• 90 day notice

I am working in a company in Gurgaon for the last 5 years. I stay in Daarna, Delhi.

I decided to change course and ended up with a better opportunity. I served my notice period and have served more then a month of it. I communicated to my present company of the opportunity and requested an early release. I am ready to serve a notice of 60 days and will like to buy out the last one month. The company has denied and is asking me to serve the full notice period. They claim to not have a back up resource for me however there is one in the system. I also did sign an SLA agreement with them which is long over. I am worried as I might loose the opportunity I have got if I don't get the release and the rekening letter.. if I go absconding then might loose my gratuity a d EPF amount.. please suggest what I should do?
Asked 4 years ago in Labour

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12 Answers

Firstly request the HR if they do not oblige send a legal notice through advocate. They cannot restrict your PF or Gratuity since you have served five years in company. In your notice mention that you are ready to buy out last one month if they do not relieve you then any damages that may cause to your career you will recover from them along with future damages

Swarnarka Chowdhury
Advocate, Mysore
1878 Answers
5 Consultations

5.0 on 5.0

It is at discretion of company to waive the notice period

3) if company refuses to accept salary in lieu of notice period consumer hen you have to serve 90 day notice period

3) if you fail to serve notice period company would declare you an absconder and not give you experience letter / relieving letter

Ajay Sethi
Advocate, Mumbai
87901 Answers
6207 Consultations

5.0 on 5.0

Whether or not you can buy out the notice period partially or fully, depends upon the termination Clause in your employment agreement. Please reproduce the relevant Clause from your employment agreement here, so that a concrete advise can be given to you.

Vibhanshu Srivastava
Advocate, New Delhi
9426 Answers
245 Consultations

5.0 on 5.0

Sir in most of the clauses partial buying of notice period is not allowed either you have to serve the notice period or you have to pay in lieu or on discretion of employer if he wish to release you earlier so kindly mention the relevant clause. Further in no circumstances they can hold your gratuity and EPF as that is your hard earned amount. if they do a complaint to the labour commissioner can be filed.

Further here you have option first you can talk to the HR and senior official of company can settle the issue further since your service level agreement has expired you can serve them with legal notice for reliving letter.

Also kindly seek extension and try that you can join in new company without experience letter. As in case you go legally against current employer it can take some time

Shubham Jhajharia
Advocate, Ahmedabad
25516 Answers
179 Consultations

5.0 on 5.0

1. In such a case you will have to communicate your present company's unwillingness to your prospective employer and seek an extension to join their organisation

2. If you think that the prospective opportunity in the new company is not something to give up then instead of buying out the last one month of your present company, you can think of waiving the salary for one month or part which the new company is willing to offer, in order to crystallise your position in the new company

Yusuf Rampurawala
Advocate, Mumbai
6878 Answers
79 Consultations

5.0 on 5.0

You should consider sending a legal notice to your employer requesting them to reduce your notice period to 60 days and also offer to pay salary in lieu of that period..

But, you'll be governed by terms and conditions of the Appointment letter. If there is a provision which talks about partial buy out of notice period, then only you can enforce it, otherwise it is their discretion whether to relieve you or not.

Regards.

Siddharth Jain
Advocate, New Delhi
5928 Answers
101 Consultations

5.0 on 5.0

It depends on your appointment there should be a clause defining the termination and if that class allows you to buy back your notice period then you can do that and company cannot stop but in case it is not providing any buyback and it is totally on the wish of the company then you need to persuade the company to release you at an early date.

EPF cannot be controlled by the company as now it is coming with a unique number to transfer but the Payment of Gratuity will definitely be on hold till the clearance

Vimlesh Prasad Mishra
Advocate, Lucknow
6848 Answers
23 Consultations

4.9 on 5.0

If you have served notice period, than company can not stop you. Also, most companies deduct one or two moths salary is notice period is not served. you will not loose your EPF and Gratuity is id you have resigned as per terms and conditions of Joining letter.

Jaswant Singh
Advocate, Gurugram
926 Answers
2 Consultations

4.8 on 5.0

1) No you will not loose any gratuity and EPF amount. On medical ground you will be get relieving letter from your HR.

2) You can tell them you have severe disease to you so we won't be able to work from hence forth, provide medical certificate.

Ganesh Kadam
Advocate, Pune
12335 Answers
191 Consultations

4.9 on 5.0

Dear Sir,

You will lose nothing. The law is as follows:

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Is notice period (3 months) legal in India?

It may help to think of a buyout agreement as a sort of "prenuptial agreement" between co-owners: It determines what will happen if your corporation's owners decide not to stay together 'til death do them part.

The law provides remedies if a promise is breached or recognizes the performance of a promise as a duty.

