( I am a manager)

Company shall be entitled to terminate this agreement without prior notice (but without prejudice to right and remedies of company for any breach of this agreement and to your continuing obligations here under) in the event of any serious misconduct or cause. On either company or you serving notice for any reason to terminate your employment or at any time thereafter during the currency of such notice company may pay you your basic salary and any other contractual benefits payable under this contract in lieu of the unexpired period of notice and/or may require you to take paid leave for all or part of the remaining period of your employment.

I am still in probation period, so my understanding was i need to give only one months notice. But HR came and said I need to give 2 months notice. Also there is no explicit mention if I could pay in lieu of notice period. Does this mean i cannot pay and have to serve the full notice period.
Thank you once again for your help



Once again Thank you all for advice provided.

Regards
Amit
C. SANJEEVA RAO (Expert) 02 November 2013
Mr. Kumar Doab had given elaborate reply and answer to Mr. Amit, and from the reply it understands the vast knowledge what he had possessed which is appreciable one.
Kumar Doab (Expert) 02 November 2013

You have modified your first post after writing your last post.You should not do it.Post as many new posts you want.


You have not stated you are located in which state?


>> Probably 3 months is too short a period for the employer and employee to separate.

This seems to be the bone of contention.


>> The T&C quoted by you in your last post are conflicting as noticed by you also.

The correct notice period seems to be 1 month however by verbal transactions by HR you are being pressed for 2 months……………………. The conduct is apparently bad.

The employers are known to insert clauses in appointment letter/contracts although they are aware these may not stand the test of law.

The employers bank on the facts that employees are fearsome, ill informed, are not united and can be subdued.



Equitable discretion should apply. The contract of employment should not keep employee at inferior position and employer at superior position. Such contract can be easily termed unfair. This should explain the provision of notice pay in lieu of notice period to employee also.

This should be sufficient for you to proceed further in your matter.


It has been discussed that what would be the options if standing orders, ID Act, Shops and Commercial Establishments Act are applicable to you.


In absence of coverage under these enactments, the notice period should be as per advertisement calling for job applications, letter of appointment, employment agreement service rules…………………..

If the task of the employee that has resigned are not properly handed over due to which employer may suffer financial or some other loss and the employee is unwilling to indemnify the employer then the employee may ask the employee to serve full notice period.

You have already been advised in previous posts to affirm in notice of resignation/subsequent communications that no task is pending at your end and you are willing to handover the charge and notice period during probation period as stated in appointment letter issued to you is more than sufficient for handover of the charge.

You may add that as per current responsibilities, designation assigned to you can handover the charge in …………………….days (say 2 days).


The notice period of 1 month that you are willing to serve is sufficient and reasonable for proper handover of the charge and employer can put his house in order hence employer should not be crying that it would be suffering any loss.



>> The notice pay is as per exit clause of the appointment letter.
It is a compensation given by one party that has breached the contract to other party because of the breach of contract (Indian contract Act 1872; Sec73…….. declaratory of the common law as to damages).

The basic purpose of damages is to put party whose rights have been violated in the same position, so far as money can do so, as if his rights have been observed. When compensation sum is named in a contract as the amount to be paid in case of breach then it is know as liquidated damages e.g. in the employment contract. When it damages are not given in contract then it known un-liquidated damages and will be defined by court on the bases of reasonableness and facts of the case.
The facts of your case indicate that notice period applicable during period of probation is 1 month as per appointment letter issued to you and act of HR is transgression thus misconduct on the part of this HR employee……………………………..hence there can be no un-liquidated damages…………..


Another view point is that while the employer has kept the provision of liquidated damages max. to the amount of notice pay it if initiates the termination……………….And it has not keep the similar and equal amount of liquidated damages if employee initiates the termination……………………


This points to bluff, mischief and malafide……………………


The courts of law are quick to sense the mischief and malafide and may become harsh on employer………………………..

The action of HR also points to rowdiness of bosses and employer in the office and courts of law have been issuing scathing remarks/observations/comments on rowdiness in offices………………

This turns employer as unworthy of being employed with.



>> The company has stated in appointment letter that “company may pay you your basic salary and any other contractual benefits payable under this contract in lieu of the unexpired period of notice”
The supreme court of India has decided in many judgments that resignation can not be accepted before the expiry of notice period issued by employee……………..hence this clause can be termed illegal and unenforceable………………..



>> The contract of employment is so crafted that it shall keep the employee of edges as the employee has to keep another employment ready after 1 week then after 1 month since employer can terminate the employee by notice or notice pay in lieu of notice period in such period.

