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Gurubrahmayya (Design Engineer)     03 July 2013

Recovery towards shortfall of notice period

Dear Experts,

                I am working in a limited company for last 2 years. I have given resignation on 16th May 2013. The notice period in my company is 90 days and 3 years bond (bond breach value is 1Lac). I am ready to pay bond breach value 1Lac but I need to relieve by 60days only.

My agreement with the company (signed by me) one clause stated as following:

“Recovery towards shortfall of period of notice:

                You are required to give minimum period of notice in writing. However, the company reserves the right to relieve you before the expiry of notice period on payment or recovery, as the case may be, of proportionate basic salary towards shortfall of period of notice.” 

So, as per above clause I asked my manager and HR that I am ready to pay the shortfall notice period, but he said he won’t allow me to buy the short fall period because policies are changed now but there is no mail and agreement signed by me for these new policies.

·         I just want to know whether these sudden change in policies applicable to me. Since there is no agreement signed between me and company regarding new policies?

·         Can I legally force them to relieve me by 60days by paying recovery amount for remaining notice period as per bond signed between me and company when I joined?


 9 Replies

AAK (Advocate)     03 July 2013

Unless going through with the entire service condition it hard to give any opinion in this reagard. However from the given fact i will try put some points.

As specified by you "company reserves the right to relieve you before the expiry of notice period on payment or recovery". Its not obligatory on company but its descrition of the company. On the other hand you are required to give minium period of notice, failing which company is entitled to recover 1 lac from him.. here also it is not obligation on company to releave you before the proper service of notice. So issuing notice is diffrent and collection of recovery is diffrent, so there is no obligation on company to releave you unless you serve proper notice. 

I advise you to try to settle the matter amicable rather than going legal. Legal remedy may consume much more time and value.

1 Like

Gurubrahmayya (Design Engineer)     03 July 2013

Thank you very much AAK,


                I am ready to pay 1 Lac for breaching bond and I am ready to serve 60 days notice period and ready to pay recovery amount for shortfall of notice period as per agreement signed. But company is denying relieving me even though there are no pending tasks from my side. Only Thing Company wants to spoil my opportunity by holding me for 3 months. Please help me to come out of my company. i am already attached those terms and condition signed by me.

Attached File : 375583860 iel terms&conditions crop.pdf downloaded: 382 times

Kumar Doab (FIN)     03 July 2013

Mr. AAK has given valuable advice. Kindly follow it.

Such matters are best resolved by applying rapport, goodwill, exceptional levels of reasoning, negotiation, persuasion, persistence skills……………

This is the time employee should favorable and written record too……………….

It seems that company and its HR shall sit on proper relieving.

The employee should inform next employer preferably in writing that the current employer may not issue acceptance of resignation/relieving letter/work experience-service certificate therefore the next employer should appoint/absorb on the strength of copy of resignation and its POD.

You have posted that:

--------“even though there are no pending tasks from my side. “

This is an imp. Statement which employee should make in writing on record, and so that the employer does not claim loss.

Employee may also state that as on date all tasks are completed and routine duties be assigned which can be completed within and up to effective date of resignation (thus date of retirement chosen by employee) and he should be informed on the designated replacement and handover/training etc if any to be performed within and up to last day in office…………….

Employee should also highlight that he has rendered, exemplary/unblemished/satisfactory services so that line managers/HR do not act to post comments to malign in personnel file and in future.

--------“but he said he won’t allow me to buy the short fall period because policies are changed now but there is no mail and agreement signed by me for these new policies.”

HR is not employer. He/she is another employee in the company. Until or unless empowered by the board he/she can not accept or decline to accept resignation.

He/she is to observe the policies and rules downloaded to him/her by his/her superior offices.

Most probably his statement is in line with ‘Employers” policy downloaded to him/her, hence he/she is adamant.

As noted from various threads IT companies have become adamant on notice period etc and if the employee is not 100% compliant relieving letter are not to be given as per some internal ‘Employers ‘ policy of the company.

This could be the reason for statement of HR in your case.