Every document signed in India is legal in India provided that:

• Adhere and comply within the jurisdiction of the law/s such labor law etc..

• Not Forbidden By Law such as in IPC act 1860.

• If Permitted It Would Not Defeat The Provisions Of Any Law (other subsidiary law such as FEMA, SEBI etc)

• Does not Opposed To Public Policy.

Conclusion:

On the basis of above discussed, it can be easily understood that the ambit and scope of section 23 of the Indian contract act 1872, is vast and therefore the applicability of its provisions is subject to scrutiny by the court of the consideration and object of an agreement and the agreement itself.

Therefore, in order to bring a case within the purview of section 23, it is necessary to show that the object of the agreement or consideration of the agreement or the agreement itself is unlawful.

I'll keep it short and simple:

Either party - employer or employee can terminate the contract by giving sufficient notice or compensating accordingly. In such a case, employer is bound to release the employee without any fuss, assuming that either of the above two conditions are met.

So, if your organization doesn't allow you to buyout the notice period, please feel free to knock on the doors of the Indian judiciary.

The following key issues should be highlighted:

• A 30 to 90-day notice period applies in order to terminate ‘workmen’ (as defined in the Industrial Disputes Act, 1947) – that is, employees whose role is not primarily supervisory, administrative or managerial) for convenience, with 15 days’ pay due for every year worked. In the case of manufacturing units, plantations and mines with 100 or more workmen, termination for convenience requires prior government approval; in other sectors, it requires only government notification.

• Termination for cause does not include non-performance – it includes only behaviour which qualifies as misconduct.

• The ‘last in, first out’ principle requires that the employer first terminate for convenience the last people to join the organisation in the same role. However, this requirement can be contracted out of. When hiring for the same role, workmen who were terminated for convenience should be given the opportunity to re-join the company.

• State laws generally provide for about 15 days of earned/regular leave a year. Employees also benefit from up to 10 days of sick leave and a possible 10 additional days of ‘casual leave’. This is generally more than what most organisations would ideally like to provide.

• Most state laws provide for ‘casual leave’ – the employee can opt not to come to work that day without applying for leave in advance. Many organisations find this disruptive.

• Most state laws restrict women from working at night; if women are to work at night, specific approval must be obtained. This exemption is granted only to limited business sectors (eg, IT sector). Further, the employer must offer door-to-door transport and meet some security-related requirements.

• Most state laws prescribe overtime for any hours worked beyond 48 hours in a week. However, this is seldom observed.

• Indian law regulates and in some cases prohibits the use of contract workers. To engage contract workers, the contractor must hold a licence and the employer must be registered as a ‘principal employer’.

• Non-compete agreements are not enforceable under Indian law, while non-solicitation clauses can be enforced only in limited ways.

• While the ‘work for hire’ principle applies under the Indian copyright regime, it does not apply under the Indian patent regime; employees must thus provide formal assignments.

• Indian laws require employers to maintain a plethora of registers and notices. Compliance with such requirements is difficult and full compliance is rare.

What do you consider unique to those doing business in your country?

Some of the points mentioned above are unique to India. In addition, while Indian employment law is mainly federal in nature, most states have a Shops and Establishments Act. These statutes are similar, but not identical. Further, some states have been permitted to make amendments to central laws, with which are thus applicable in a different manner in such states.

Is there any general advice you would give in the employment area?

India is heavily regulated in the employment arena. Legal assistance should be obtained with regard to employment contracts and employment terms of service. Practical advice should be sought on best practices and common practices, so that policies are HR friendly and legally compliant. Advice should also be obtained on areas where compliance is difficult, so that employers can adopt positions that balance convenience against risk.

Emerging issues/hot topics/proposals for reform Are there any noteworthy proposals for reform in your jurisdiction?

As part of the objective to make it easier to do business in India, the government has proposed that the federal labour laws be revised and possibly amalgamated into two or three labour codes. If this is accomplished, the filing requirements will be streamlined. Amendments have also been proposed to some federal laws relating to factories and the use of apprentices. There has been no progress taking these initiatives forward and it appears unlikely that the government will do so.

Key amendments to law in recent months include a substantial change to the Maternity Benefit Act 1961 through the Maternity Benefit (Amendment) Act 2016. Key features of this amendment include:

• an increase in paid time off for eligible female employees from 12 weeks to 26 weeks in case a female employee has fewer than two children. If she has two or more children, she is entitled to 12 weeks’ leave;

• the introduction of the concepts of a 'commissioning mother' and an 'adopting mother', which widens the scope of the law. Such mothers are entitled to 12 weeks’ leave;

• the option to work from home once the paid maternity leave period has ended, based on an agreement with the employer; and

• requiring an establishment with 50 or more employees to set up a crèche facility.

