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Craigplvenkat (Senior Manager-Finance)     16 July 2012

Notice period

Dear All,

I have taken up a senior position in a Company with a six month notice period on either side.  I have resigned from the company w.e.f 01.06.2012 and requested the company to relieve me after closing hours on 30.11.2012.  The MD of the company, in his letter of acceptance of resignation stated that the company will relieveing me on 30th November, 2012 but in case they get any replacement  the company will relieve me earlier with due notice period pay.  Now I am being offered a job in my home town and the new company cannot wait till november and hence I have writted to my MD to relieve me by 31st August, 2012 and I will inturn pay the company the 3 months notice period pay.  The Company is adamant and says that it will relieve me only after 30.11.2012 and not earlier.  I have replied stating that when the company has opted to relieve me at any early date if it gets replacement, then as an employee I have tne right to get relieved if I get any job.  Please advise on the legal implications

VENKAT



Learning

 10 Replies

Kumar Doab (FIN)     16 July 2012

If your appointment letter has a clause on notice pay in lieu of notice period you may opt to tender notice pay and ask the company to adjust it in FNF statement.

You may go thru SE Act applicable to your state and if you are covered under explanation of employee under the enactment you may cite it. You may obtain standing orders of the company, employee rule book and HR policy applicable to your designation/position. In any case you are tendering 2 month's notice which is not abrupt termination. 6 months notice period is a very long period. How does company justify it?

If you can recommend some trained replacement internal/external, suitable to company MD may relent.

Good companies do have succession plan.

Craigplvenkat (Senior Manager-Finance)     17 July 2012

Thanks for the prompt reply.  The MD has a sadistic attitude towards anybody who leaves the company and has stated that they are betrayers.  He himself has joined this company after quiting his earlier company.  My appointment order does not specify the pay in lieu of notice period.  It just says that six months notice has to be issued by either side.  In his acceptance of resignation letter he has stated that he could relieve me earlier if he finds any replacement for my post.  I am going by the norm that if he has stated that he could relieve me earlier then I could also buy out my notice period if I get any job.

Another fact is that not many are interested in joining this company as his reputation is known in this industry and as many as six candidates had sent their resume thru head hunters and on hearing the company's name they backed out. 

As advised by you, I will refer the standing orders in this state.  We are about seven management executives serving in this company and we have standing orders for workers and staff but I have not come across any standing orders for the management cadre.

I have requested him to releive me on 31st August, 2012 on 12th July, 2012 stating very clearly that I will settle my balance car loan, repayment of annual allowances(pro rata) and the notice period monies well before the date of leaving i.e. 31st August, 2012.

Please advise and thanks again for the prompt reply.

Kumar Doab (FIN)     17 July 2012

In your case, you are initiating termination by tendering 2 month's notice (which is not abrupt termination, as 2 months notice is reasonably good notice) the date of termination is to be decided and notified by you, which you have. Company can ask for notice pay compensation which otherwise is not mentioned in employment contract. In your case you on your own have generously offered to tender notice pay.

If next employer is buying out the notice period you may avoid tendering notice pay in cash/by cheque-DD to current employer or you shall be subjected to double taxation. You may ask the current employer to adjust notice pay in FNF statement and supply the correct FNF statement to you, and affirm if any amount is payable at your end as per correct FNF statement it shall be paid by you. You may affirm this in your notice of resignation itself or in subsequent reminder(s).Current employer shall encash paid leave/ bonus/incentive/performance pay etc (if any) and adjust notice pay. You may ask to adjust notice pay @ basic + DA and all other payables in FNF statement as company shall issue form16 as per FNF amount.

In case you do not serve the notice period your liability at the most should not be more than tendering notice pay @ basic + DA.

 

You may mention that company may ensure smooth exit formalities, inform you in writing to whom you should handover the charge, company property, and payment of your dues by bank DD and acceptance of resignation, work experience/service certificate, relieving letter, form 16, attested copies of PF withdrawal/transfer forms (as suitable to you), NOC/NDC, FNF statement etc be handed over to you by your last day in office.

You may mention that as you have notified last day in office routine work may be assigned which can be completed within and up to last day in office. Complete all tasks and assignments and do not leave any room for company to charge you on any count including loss due to termination of contract.

Since you are tendering notice your date of retirement is notified to employer and ideally employer should pay gratuity ( if you are eligible) on its own vide FNF statement/settlement however you may submit Form I under acknowledgment to appointing authority and a copy to Controlling Authority under acknowledgment, which might be ALC in your case.

If your establishment is covered under SE act and you fit into the explanation of employee under the enactment, you may refer to Se act applicable to your state.

