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krithika   20 March 2015

Notice period buy out option

Hi,


i am working in an MNC. I am currently looking to buy out my notice period. We have very strict relieving policy where we either have to "serve 3 months notice or pay 6 months compensation to the company".  This is the stated line in my contract where the compensation is not mentioned as either basic pay or my gross pay. I have already served one month notice and am looking to buy out the remaining 2 months, my HR is telling me that I have to pay 4 months gross salary which seems quite unfair.


Can you please advice on the above mentioned statement whether I am entitled to pay 4 month gross salary or whether the basic pay alone is enough.

Thanks and Regards!



Learning

 4 Replies

SAINATH DEVALLA (LEGAL CONSULTANT)     20 March 2015

Termination of an employee is of 2 kinds.(1) Disciplinary grounds and (2) Voluntary termination. In  UR case 3 months notice should have been mandatory, but the 6 months salary repayment is quite confusing.Can U send the original agreement.

Kumar Doab (FIN)     20 March 2015

 Notice Period/pay is part of service conditions that are governed by   various enactments applicable to the establishment/employer/employee …………….and these being Act/Statue/Instrument of Law shall prevail upon any private agreement that employer has drafted and signed with employee/rule/policy e.g. appointment letter/Contract of employment/service agreement/HR policy/Service Rules and regulations etc ………………………………and any T&C that is inconsistent with enactments shall not survive.

 

 

1 (i) Have you submitted notice of resignation? How much notice period was tendered by you? Do you have its proof of dispatch and delivery also? Who has signed the appointment letter and to whom you addresses you notice of resignation? Who has declined to accept resignation and demanded compensation of 6 months? How the compensation of 6 months pay is asked to be tendered: cash/DD/Cheque…………………..and would you be getting a receipt of it or not? or it is adjusted in FnF statement and FnF statement is supplied to you?

 

(ii)                What is the notice period/pay  applicable if company initiates termination:3/6 months and at what rate Gross/basic/CTC?

 

 

You should submit Final resignation also, of course under proper acknowledgment?

 

2. Are you a member of Employee’s/Trade Unions e.g. CITU/INTUC/AITUC/BMS etc?

If not why? You should become a member and then it shall be easy to defend yourself from exploitation by unscrupulous employers.

 

What is this establishment: Commercial, Industrial? 

 

What is its line of business: e.g. Banking,IT/ITeS/BPO/KPO etc ..? 

 

3. What was your designation and nature of duties? How many people were reporting to you? Did you have any power to employ,terminate,sanction leave (or recommend ……but clarify) ,grant increment etc?

 

 

4. What was your salary: Basic,DA……..etc and total.

 

5. Was any salary slip, PF number and a/c slip of each year, ESIC card,Form16 issued to you?

 

 

6. You are located in which state? Your reporting office is located in which state and Does Company has an office at your location? Regd. Office of the company is located in which state?

 

How many person are employed in the company?

 

7. Did you get acknowledgment of notice/resignation, and acceptance?

 

 

8. Did you get appointment letter, Salary slip of all months?

 

9. You should write under proper acknowledgment that NO tasks are pending at your end and routine duties be assigned that can be completed on daily basis and within and upto expiry of notice period tendered by you……………………and to whom you should handover the charge within and upto expiry of notice period tendered by you!

 

 

10.  Is it stated in appointment letter that service conditions shall be governed by say....................HR policy/Service Rules and regulations/Employee handbook....................and do you have cop of these?

 

Better download everything and later or at any point of time the access may be blocked.

 

11. Is your next employer buying out notice period and has it stated so in writing?

 

 

You may reply pointwise to each point!

 

 

krithika   20 March 2015

 

Notice Period/pay is part of service conditions that are governed by   various enactments applicable to the establishment/employer/employee …………….and these being Act/Statue/Instrument of Law shall prevail upon any private agreement that employer has drafted and signed with employee/rule/policy e.g. appointment letter/Contract of employment/service agreement/HR policy/Service Rules and regulations etc ………………………………and any T&C that is inconsistent with enactments shall not survive.

 

 

1 (i) Have you submitted notice of resignation? How much notice period was tendered by you? Do you have its proof of dispatch and delivery also? Who has signed the appointment letter and to whom you addresses you notice of resignation? Who has declined to accept resignation and demanded compensation of 6 months? How the compensation of 6 months pay is asked to be tendered: cash/DD/Cheque…………………..and would you be getting a receipt of it or not? or it is adjusted in FnF statement and FnF statement is supplied to you?

 

Yes, I have submitted my resignation through my company mail ID. They are ready to releive me only after finding a suitable candidate. I have to buy out early because of personal reasons and if I take one day off during the notice period they are deducting 5 days pay – It makes it insanely impossible for me to continue because I need a week off to take care of my son.

 

(ii)                What is the notice period/pay  applicable if company initiates termination:3/6 months and at what rate Gross/basic/CTC?

Not sure

2. You should submit Final resignation also, of course under proper acknowledgment?

Yes I have confirmation on my resignation, via company email.

