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Arun G. R   25 February 2021

Notice period buyout -basic or gross salary?

Hello Sir/Madam,

                             I have been working in a Software company from Nov 2016- Till date as a QA Lead. I was due for promotion during March 2020, due to covid 19 the management said I would get my promotion in the month of July. during the month of December 2020 when I spoke to the management, they informed me that they don't need my services as the team is getting optimised and I can start searching for a job in the market. Now that I have got an offer, they are asking me to serve the complete 60 days notice period. I am ready to serve 30 days notice period and the rest would be a buyout option. In the buyout as well instead of taking the Basic salary for the buyout option, they are taking my complete one-month salary, my leaves are encashed on my basic salary. Kindly guide me if this is the right way to calculate the notice period buy-out

Note: Nowhere in my offer letter or any document of the company is mentioned that the buyout will be done on the gross salary. Requesting a quick response as I don't have much time left.

Thanks in advance.



 2 Replies

Ritesh Maity (Labour Law Advocate)     25 February 2021

Does your letter of appointment contain that buyout is on basic salary?

Arun G. R   26 February 2021

Hello Ritesh,

                      I do not have the buy-out option or calculation mentioned in my offer letter. Please find the details below,

i. During the term of your employment, should you desire to leave the services
of the Company, you shall be required to give sixty (60) days written notice.
The Company may, at its sole discretion, relieve you before the expiry of
notice period and compensate you for the remaining notice period. If you
tender your resignation to be effective from a future date, the Company
may, without further consultation with you, accept the said resignation with
immediate effect or with effect from any date prior to the date specified by
you in your aforesaid letter of resignation. However, in the event of your
termination of employment is without serving the stipulated period of notice,
you shall not be entitled to the salary and any other benefits due to you
from the Company.

The Company shall be entitled to terminate your employment without cause
at any time by giving you Sixty (60) days’ notice or salary in lieu thereof.

iii. If you are absent from work for a period of five (5) consecutive working days,
or remain absent unauthorized for a period of five (5) working days beyond
the period of leave originally granted or subsequently extended without
providing any notice or affording any reasons or without taking Company’s
prior written approval in this regard. the Company may at any time
thereafter give a notice to you at your last known address calling upon you
to report back for work and to explain in writing the reasons for such
absence within three (3) days of the date of the notice, and unless you
report for duty within such time and give a satisfactory explanation for your
absence, you will be deemed to have voluntarily retired / abandoned
service. However, if you report for work by submitting a satisfactory reply
within the time stipulated, you may be permitted to resume duty without
prejudice to the right of the Company to take suitable action.

v. Notwithstanding anything mentioned in this agreement, the Company may
terminate your employment, with immediate effect by a notice in writing
(without salary in lieu of notice), in the event of your misconduct, including
but not limited to, fraudulent, dishonest or undisciplined conduct of, or
breach of integrity, or embezzlement, or misappropriation or misuse by you of
the Company’s property, or insubordination or failure to comply with the
directions given to you by persons so authorized, or your insolvency or
conviction for any offence involving moral turpitude, or breach by you of
any terms of this agreement or Company policies or other documents or
directions of the Company, or irregularity in attendance, or upon you
conducting yourself in a manner which is regarded by the Company as
prejudicial to its own interests or to the interests of its clients and/or customers.

Notwithstanding anything aforesaid, termination by you shall be subject to
the satisfactory completion of all your existing duties, obligations and projects

vi. On termination of employment with the Company, you shall immediately
return to Company all equipment and supplies of Company and all books,
records, lists and other written, typed or printed materials, whether furnished
by Company or prepared by you, which contain any information relating to
Company’s business or any of its current, past or prospective customers,
clients, and/or employees. You shall not make nor retain copies of such
materials after termination of employment. Without limiting the foregoing,
you shall return any laptop or desktop computers owned by the Company
by the last day worked without erasing, overwriting or reformatting the hard
drives of any such computers. Furthermore you agree to provide for
inspection any personal devices which contain any information relating to
Company’s business or any of its current, past or prospective customers,
clients, and/or employees.


Thanks in advance.

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