If image of MD is so bad that company is not able to attract talent, workforce, you can not be penalized for that. However as MD has stated, that he could relieve me earlier if he finds any replacement for my post, you may prepare your defense and do not leave any room for any charge including loss due to less notice. 

You may approach a competent and experienced service lawyer with all records and give inputs in person and proceed under expert advice.

The Delhi Shops and Establishments Act, 1954

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.

Kumar Doab (FIN)     18 July 2012

You have posted that;

"The MD of the company, in his letter of acceptance of resignation stated that the company will relieveing me on 30th November, 2012 but in case they get any replacement  the company will relieve me earlier with due notice period pay."

You may observe it from point of view suitable to you:

--It is a written statement from highest office and can not be denied. Hope this shall provide you the relief from company.

--The good and highest office has declared notice pay can be tendered in lieu of notice.

--If you tender 6 month notice as per appointment letter and company accepts it before effective date/last day in office you can term it illegal and claim notice pay for balance period as you are rendered jobless and without sore of livelihood. Or simply company should buy out the notice period as it is installing some new employee in your place.

Craigplvenkat (Senior Manager-Finance)     18 July 2012

Dear Sir,

The MD of the company in his acceptance letter states that I will be relieved on 30th November, 2012 as per the terms and conditions of the appointment order and adds as follows: however if the company finds any suitable replacement earlier then the company would relieve me earlier after proper handing over process to the new person takes place.  As committed to the company I have yesterday closed my car loan and put up the relevant forms for his signature which he has put on hold till 1st August, 2012 the day on which he wants to sign the hypothecation cancellation papers.

Please advise

Kumar Doab (FIN)     18 July 2012

Employer has to have a succession plan, designate the replacement internal or external.

Look into SE act applicable to your state e.g.and its applicability to your establishment:

The covered establishments display registration at the entrance.

 

1[The Bombay Shops and Establishments Act, 1948]1

2[Bombay Act No. LXXIX of 1948]2

7[(6) "Employee" means a person wholly or principally employed, whether directly or through any agency, and whether for wages or other consideration in or in connection with any establishment; and includes an apprentice, but does not include a member of the employer's family;]7

66.7[Notice of termination of service.- No employer shall dispense with the services of an employee who has been in his 7[continuous employment -

(a) for not less than a year, without giving such person at least thirty days' notice in writing, of wages in lieu of such notice:

(b) for less than a year but more than three months, without giving such person at least fourteen days' notice in writing, or wages in lieu of such notice:

Provided that such notice shall not be necessary where the services of such employees are dispensed with for misconduct. ]7

Notice for employer and employee should be the same.

Whenever you submit any document obtain acknowledgment on the copy even if it has to be from reception/desk where all mail is received, or submit by registered post.

For car loan papers you may build record even if you have to send an email with a copy to your personal email id.

VINEET (MANAGER)     06 March 2013

 I was working in a company as a Manager. Due to non payment of the salary from last 4 months ,i resigned from my post because seniors were harrasing and asking to work without salary . i was interested to serve notice period as per as appointment letter and send a mail on the same asking for my last working date. But without any information the company has cancelled my notice period. Nor they are providing me the cash in leiu of the notice period also they are not responding on my mail. The salary  issue of the employees also  published in newspaper .

Now pls suggest what to do ? 

Vineet

Kumar Doab (FIN)     06 March 2013

@ Vineet,

Kindly always start a new thread.

You have posted that:

--‘ Due to non payment of the salary from last 4 months ,i resigned from my post”

This renders the company unworthy of being employed with.

Employee should draft notice of resignation carefully and as in your specific case employee may state the compelling reasons leaving no other option but to separate.

Employee may conclude the incidence as misconduct on part of company, failure to fulfill contractual obligations by the company to pay wages in time, provide decent working conditions.

You may mention that you are facing extreme financial hardships and are not able to fulfill your personal, social, family responsibilities due to non payment of your earned wages, and can not continue.

“ because seniors were harrasing and asking to work without salary .”

No one can resort to coercion, rudeness, pressure, intimidation at work place.

Who are these seniors: proprietors, HR, or superior managers in line management?

Employee must record such transactions (audio/visual) and keep witnesses.

You may not be alone. Hence each employee suffering must agree to be witness to each other.

Have you lodged a complaint in writing under acknowledgment?

Employers burn extra energy to drill and convince the employee that he/she is not a workman and can approach a lawful authority, and he/she does so he/she shall be branded a litigant.

The fact is employee should work for such unscrupulous employers and should quit at once if wages are not paid. By working without wages you have compiled and increased your loss every month.