This shows that the employee that has left previous employment to join this employer can be on road at any time……………..



>> The next employer (even this employer in case of new joiners) may ask you to join in 7/15/30 days…………………
Therefore 2 months notice period that this employer thru its HR is demanding may cause you loss of next opportunity and now it is inconvenient to continue in present job since you have resigned and HR of the employer is resorting to tactics and has become unfair.


>> Although you have quoted from a portion of appointment letter/contract of employment while you visit your lawyer in person you may show in full the job advertisement, interview call letter, selection letter, offer letter, appointment letter/contract of employment, standing orders applicable to the establishment, service/confidentiality/Non disclosure agreement, HR policy, service rules, exit/severance policy etc …………………… The lawyer that has seen all of your docs can advice you the best.

Your lawyer can find loopholes and faults and turn the situation in your favor.

Many of the seasoned labor consultants would draft/structure each communication to be submitted by employee and keep it in their file and gradually build a favorable/irrefutable evidence and winnable case.


>> Given below is a heartfelt opinion. Let your lawyer’s advice be final.

The contract pf appointment/appointment letter is crafted by employer and employer is well versed with it and it and its HR, Line Managers are properly trained and know it in and out

They have started resorting to verbal transactions and you would end up either writing to them now or later. It is sensible to put each transaction on written record and call the bluff of HR.


>> First of all try and obtain concurrence in writing that you can tender notice pay in lieu of notice period.

Second: in notice of resignation submitted by you or by a subsequent communication clarify that you wish to serve the full notice period applicable to you during period of probation.

If at all while this appointment letter was being issued to you it was stated to you that the conditions stated at clause umber…………………… apply equally to both employer and employee, then if required at an appropriate time you may quote it.

Hope you can read between the lines.

Employers are known to insert in appointment letter that managements’ interpretation shall be final. Let the employer supply its private interpretation in writing to you on the T&C inserted by it in appointment letter crafted by it.



>> You have posted that:

----“During the first month of the probation period ………………………………your employment may be terminated by Company with seven(7) days notice or payment in lieu thereof.” (It is mentioned here that BY COMPANY)

----“From the second month of the probation period your appointment may be terminated by way of written notice of one(1) month or pay in lieu thereof” ( It is explicitly NOT mentioned here that BY COMPANY)“ This shouild imply either by you or by company.


----“Notice of Termination

The period of written notice required from either of you or company to terminate your employment is as follows: 2 months for managers ( I am a manager)” { This should be applicable post expiry of probation period of 6 months( which can be extended) as from 2nd month of probation period till end of probation period ( i.e. till confirmation of service by company) the notice period/notice pay in lieu of notice period is already inserted in the contract i.e. 1 month.

The appointed letter/contract of employment is issued to you in your name and is signed by employer and employee and it is a bilateral agreement.

----“But HR came and said I need to give 2 months notice.”

If it is so then why previous clauses citing 7days/30 days notice have been inserted?

This is a verbal statement which is not issued to you on record in writing. However it does not mean that the verbal communication issued by HR is not place on record by HR in writing in his communication to his superiors that issued orders to this HR to establishment contact with you. The comments and report of this HR for sure have been inserted in your personnel file.

This meeting has already become a matter on record.

The question arises how come HR has construed it as 2 months. The HR has not related it with the clauses stated in the appointment letter, in writing.


Has the employer issued any corrigendum to appointment letter, service rules and was accepted by you? For the change in service conditions employer should supply proper notice to employee and employee can accept or reject the change without any prejudice to his rights.



Moreover by the single minded statement of this HR or his superiors thru this HR or your employer thru this HR has become a matter of interpretation and debate that can be decided only as per agreed T&C of the contract and in relation to the law of the land that is applicable to contract of employment or employment or employee and employer.

Since you are being adversely affected and aggrieved you have to initiate and ask for written interpretation………………..by letter thru redg. Post,

You have the option to place your report by way of minutes of discussion in writing.

The resignation, job application are personal matters and can be communicated from personal email id as well and if company objects to it you may communicate by letter thru redg. post. under acknowledgment or submit at reception where all mail/dak is received with acknowledgment by seal and signature on your copy.

.HR is not your employer. HR at the most would be an employee deputed by your appointing authority, MD to handle the jobs assigned to HR. Company may at the most claim that HR was a reporting authority. HR is expected to deny to implement unlawful unfair instructions of it masters in the company.

HR is fully responsible for its unlawful, illegal deeds.

Authority comes with responsibility. If HR is making verbal statements then it is bound to issue on paper as well.


