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Anirudha (Team Leader)     21 October 2013

Termination of employment


I'm working in the Pvt Ltd company in Mumbai, and have planned to move on with my Career...but my company has very unfriendly policy which reads as follows "

Termination of employment


Associate may resign, by giving written notice in accordance with the following table taking account of your grade of employment at the time written notice is given:


Operational Grades                                    1 Month Notice

Management & Senior Management           3 Month Notice

Executive Management                              3 Month Notice                         


You have agree and confirm that the Company requires the above notice periods to find and train a suitable replacement to take over the duties handled by you. Also, in case you do not complete your notice period, the services rendered by the Company to its Clients will be disrupted, thereby causing loss and damage to the Company. 


In the event of short notice, you have agreed and undertaken to make a payment in accordance with the following table taking account of your grade of employment at the time your employment terminates as liquidated damages in addition to the gross salary for any balance notice period that has not been served by you, in favour of the Company, which liquidated damages being the agreed, genuine predetermined estimate of damages duly agreed by you (not being a penalty) which will be caused to the Company should you breach this condition.


Management & Senior Management  Rs. 3,00,000 [3 Lakh]

Executive Management                     Rs. 6,00,000 [6 Lakh]                        


If you fail to attend work during your notice period for reasons of illness, accident or other crisis, the Company reserves the right, at its absolute discretion, to extend your period of notice by a length of time up to but not exceeding the period of work that you have missed.


If for whatsoever reason you fail to work the full period of your notice you shall in addition to any the above, forfeit monies due to you from the Company, including outstanding leave payments if any.


You also expressly agreed that the Company shall have the right to pay you salary in lieu of notice at its sole and absolute discretion.


After termination, the Employee shall not undertake any act that adversely affect reputation of the Company. Terms pertaining to confidentiality, non-compete, non-solicitation, dispute resolution, intellectual property shall survive the termination. At any time following the effective date of termination of this Agreement, you shall reasonably cooperate with the Company in any litigation or administrative proceedings involving any matters with which you were involved during your employment."


Which I think is unfair I'm ready to pay Short notice amount for notice period not server. Please let me know what can be the way out.


 2 Replies

H. S. Thukral (Lawyer)     21 October 2013

There is nothing wrong in the contract of employment. Your employer has taken enough care and advice in drafting the agreement. It appears that you are more concerned about the liquidated damage which the employer has mentioned as your liability to pay in case you quit . I am to advise you that liquidated damages mentioned in the contract don't become payable automatically. It is a matter of adjudication. 

Anirudha (Team Leader)     21 October 2013

Thank you for your reply. So can I in anyway save that amt "liquidated damages". Also can you advice me if I need to pay it, can I claim this amt as loss during my income tax returns filing. Regards, Anirudha

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