The resignation should be preferably addressed and supplied to the good offices of the appointing authority, MD, Chairman (preferably by redg. post) or escalation be preferably addressed and supplied to the good offices of the appointing authority, MD, Chairman Company Secretary…………………….The good offices of the company can grant the waiver…………..


--------Clause 19, 20, 21,

The contract of employment should promote equitable discretion.

The contract drafted/crafted by employer in your case does not seem to promote equitable discretion.

It is stated “however company reserves the right to pay basic salary in lieu of notice period, and terminate the contract with immediate effect.’

This seems to be in violation of the judgment(s) delivered by apex court e.g; resignation can not be accepted before effective date of resignation tendered 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.

The company should not reserve rights to it which can affect the future of the employee, violate the rights of the employee to seek better source of livelihood/career and progress in life.

Resignation can be without notice or permission. In contract a party which breaches the contract has to compensate the other party. The compensation/liquidated damages has been inserted in appointment letter in the form of notice pay.


There is an option of sending the cheque for notice pay towards shortfall in notice period along with notice of resignation and acknowledgment of notice and cheque may be demanded and obtained. The good offices of the company shall either accept or decline. Let them state so in writing and thereafter you may proceed accordingly.

Reliving letter is issued post all settlements by employee and signifies nothing is due against the employee and the employee has been properly relieved. Employee should properly resign under proper acknowledgment; ask for acknowledgment immediate effect and ask the good offices to whom handover the charge, company property, be made under proper acknowledgment on the spot……………


If employee has complied to all demand made then he has completed his contractual liability and now company should not sit on relieving letter, and supply it along with acceptance of resignation, work experience/service certificate, correct FNF statement, payment of FNF dues, Form 16 as per correct FNF statement, last salary slip and for all month’s of employment, PF number/account slips for entire period of service/attested copies of PF withdrawal or transfer forms, NOC/NDC etc………………………

If FNF statement is wrong employee may decline to accept it in writing.

HR/Line manager are not employer. If these personnel are stepping on the toes, then employee may escalate to god offices of appointing authority, MD, Chairman, company secretary……………….

It is felt that during employment no adverse comments on conduct etc has been posted to you and no stinker, memo, show cause notice etc was ever issued to you………………….


-------And clause; 30: have you registered with NSR of NASSCHOM?

In addition to BGV, reference check, adverse comments in personnel file, and to third parties, this is another concern you may have.

While the registration with employment exchange may have lawful sanctity: why registration with a private body is made mandatory for employment?


The company might have the right to post comments on your profile registered with NSR.

There have been threads hinting blacklisting or veiled blacklisting of employees who are not 100% compliant to the policies of the employer.

The founder of union for IT employees has posted comments:


In NSR can a employee be black listed, I am asking this as some employers have said this to employees!

 You may find the attachment as useful.


-------The IT companies are covered by Shops and Establishments Act (SE Act).

The notice period as per Andhra Pradesh Shops and Establishments Act Section 47: is 15-30 days.

The higher notice period is obviously for the benefit of employer.

Isn’t it that a higher notice period be termed void as per the Act.

-------You may also check if Industrial Employment Standing Orders Act (IESO Act) is applicable to your industry/company and if the company has its certified standing orders (CSO) and extended to your designation.

Some states like Karnataka has granted blanket exemption to IT/ITeS companies from the provisions of IESO Act and later this was ended.

You may check if the state of AP had granted at all such exemption from standing orders (SO).

And if later such exemption was ended.

If CSO exists then you may obtain a copy from employer and if employer does not provide from certifying Officer (CO; which may be DLC in o/o labor commissioner).

If CSO does not exist but IESO Act is applicable Model Standing Orders shall apply.

The service conditions stated in SO can not be negated to employee in appointment letter.

If notice period stated in standing orders is 1 month it can not be 3 months in appointment letter.


Designation alone does not decide employee is a ‘Workman’ as in ID act and ‘Employee’ as in SE Act.

Your lawyer may ask you a set of structured questions and may opine that you are covered by these enactments.

Model Standing Orders:

13.          Termination of employment.--(1) For terminating employment of a permanent workmen, notice in writing shall be given either by the employer or the workmen - one month’s notice in the case of monthly-rated workmen……………………

(3)   Where the employment of any workmen is terminated, the wages earned by him and other dues, if any, shall be paid before the expiry of the second working day from the day on which his employment is terminated.