3. Are you a member of Employee’s/Trade Unions e.g. CITU/INTUC/AITUC/BMS etc?

If not why? You should become a member and then it shall be easy to defend yourself from exploitation by unscrupulous employers.

Not a member. Will definitely look into it.

4. What is this establishment: Commercial, Industrial? 

Commercial online store

5. What is its line of business: e.g. Banking,IT/ITeS/BPO/KPO etc ..? 

IT company

6. What was your designation and nature of duties? How many people were reporting to you? Did you have any power to employ,terminate,sanction leave (or recommend ……but clarify) ,grant increment etc?

 Nope, I am an executive.

7. What was your salary: Basic,DA……..etc and total.

8. Was any salary slip, PF number and a/c slip of each year, ESIC card,Form16 issued to you?

I have salary slips for all the months along with PF number. No form 16 as they don't deduct any tax for me

9. You are located in which state? Your reporting office is located in which state and Does Company has an office at your location? Regd. Office of the company is located in which state?

Tamil Nadu

10. How many person are employed in the company?

85 - 90 

11. Did you get acknowledgment of notice/resignation, and acceptance?

YEs

12. Did you get appointment letter, Salary slip of all months?

Yes, I have.

13. You should write under proper acknowledgment that NO tasks are pending at your end and routine duties be assigned that can be completed on daily basis and within and upto expiry of notice period tendered by you……………………and to whom you should handover the charge within and upto expiry of notice period tendered by you!

I have a contiual task on day to day activities which will be handed over to my peers.


14.  Is it stated in appointment letter that service conditions shall be governed by say....................HR policy/Service Rules and regulations/Employee handbook....................and do you have cop of these?

 

Better download everything and later or at any point of time the access may be blocked.

 

15. Is your next employer buying out notice period and has it stated so in writing?

No. Buying out by myself.

Kumar Doab (FIN)     20 March 2015

The condition inserted by your company seems to be violative of TamilNadu Shops and Establishments Act, Model Standing Orders……………………..and hence VOID.

 

 Download notice of resignation submitted by you and its acceptance sent by company…………….and keep it in your personal file at home.

1.      Leave or resignation is a personal matter and can be sent from personal email id.

2.      How did you inform the leave; say by phone call/email:::::and did you later submit leave application? The leave application can be submitted later after leave intimation. Employee should submit leave application under proper acknowledgment. If there is no leave application format a plain paper/email can be used. If the leave application is on line mode, the employee should download a printout.

3.      Has the company shown the deduction of 5 days salary for 1 day’s leave in salary slip? If yes it is illegal, erroneous, transgression, and you will get the refund and company can be penalized.

4.      Such companies shall be governed by TamilNadu Shops and Establishments Act. You should be covered by the def. of employee in the Act.The max. notice period as in the Act is 30 days depending upon length of service. The rate of notice pay is also mentioned in the Act. NO Inspector appointed under the Act/labor Official can violate the provisions of the Act and hence shall not agree for notice period/pay/rate of notice pay different to as explained in this Act.

5.      Leave, no. of leaves, entitlement (implying leave can’t be refused), pay during leave, deductions are also explained in the Act.The company can not provide less no. of leaves/inferior benefits ……………….however it can provide superior benefits.

6.       The reason to take care of family/son is a valid reason for leave.

7.      Is this company located in some SEZ/IT park etc? You may check with Inspector appointed under the Act/labor Officials/ Trade Unions leaders whose contact details should be available on Dept. of Labor website of TamilNadu…………………  if in Tamilnadu any exemption has been granted to such companies from the provisions of Industrial Employment Standing Orders Act or not? And if standing orders are applicable in TamilNadu ……………………….to all companies employing 50 or more employees…………………..And if standing orders have been made applicable to all establishments covered by TamilNadu Shops and Establishments Act……………………..under the provisions of Payment of Wages Act ……………by some notification.

The neighboring state of Kerala has made standing orders applicable to all establishments covered by Kerala Shops and Establishments Act……………………..under the provisions of Payment of Wages Act ……………by  notification…………………and also has covered IT  companies by Mi. Wages Act …………………………therefore no company can pay less than the wages notified by o/o Chief Labor Commissioner.

8.      If standing orders are applicable but not certified (CSO) then Model Standing Orders shall apply……………..notice period as per during Probation period is NIL and after confirmation of service it is max.30 days and rate of notice pay is also defined in it.

9.      The employees in IT sector have united in TamilNadu after lay off/Retrenchment/termination by TCS episode in TamilNadu that was widely published, and have formed unions and have affiliated with Trade Unions like CITU/INTUC/AITUC/BMS etc……………..

Hope you are aware of it.

Certainly an employee should be member of unions and be properly informed and should retain access to an able Labor Law Consultant/service Matters lawyer/law firm.

10.  If you are covered by Income tax slabs then deductor (employer) should deduct TDS and deposit.

 

Spread the awareness to the community of fellow employees and citizens.

An ill informed and Non united employee is vulnerable to exploitation.

 

If still you are unable to get relief  approach your able counsel.


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