Hello all,
As per statutory, what is deduction of wages upon ‘Failure To Serve Notice Period’ by employees?
Please advise.
Thank you.
Jyoti
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It will always be as per the terms and conditions of the employment appointment order.
Critical illness and death cases of employees/family members can be considered on producing of medical certificate and humanitarian grounds respectively.
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If employee fail to serve the notice period he has to pay equivalent sum in lieu thereof in terms of appointment. The management can initiate legal proceedings to recover the sum equivalent to notice period . Usually Notice period is 1-3 months, for senior roles it is 3-6 months.
Before taking legal action the contract/agreement/Appointment letter should specifically mention about taking legal action and the circumstances.
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Hi Jyoti,
Adding to fellow members suggestions, As the S&E Act clearly contemplates payment of 1 (one) month’s salary in lieu of notice period and the courts have also upheld the validity of deductions by employers of the same where their employment contracts talks about, employers can reasonably justify deductions from the wages of their employees engaged, up to a period of 1 (one) month (subject to assessment of applicability of the Wages Act).
It is also suggested that employers enter into employment contracts or issue appointment letters to each of its employees expressly providing for a right to deduct 1 (one) month’s wages in case of failure by the employee to serve its notice period, which would not only strengthen their position in case of any dispute over deductions but also make employees aware of the rights of the employers in the event of sudden resignations.
Hope its helpful.
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Notice of unilateral termination of the contract of employment by way of discharge or retrenchment of an employee at the behest of an employer alone prescribed u/s 25-F of the Industrial Disputes Act,1947 and State Shops and Establishments Acts. But it can only be incorporated under the exit clause of the contract of employment as a mutual right and obligation of either party.
In such a situation, it is imperative on the part of both the employer and employee whoever forecloses the contract at his own discretion to comply with the notice clause.
If it is the employee, he has to serve the entire notice period or buy it out by paying the salary subject to the approval of the employer. Being the superior party, the employer can insist on serving the notice period in the interest of the work of the organization.
If it is the employer, he can relieve the employee forthwith by paying the entire salary for the notice period already stipulated in the contract.
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