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.


---------Many of forums/unions/groups were formed in AP, Karnataka by IT employees.

These unions may be in a position to intervene and help you.


There is an urgent need to form strong unions/trade unions by IT employees to defend their interest and rights.


You may proceed as deemed fit at your end.



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Attached File : 375632991 ap se act.doc downloaded: 205 times
1 Like

Adv k . mahesh (advocate)     03 July 2013

yes it is on the company policy that they can relive you before the notice period and do not stress a lot of times that you will pay the breach of bond amount and willnot serve the notice 

1. first you have to talk to the hr department and explain you grievance of not sreving the notice period and will leave before that 

2. about bond amount when you have already agreed but do not disclose as in india the bond are not valid but only they take as liquidated damages from you spend on you and as a last resort only you have to say that you will pay the bond amount 

1 Like


Mr. Mahesh has advised rightly.

1 Like

Gurubrahmayya (Design Engineer)     05 July 2013

Thank you very much Mr. Kumar Doab for your detail explanation.

Gurubrahmayya (Design Engineer)     05 July 2013

Thank you very much Mr. mahesh

Gurubrahmayya (Design Engineer)     05 July 2013

Dear Experts,

                I have requested lot my manager / HR about my urgency. But they not allowing me to relieve by 60 days even I am ready to pay 1 Lac for Liquidated damage and amount for shortfall of remaining notice period. The only reasons my present employer are not relieving is they want spoil my job offer by my next employer. Even I am ready to pay as per clauses mentioned in terms & conditions they want hold me.

As I know any employer doesn’t have right to spoil employee future if he/she can find better career/ progress in another company. Please tell me is there any way to get reliving from my current employer. :(

Kumar Doab (FIN)     05 July 2013

The matter has been discussed in detail.

Approach a competent and experienced labor consultant/service lawyer with leaders in the family, competent and experienced well wishers, spend quality time with your lawyer, show all of your documents, give inputs in person……………………

Your lawyer may opine that the service agreement signed by you is unconscionable, unreasonable, unenforceable………………..or that it is valid……………….

and that you are covered within the def. of "Workman" and "Employee'................................and the forum at whihc you can agitate if the need be..............


Let your representation to good offices of appointing authority /MD/Chairman/ Company Secretary in writing (preferably thru redg. post)  be structured and drafted by your lawyer.

You may cover the finer points: narrating briefly the minutes of each representation you have made in office in person/by phone/email/letter etc to HR/Manager/Reporting authority (mention dates, names/designations/dept/name of company, address)………… you have submitted your notice of resignation dated………………on dated………….and tendered notice of resignation of ……………months and your effective date of resignation/last day in office is dated…………..and that no task/assignment is pending and you may be informed to whom you should handover the charge/company property …………………..and that correct FNF statement may be issued to you showing payables by you to company………………….so that you can arrange to do the needful……………and acknowledgment of notice of resignation/acceptance of resignation, work experience/service certificate, relieving letter, correct FNF statement, payment of FNF dues, Form 16 as per correct FNF statement, last salary slip and for all month’s of employment, PF number/account slips for entire period of service/attested copies of PF withdrawal or transfer forms, NOC/NDC etc………………………should be supplied to you within your last day in office i.e dated…………………………

Or you may mention that cheque number……….dated……………for Rs………………..towards…………………..drawn on …………………….bank………… is enclosed and acknowledgment be issued to you on the spot and amounts be computed in FNF statement issued to you…………………

Based on the reply of the company you may proceed further, under the expert advice of your lawyer who has seen all of your docs and has analyzed the merits………………….

OR you may serve the full notice period……………….

Have you discussed the matter with any of the association of IT/ITeS employees………………

If there are other option you may persue those.

You may proceed as deemed fit at your end. 

You may find the attachments useful.

Valuable advise of learned experts/members is sought.

Attached File : 803280355 417759075 validity of employment bonds.pdf, 803280355 background paper.pdf downloaded: 282 times

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