• PSU Resignation - Penalty on short departure

After working in ONGC for 8 years, I resigned on a month's notice (instead of 03 months as standard). I have now been asked to deposit (02 months (unserved period) + 03 months (Penalty)) basic + da. I have gathered that such a random penalty of 03 months does not exist anywhere including private companies. 
I have two questions:
1. Is it legal for a PSU firm like ONGC to impose this penalty. To impose this penalty, they used an office order signed by a GM (HR), issued in 2012 citing amendments in service rules para. 

2. Interestingly, There is a copy of service rules published in 2014 (It is unsigned but available on company's employee portal for two years and provided by officers). The updated service rules copy does not have any mention of 03 months penalty. On inquiry, HR says that they have forgotten to update the same hence the amendment issued in the past would be valid. 

Shouldn't the updated copy be assumed valid in such a scenario?

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Asked 7 years ago in Labour

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4 Answers

1) company cannot impose 3months penalty if there is no such clause in your appointment letter or bond signed by you or in your service rules

2) the amendment if any in service rules should have been loaded on employee portal

Ajay Sethi
Advocate, Mumbai
95205 Answers
7607 Consultations

5.0 on 5.0

1. The demand made by the organisation for penalty besides remaining notice period may not be in conformation with the existing rules or law.

You could have furnished the details of the cited order or notice, even now you can consult a local service law practicing lawyer for his opinion and advise on further course of action on this.

2. The flimsy reason given by the HR is not valid in law, You can challenge their order to pay the penalty by first issuing a legal notice denying the invalid law upon which they rely and prepare to face them legally on further issues.

No oral commitments or sayings shall become law.

T Kalaiselvan
Advocate, Vellore
85404 Answers
2236 Consultations

5.0 on 5.0

1) you would be gioverned byu terms of your appointment letter

2) if subsequently serviuce rules were changed and communcicated to employees the service rules would be binding upon the employees

3) litigation is long drawn and expensive proposition

4) avoid it

Ajay Sethi
Advocate, Mumbai
95205 Answers
7607 Consultations

5.0 on 5.0

Though the employment offer letter and the conditions therein shall be valid for all legal purposes, the clause that the employee agrees for the change in policy decisions with regard to the rules and regulations of the organization shall be binding and he/she cannot claim exemption if this clause is in the service regulations.

T Kalaiselvan
Advocate, Vellore
85404 Answers
2236 Consultations

5.0 on 5.0

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