Overall, the amendments are progressive in nature. From an employer’s perspective, there will be greater financial implications due to the increased maternity leave payment and also the benefits to be paid to the new categories of eligible female employees.

In December 2016 the Employee’s State Insurance Act 1948 was amended, increasing the salary or wages threshold for coverage of an employee to Rs21,000 (approximately $309) per month from the previous wage cap of Rs15,000 (approximately $221) per month. The act applies to commercial establishments and provides for social security insurance for employees in case of sickness. The amendment has led to higher employee coverage under the law.

What are the emerging trends in employment law in your jurisdiction?

After decades of the government and courts adopting a somewhat socialist mind set, there has been a shift to a more pragmatic, business-friendly approach. The old approach, which focused on unskilled and daily wage workers, has given way to a focus on India’s growing service industry. There is heightened interest in rewriting the employment laws to make them more business friendly. India’s newest employment law on the prevention of sexual harassment is also leading to an increased number of sexual harassment complaints and additional processes to be followed.

Another important aspect is the move towards e-governance in the labour law sector. A new web portal launched by the government provides users with a unique labour identification number, facilitating online registration, the filing of self-certified, simplified and single online returns for specific federal laws, and a transparent labour inspection scheme on risk-based criteria. Some concessions have also been provided for start ups in terms of employment law compliances.

The employment relationship

Country specific laws What laws and regulations govern the employment relationship?

Some states require that the employer prepare an appointment order for new hires, although this is seldom observed. There are no direct laws dealing with probation on a general basis in India, which is, however, a common practice. The (federal) Industrial Employment (Standing Orders) Act1946 (which is applicable to workmen), provides for a probationary period of up to three months. Certain states have built in the probation concept indirectly into their local laws, which ranges from three to six months. Ideally, a probation period should not exceed 240 days, as several statutory social welfare laws apply to employees who have worked for such period. The Industrial Disputes Act 1947 (applicable to workmen), prescribes that if certain terms of service change, notice must be given to the employee. It also prescribes requirements for termination for convenience, including notice and compensation.

Who do these cover, including categories of worker?

There are essentially two types of employer and two types of employee. Employers are either:

• ‘establishments’ – a term which encompasses all employers; or

• ‘factories’ – a term which typically encompasses manufacturing units. Mines are sometimes covered along with factories.

Employees are either:

• ‘employees’ – a term which covers all employees in any kind of role; or

• ‘workmen’ (as defined in the Industrial Disputes Act, 1947) – that is, employees whose primary role is not supervisory, managerial or administrative.

In addition, certain state laws may exclude senior management employees from their scope of application.

Misclassification Are there specific rules regarding employee/contractor classification?

Indian law regulates and in some cases prohibits the use of contract workers. To engage contract workers, the contractor must hold a licence and the employer must be registered as a ‘principal employer’.

Contracts Must an employment contract be in writing?

Except in states which require an appointment order, Indian law does not explicitly require that an employment contract be in writing, although this is the typical practice followed by most employers.

Are any terms implied into employment contracts?

Certain legal terms are implied in the employment contract. A duty of care, a right to privacy and a duty to maintain confidentiality are implied in the employment contract.

Are mandatory arbitration/dispute resolution agreements enforceable?

Yes.

How can employers make changes to existing employment agreements?

Under Indian contract law, a contract requires the consent of both parties. Thus, the employer cannot unilaterally make changes to the employment agreement. Typically, compensation terms are set out in an annex to the agreement, which should provide that these will be subject to change from time to time. Standard terms of employment – such as working hours, vacation, benefits, security procedures and disciplinary procedures – are normally set out in the employment terms of service, rather than in the employment contract. The employment contract should state that these terms of service apply to the employee and will be subject to change from time to time.

An employer cannot change specified service conditions (eg, compensation, grade classification and customary concessions) for ‘workmen’ (as defined in the Industrial Disputes Act, 1947) without providing 21 days’ prior statutory notice and notice to the labour authorities. This should be considered when implementing changes to an employment agreement.

Foreign workers Is a distinction drawn between local and foreign workers?

A significant difference between local and foreign employees is evident in the law on provident funds, which is a type of pension. The threshold to qualify, the manner of deduction and the benefits are different for foreign employee, and differ further depending on whether the country of origin has a social service agreement with India. There are no other substantive distinctions between local and foreign employees.

Recruitment

Advertising What are the requirements relating to advertising positions?

Under the Employment Exchange (Compulsory Notification of Vacancies) Act, 1959, if the state so requires, a private sector establishment with 25 or more employees must notify vacancies to specific employment exchanges. However, this is seldom observed.