--“ i was interested to serve notice period as per as appointment letter and send a mail on the same asking for my last working date.’

The separation/termination is initiated by employee (you), and employee should mention notice period/effective date of resignation/last working day-date in office in notice of resignation. Preferably notice may be supplied by redg. post under acknowledgment.

--“ But without any information the company has cancelled my notice period.’

Do you mean that company has accepted your resignation before expiry of notice period?

If yes has it mentioned any reason in its acceptance?

Has the company leveled any charge on you?

Company can not accept the resignation before the date of retirement mentioned by employee.

Supreme Court of India

Nand Keshwar Prasad vs Indian Farmers Fertilizers ... on 1 April, 1998

‘11. After giving our careful consideration to the facts and circumstances of the case, it appears to us that the law is well settled by this Court in a number of decisions that unless controlled by condition of service or the statutory provisions, the retirement mentioned in the letter of resignation must take effect from the date mentioned therein and such date cannot be advanced by accepting the resignation from an earlier date when the employee concerned did not intend to retire from such earlier date. It has also been held by this Court that it is open to the employee concerned to withdraw letter of resignation before the same becomes effective.”

You may term the decision of the employer as bad and request to allow completing the notice period and mentioning that you have tendered notice of resignation due to non payment of wages and during the notice period you will hunt for another venture.

You may submit reminders for supplying the 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…..

--“ Nor they are providing me the cash in leiu of the notice period also they are not responding on my mail.’

The purpose of notice period kept by employer is that if employer wants to terminate the employee, employee can fix up his next venture and if no notice period is given employer shall compensate by paying a penalty of notice pay.

In your case employer needs to give notice pay.

--‘ I was working in a company as a Manager.’

Designation alone does not decide employee is a workman or not.

Your lawyer shall ask you a set of structured question and may opine that you fall within the category of workman.

What is your establishment a commercial or Industrial Establishment?

Has your company framed its standing orders? The term Industry does not mean factory alone. The Standing Order Act is applicable to all establishments to which the Payment of Wages Act, 1936 applies.

If company has not framed its standing orders model standing orders shall apply.

The service conditions in the standing orders can not be negated to employee in appointment letter and standing orders shall prevail.

You may go thru the provisions of the enactment:

{ Industrial Employment (Standing Orders) Act, 1946

 

SCHEDULE IB : Model Standing Orders on Additional items Applicable to all Industries

1. Service record

Matters relating to service card, token tickets, certification of service, change of residential address of workers and record of age.

(ii) Certification of service : (a) Every workman shall be entitled to a service certificate, specifying the nature of work (designation) and the period of employment (indicating the days, months, years) at the time of discharge, termination, retirement or resignation from service;

Model Standing Orders:

11.  Payment of wages.--(

13.    Termination of employment:

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.

 

Delhi Govt. Labor website:

Industrial Employment (Standing Orders) Act, 1946

16.

Certificate on termination of service.-

 

Every permanent workman shall be entitled to a service certificate atthe time of his dismissal, discharge or retirement from service.

 

 

17.

Liability of 1[employer].-

 

The 1[employer]of the establishment shall personally be held responsible for theproper and faithful observance of the standing orders.

 

 

20.

Service certificate.-

 

Everyworkman who was employed continuously for a period of more than threemonths shall be entitled to a service certificate at the time of hisleaving the service of employer.

 

 

22.

Exhibition and supply of standing orders.-

 

Acopy of these orders in English and in the regional languages of thelocal area in which the mine is situated shall be posted at themanager's office and in such other places of the mine as the employermay decide and it shall be kept in a legible condition. A copy of thestanding orders shall be supplied to a workman on application, onpayment of a reasonable price. A trade union in the establishment will,however, be entitled to the free supply of a copy of the standingorders, provided the union is one which is recognised by the employer.

}

Another option is to seek remedy under SE Act of the state which does not indiscriminate between a workman and non workman and is applicable to all employees.

e.g.:

SE Act Delhi:

SE Act Delhi:

19.  TIME AND CONDITIONS OF PAYMENT OF WAGES.

20.  DEDUCTIONS WHICH MAY BE MADE FROM WAGES.

21.  CLAIMS RELATING TO WAGES.

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.

41.  WILFULLY MAKING FALSE ENTRIES.

43.  DETERMINATION OF EMPLOYER FOR THE PURPOSE OF THIS ACT.

 

You may also proceed under Payment of Wages Act:

2. Definitions.-

3*[(vi) "wages" means all

(d) any sum which by reason of the termination of employment of the person employed

is payable under any law, contract or instrument which provides for the payment of such sum, whether with or without deductions, but does not provide for the time within which the payment is to be made;

3.      Time of payment of wages.

13A.

