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Rathish (Associate)     03 April 2008

Please help and this is urgent



  I am working in an MNC for the past 2 years now i have got an better offer from other company when i post my resignation the company hr says i have to give two months gross salary in lieu to the notice period of two months.

As per the hr policy it is mentioned that the notice period is two months or the salary in lieu.

But i have heard that most mnc accept the Basic salary to be served during notice period.

Kindly clarify is there any law that the company can avail only basic salary for the period not served during resignation.

Also is my company covered under labour laws of india.

If yes can i sue aganist my company for this policy. or any measures taken aganist my company legally.


Thanks in advance .








 6 Replies

Guest (n/a)     04 April 2008

The MNC company is governed by Indian Labour laws. You cannot sue the company for the terms as it is you who had signed the contract knowing fully well about the terms at the time of entering into the service. The contract is binding unless it is unenforceable in law. This is al egally enforceable contract and therefore you need to pay the amount.

shiva shanker (Legal Officer)     04 April 2008

HI Rathish, it is better to work for two months after giving notice instead of paying two months salary. Almost all the companies are following the same principle. You please see the contract agreement entered with your employer. Then only you can understand clearly.

Guest (n/a)     05 April 2008

One has to abide by the terms of appointment letter or contract of service. Generally it is right that companies deduct only basic salary and not gross. There is no such written law on this. And if there is standing orders / service rules separately then these orders prevail over terms of appointment letter or contract of service

vivek (service)     18 April 2008

Hi Rathish, Basicaly ,there is no written law for this but in this case you will be covered by the terms of appointment letter or with service rules or standing order.If in your letter this is basic then u will have to pay basic only otherwise gross.Pls go through your appointment letter for this once again.

Guest (n/a)     09 May 2008

Hi Rathish, At the time of appointment u would have signed the appointment letter as a note of acceptance of employment. Your appointment letter once signed and accepted by you transforms in to a contract and it becomes enforceable in law as the conditions of offer and acceptance are fulfilled. Your basic salary will have to surrendered in lieu of your notice period else serve the 2 months notice period. But it is no where mentioned in law that one has to serve a notice period and notice period is nothing but a breathing time for the companies to find a replacement for your position.

Angel Power (Law)     12 May 2008

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