Background checks

What can employers do with regard to background checks and inquiries in relation to the following:

(a) Criminal records?

While it is possible to conduct criminal background checks, this is extremely difficult in practice because criminal records are not digitised and are not consolidated nationwide. Accordingly, where a criminal background check must be carried out, this is typically done at the police station with jurisdiction over the employee’s current place of residence or anywhere that he or she has lived for a reasonable period.

(b) Medical history?

Employees’ medical histories cannot be accessed easily, since these are not digitised and there is no repository of medical records. Employee consent is required to disclose medical records to the employer. However, some employers require employees to undergo medical checks and have the diagnostic centre send the report directly to the employer. Subject to certain specific restrictions (eg, pre-employment testing for HIV is not permitted), there is no prohibition against this practice under Indian law.

(c) Drug screening?

Indian law does not prohibit drug screening.

(d) Credit checks?

An individual is entitled to obtain information on his or her credit rating. The employer can also access this information, with the employee’s permission and on providing necessary proof of identity. Access to credit rating information is more common in banks and financial institutions.

(e) Immigration status?

Indian law does not specifically require an employer to check the immigration status of a foreigner. Indian law does not prevent the employer from checking whether a foreign employee holds the necessary visa to work in India. If a foreign individual on an employment visa wishes to change employment to another company, he or she must leave India and apply afresh for a visa. The only exception is where the foreigner is changing jobs between a registered holding company and its subsidiaries or vice versa, or between subsidiaries of a registered holding company. In such case the foreigner may not need to leave India, provided that he or she fulfils specific criteria, including obtaining prior government approval for the change in employment.

(f) Social media?

There is no bar against conducting background checks through social media.

(g) Other?

The most common background checks undertaken are of educational qualifications. The employee must consent to this and the employer (or an outsourced provider) will then write to the relevant institution requesting confirmation. The institution may charge a fee for providing this information. Most institutions have a procedure in place in this regard.

Wages and working time

Pay Is there a national minimum wage and, if so, what is it?

There is no national minimum wage. However, the central and state governments can issue notifications on minimum wages in specific industries. The federal government has set the recommended minimum wage to Rs176 per day and advised state governments to implement the same.

Are there restrictions on working hours?

By and large, working up to nine hours a day is permitted, with a weekly limit of 48 to 50 hours. There are laws that restrict women from working at night (between 8:00pm and 6:00am). Some states also have a maximum number of hours of overtime that can be worked.

Hours and overtime What are the requirements for meal and rest breaks?

Most state laws provide for a break of 30 to 60 minutes after four to five hours of work. In practice, it is typical to provide a one-hour lunch break in an eight-hour day.

How should overtime be calculated?

Overtime is usually calculated at twice the rate of normal wages. State law defines what the term ‘wages’ covers; this typically includes basic wages plus normal allowances, but excludes any bonus component.

What exemptions are there from overtime?

There are no exemptions from paying overtime. However, the overtime provisions are seldom observed – generally, companies do not pay overtime when employees stay late to complete their work. It is recommended that employers pay overtime at least when employees are required by the nature of the assignment to work overtime – for example, call centre employees.

Is there a minimum paid holiday entitlement?

Yes. This varies from state to state, but is generally about 15 days. Most states prescribe up to 10 days of sick leave and some states prescribe another entitlement of up to 10 days of casual leave. In addition, most states prescribe about 10 days of public holidays; four to five of these are mandatory national and state holidays, while the remainder are chosen by the employer from a larger list provided by the state.

What are the rules applicable to final pay and deductions from wages?

Final pay must be made within two days of the date of termination where the employee’s services are terminated by the employer. In case of the employee’s resignation, the final pay-out can be made as part of the company’s normal payment cycle.

Deductions are permitted from an employee’s wages, but only for specified reasons (eg, on account of fines, deductions for damage to or loss of goods expressly entrusted to the employee and recovery of loans or advances). Deductions are generally permitted only up to 50% of the employee’s wages.

Kishan Dutt Kalaskar
Advocate, Bangalore
6050 Answers
381 Consultations

4.8 on 5.0

You should communicate your decision to quit the company in writing and get an acknowledgement if delivered in person or send it by registered post expressing your willingness to compensate with the two months salary as compensation in lieu of notice period and demand your dues to be paid at earliest.

Let them give a reply after which you can resort to legal action accordingly.

T Kalaiselvan
Advocate, Vellore
78059 Answers
1543 Consultations

5.0 on 5.0

Send a legal notice to them approach the labour court for interim order for the release letter and unfair labour practice. You need to check that you come under the labour court Provisions or you need to approach civil court for the same

Prashant Nayak
Advocate, Mumbai
27234 Answers
88 Consultations

4.4 on 5.0

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