Maintenance of registers and records.

5*[13A. Maintenance of registers and records.-(1) Every employer

shall maintain such registers and records giving such particulars of

persons employed by him, the work performed by them, the wages paid to them, the deductions made from their wages, the receipts given by them and such other particulars and in such form as may be prescribed.

(2) Every register and record required to be maintained under this section shall, for the purposes of this Act, be preserved for a period of three years after the date of the last entry made therein.]

15.

Claims arising out of deductions from wages or delay in payment

Of wages and penalty for malicious or vexatious claims.

16.

Single application in respect of claims from unpaid group.

 

If employer does not provide relief to your gentle representations ( avoid quoting any judgment) you may 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 : 720902697 model%20standing%20orders.doc, 720902697 payment of wages act 1936.pdf, 720902697 delhi shops & establishments act, 1954.pdf downloaded: 203 times
1 Like

VINEET (MANAGER)     08 March 2013

@kumar

Dear Sir,

Thanks a lot !! Non paymenet issue has been published in the newspaper just few days back. and labour commissioner of the respective state set an enquiry for the same.Few points i want to elaborate once again which i missed earlier.

1- After the resignation i want to serve notice period but HR didn't call or asked to me for the same.The company blocked the CRM portal  and mail id of mine without informing me. When i called HR they said that your reporting boss said that he didn't want to continue me on the notice period. As i told you my reporting boss was harassing me . I told HR that if they want to do in this manner then i dragged all of them in the court. As result today they have amended my last working date. 

2- I didn't lodge any complain but i have full evidence that i resigned because of non payment of wages also local conveyance.

3- Including me the rest employee from this branch wants to file a case to get their money back with compensation.

Now i want my money along with all the expenses with FNFS...Pls guide what to do  as you guidance is very vital for all of us.

Thanks and Regards

Vineet

Kumar Doab (FIN)     08 March 2013

Your resolve is appreciable.

After creating the noise you should prepare well.

You have posted that:

--“i was interested to serve notice period as per as appointment letter and send a mail on the same asking for my last working date.”

The language of the email should be carefully studied. If you have mentioned that you want to serve the full notice period then it is in your favor. If you have mentioned that you are resigning since you are not being paid then it is in your favor.

If you have missed anything you may narrate all representations made by you on phone, in person, by email and cover everything in one communication even if by email and escalate to good offices. Don’t miss anything and prepare a water tight/airtight case. The promoters and lawyers of the company would work extra hard to find loopholes in your communications.

--“The company blocked the CRM portal and mail id of mine without informing me.’

While you and your lawyer would claim this amounts to termination, company may not agree to it and may claim you were willfully avoiding to attend to office and work.

--“When i called HR they said that your reporting boss said that he didn't want to continue me on the notice period.”

Have you recorded it? Narrate it in writing quoting phone numbers, date, time of call and name/designation, address of HR. Build record. You may also include that your access and entry was blocked by company thru reporting authority and HR, and that HR has admitted it on dated…..

Companies usually claim that the job of employee is administrated and controlled by HR in HO.

--“As result today they have amended my last working date.”

Thus you should report to office mark your attendance and peruse the HR to mark your attendance for all previous days you could not attend office due to blocking your access and entry.

Once it is done take copies, screenshot, printouts and forward to your emailed.

--“I didn't lodge any complain but i have full evidence that i resigned because of non payment of wages also local conveyance.”

Cover it in your subsequent representations in writing.

--“Including me the rest employee from this branch wants to file a case to get their money back with compensation.”

Be witness to each other. It is time all submit representations in writing covering everything and then stick to what has been written by you.

--“Now i want my money along with all the expenses with FNFS.’

It is one of the duties of Inspector under SE Act.

e.g. SE Act Delhi:

37. Powers and duties of the Inspector.

COMMENTS

(b) Duties of the Inspector:

(i)  that in dispensing with the services of an employee the provision of the Act and Rules have been complied with and no  dues payable under the Act or Rules have been withheld;

It is also one of the duties of Labor Inspector, Wages Inspector.

In some of the states Inspector under SE Act may also be Wages Inspector.

However you may inquire from o/o Labor Commissioner or log onto website of Dept. of Labor of your state/SE Inspectorate.

It is reiterated that you may approach a competent and experienced labor consultant/service lawyer and lawyer would know how to handle the matter, effectively. All of you can share the fee. In each city there are  lawyers who practice only in labor /service law, and specialize in it and they are well known.

Valuable advice of learned experts/members is sought.


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