Introduction
A notice period can be defined as the time period between the date of the formal resignation of the employee and the last working day of the employee. The Labour Law of India states that an employee has to serve a notice towards the organization depending upon the terms and conditions stipulating the contract of employment laid down by the company. In the Indian context, the notice period can range from a minuscule 15 days, to one month, or even stretch up to 90 days. The duration of the notice period depends upon the nature of employment, with a shorter notice period or a longer one, based on probation/permanent employment. Based on the level of seniority of the employee in question, the notice period can also be enhanced in order to ensure a smooth transition and termination of the contract.[1]
What Does The Law Say?
The inclusion of notice periods in the employment contract is not mandated by law. The notice period time for both the employer and the employee is, however, typically specified in employment contracts by the employer.
The contractual notice term may on occasion be longer than the legal notice requirement. In reality, doing so is standard practice in some industries in India, especially for senior-level staff, or in IT industries, for whom one month is often seen as insufficient for winding up and facilitating a smooth exit.
The statutory minimum notice period, as per the relevant law, will be applied in the absence of a contractual clause regarding the notice period in the employment agreement.
With respect to the termination of employment of a workman, the Industrial Disputes Act (1947), governing labour law, states that the employee may be terminated in the Indian context, subject to the fulfilment of the following stipulations-
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Reasonable Cause- In general parlance, the employee’s poor performance, loss of confidence, position elimination, or redundancy of position held can be construed to fall under reasonable causes which might mandate termination, and thereby lead to invocation of notice period.[2]
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Grounds of Employee’s Misconduct- Employee’s Misconduct includes instances of inappropriate workplace conduct, embezzlement, misuse of position/office etc. are various grounds that can lead to termination, and thereby lead to serving of notice period.[3]
Further, Section 25 of the Industrial Disputes Act (1947)[4] states that notice for termination of employment must be served in writing, and dispatched via any of the following modes, which govern all persons governed by labour law in India-
The notice should make clear the date from which employment is effectively terminated, the obligations of the employee during and post-notice period, and details of pending or due payments between the parties.[5]
How Can You File A Complaint Regarding This Before The Labour Commissioner?
According to Labour Law, in India, the employee in question may speak with the Labour Commissioner and explain the situation, or any dispute, with respect to the notice period, unpaid dues, etc. It is suggested that the complaint submitted to the Labour Commissioner be accompanied by copies of the legal notice provided to the employer, the employment contract, and a bank statement. It is the responsibility of the Labour Commissioner to settle disputes between employers and employees.[6]
The employee may go to the Labour Court if the Labour Commissioner[7] is unable to resolve the issue. According to the Industrial Disputes Act of 1947, a lawsuit may be brought against the employer. But this lawsuit must be filed within the limitation period as prescribed under the applicable labour law. The case must be decided by the Labour Court within three months.[8]
The Labour Court sets a deadline that must be met without exception. When the Presiding Officer of the specific Labour Court determines that it is appropriate or essential to do so, the time period is around three months. The Presiding Officer has the authority to extend the time limit for specific justifications in writing if necessary. The Labour Court will investigate the matter as well. Thus, the Labour Laws of India and the Labour Commissioner prescribe for a speedy resolution of disputes broadly covering employer-employee relations, notice period, unpaid dues, etc. under its ambit.[9]
Are Labour Laws Just Formalities When It Comes To IT Companies In India?
IT Companies are the backbone of various collateral and related sectors and play a vital role in the Indian Economy. One of the main reasons why IT Sector companies mandate outgoing employees to serve longer notice periods is to ensure that the smooth continuation of business goes on without an abrupt halt. Being a field wherein specialized services are rendered, not every person has the requisite skills for performing the tasks at hand, and hence a longer notice period gives the companies a headspace to replace the outgoing employee with the right fit as a replacement.[10]
Furthermore, it has been stated by various IT firms and companies that a shorter notice period, spanning 1-2 months, led to high attrition, and led to malpractices by employees finding ways to circumvent the due processes before exiting a company. However, despite having the highest notice period for employees worldwide, the Indian IT sector provides ample berth for the employee to look for other opportunities whilst receiving all benefits and facilities during the notice period. Hence, the IT companies duly follow labour laws with respect to the period of notice.[11]
In What Ways Employees Can Deal With Long Notice Periods?
Many companies, especially IT companies, have a three-month notice period, which is detrimental to employees as they lose experience and are forced to work at the same organization for three months, which hampers other prospects for such employees. Further, leaving employees’ productivity rate is considerably lowered due to looking for newer prospects, and such employees make little effort at ongoing work, and end up squandering company resources, and wasting time.[12]
Typically, the notice period to be served is one month. For instance, the Delhi Shops and Establishments Act, of 1954[13] states that the employer may terminate an employee's employment who has been employed for at least three months with the employer, on giving one month's notice or pay in lieu. If the employment contract provides for a higher notice period, it must be complied with. An onerous contractual arrangement cannot override the statutory protections provided to an employee. The employer. Thus, if the employment contract signed by the employee at the time of joining lays down a longer notice period, it must be complied with. Thus, the remedies for such employees are few and far between.
However, the employee may resort to certain remedies, such as requesting the employer to simply reduce the notice period or to offset the days stipulated under the notice period against outstanding leaves. However, the best way out is to clarify the notice period before tendering the resignation, or negotiating on the same if possible or allowable. Otherwise, a complaint can be registered vide the employers’ internal grievance redress mechanism portal. Based on that, if a compromise is reached, the notice period may be effectively reduced. However, there is no legal obligation upon the company to reduce the notice period in question.
Thus, it may be concluded that the employee must follow all requisite procedures in order to avoid liability under labour laws, must also do their due diligence before accepting an employment contract with a longer notice period, and must actively engage in negotiations with the employer for bringing out the best terms forthcoming the notice period, and the employment in general.
[1] All you need to know about Notice Period for Resignation, in.indeed.com, Available at- https://in.indeed.com/career-advice/career-development/notice-period
[2] Acceptable Reasons for Employee Termination, thehartford.com. Available at- https://www.thehartford.com/business-insurance/strategy/employee-termination/valid-reasons
[3] Tess C. Taylor, Employee Misconduct: Common Types and How to Address it, aihr.com, Available at- https://www.aihr.com/blog/employee-misconduct
[4] Industrial Disputes Act, 1947, Act No. 14 of 1947, S. 25.
[5] Ibid.
[6]Public Grievances, Ministry of Labour and Employment, labour.gov.in, Available at- https://labour.gov.in/public-grievances
[7] Industrial Disputes Act, 1947, Act No. 14 of 1947, S. 33(3).
[8] Industrial Disputes Act, 1947, Act No. 14 of 1947, S. 33(2)
[9]Ibid.
[10] Satyanand Muralidhara, Labour Rights, Are IT employees ‘workers’, deccanherald.com, Available at- https://www.deccanherald.com/opinion/comment/labour-rights-are-it-employees-workers-1041868.html
[11] Ibid.
[12] Bhaswar Kumar, Get Rid of 3 Month Notice Period: Techies ask govt to ease quitting process, business-standard.com, Available at- https://www.business-standard.com/article/companies/get-rid-of-3-month-notice-period-techies-ask-govt-to-ease-quitting-process-117030200238_1.html
[13] Delhi Shops and Establishments Act, 1954, Available at- https://www.indiacode.nic.in/bitstream/123456789/13587/1/delhishopsnestablishmentsact.pdf