You may demand that this HR must issue minutes of its discussion with you, to you in writing and confirm whether these minutes/reports of HR are inserted in your personnel file or not and you may be allowed to examine your personnel file.


You may address and supply all of your communications to good offices of appointing authority, MD………………. And request to reply in writing by letter thru redg. post. If they still resort to reply by HR thru official email id you may download and print copies as it is your personal matter and also is a mater of record.


1. The IT/ITeS/BPO/KPO companies are covered under Shops and Commercial Establishments Act of the state where these are located.

This enactment being state subject each office of the company should be registered in its respective state.

Vide the IT (Information Technology)/SEZ policy of the state, the states might have given some exemptions to IT/ITeS companies and huge number of incentives too, to promote the arrival of IT/ITeS companies in the state.

Most common of these exemptions are exemption from open and close hours clause of the Shops and Commercial Establishments Act (the companies claimed that it is a continuous process) and relief under ‘Essential Services’ so that the strikes do not interrupt the work.

If you are located in Maharashtra you may look into Bombay Shops and Commercial Establishments Act (which is so employee friendly that it applies Standing Orders to all establishments employing 50 persons………. )



And if you are located in Haryana you may look into Punjab Shops and Commercial Establishments Act (Haryana follows Punjab Shops and Commercial Establishments Act).

The policies and Act mentioned here are available at the website of the respective state governments and also the Dept. of Labor website of the state, and shall be available with your labor consultant/service lawyer and can be purchased from market.



2. “Also there is no explicit mention if I could pay in lieu of notice period. Does this mean i cannot pay and have to serve the full notice period. “

Since company can tender notice pay in lieu of notice the equitable discretion should apply to you as well and that too @ Basic pay.


Another view point can be that if there is no notice pay that can be tendered by you then what cost/liquidated Damages Company has fixed in case notice pay is not the amount to be paid by you if you are unwilling to serve the notice period? Has it been inserted or stated in the contract of employment? Is it stated that such damages/cost shall be informed by the company at the time of resignation to employee that is unwilling to serve the notice period?


By what terms and by which cost employer wants the employee to indemnify the employer if employee does not want to serve the notice period?

Here the employee is not unwilling to serve the notice period.

Assuming that the notice period is 2 months and employee wants to serve only 1 month,
then in what sense and by what means and by which cost employer wants the employee to indemnify the employer for the shortfall of 1 month? This is to be stated by employer in writing promptly on the receipt of notice of resignation………………..


The question arises what precisely is to be done by the employee during the notice period?
Obviously it is to complete the tasks/assignments/projects on hand and complete the handover of charge/exit formalities.

This process and schedule for the same is to be stated by employer in writing promptly on the receipt of notice of resignation………………..


If the employee has tendered notice of resignation then employer is duty bound to issue a communication in writing what exactly it expects from employee?


Here the employer himself or tactfully thru his HR or HR by himself/herself is demanding to tender notice period/pay of 2 months which does not seem to be the right notice period/pay as per the contract of employment drafted and signed by employer.

Therefore you should address your concerns to good offices in writing and demand reply in writing.



Employee should start building the record from the time of writing job application and should build sufficient and favorable record in writing on files during employment and should structure notice of resignation carefully. The skills can be acquired. The employee should retain access to a competent and experienced labor consultant/service lawyer.
Employees should form communities, unions, guilds, IC’s……………….and thus get power and leverage to negotiate.

The employee in your trade in Karnataka, AP, West Bengal united, formed unions and have done a good job.

It is reiterated that you may approach your lawyer and proceed under expert advice of your lawyer.


Amit Dhamane (Querist) 03 November 2013
Dear Mr.Kumar Doab, Thank you for detailed reply. The company is based out of Pune (Maharasthra) and is registered there.

Once again thank you for your response and happy Diwali. I will consider approaching lawyer once I get the response from them.

Regards
Amit
Raj Kumar Makkad (Expert) 05 November 2013
*Mr. Doab! I am indebted by reading your words and respect provided to me and Mr. Singh.

Immense knowledge over subject along-with respectful attitude towards elders shall definitely make you an asset for the Nation.

I always pray God to provide all happiness in the life.
Kumar Doab (Expert) 05 November 2013
Sir,

I am humbled.

I am touched and moved by your gentleness and politeness.

Your wishes are blessing showered on the days of auspicious festivals.

I pray to lord almighty that we all be guided and mentored by seniors and elders like you and Shri Prabhakar Singh and the supreme power in heavens bless you with good health, happiness, prosperity.

May god provide us the good sense to sit at the feet of masters and learn and remain gentle.


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