Legal Action Against Employee Not Serving Notice Period in India
Table of Contents
Introduction
In India, contracts of employment mostly provide for the amount of notice an employee is expected to give the workplace if an employee wishes to leave the company.
However, there are instances in which an employee will break this agreement and quit the company without giving the prescribed minimum notice amount, thus creating problems for the company also.
This blog attempts to reveal all the ways through which an organization can take legal action against an employee who refuses to serve the notice period in India, the steps or remedies that need to be taken by an organization and disadvantages of noticeserving employees.
What is meant by Notice Period in India?
The notice period refers to the period an employee is supposed to serve in a role after resigning from it. A notice period is a period whereby an employer can secure a replacement and the employee’s taskcarrying activities are wrapped up.
The notice period is effective from the date an employee provides his or her resignation letter to the last working day, as stated in the employment agreement.
Generally, notice is between 15 days and 3 months, depending on what the circumstances and his or her position are.
A breach of the notice period may attract legal consequences, especially in cases of unlawful resignation or violation of confidentiality clauses. Notice periods generally vary with the level or rank of the employee.
Consequences of Not Serving the Notice Period
When an employee fails to complete his or her notice period upon leaving, several adverse implications will result for the employee as well as for the organization.
1. Breach of Contract and Legal Action
It is usually provided in the employment contract that what notice period is required. Failure to do so can be considered a breach of contract and can provide an employer basis for taking legal action against the employee.
2. Withholding of Final Settlement
The settlement may include final salaries, bonuses, among other benefits that the employee may have accrued.
This may also extend to covering costs incurred by the company while hiring a temporary replacement to fill the vacancy.
3. Relieving Letter Lost
An official relief letter is an evidence that proves the employee is leaving. If the notice period is skipped, it may result in the failure of the employee to receive the document.
This leads to trouble while applying for a job in the future or dealing with it in proving previous employment.
4. Blacklisting
The practice is, however common in certain industries whereby HR informally shares information about employees leaving before completing their notice period.
This, therefore makes the employee probably blacklisted and, hence possibly hard to be employed in the future in the same industry.
5. Damages to Professional Reputation
Leaving a job without serving notice can damage the reputation of the employee in the professional marketplace.
The future employer will consider this act very casual and might work against him with the career later on.
6. Legal Fees and Potential Damages
If litigation occurred, the employee would have to pay for that as well. In case the court rules in favor of the employer after litigation, the damages the employee is liable to pay will depend on the terms of the contract and the damages lost by the company.
7. Emotional and Psychological Impact
All this, including the stress of facing legal action, damaged relationships with former colleagues, and uncertainty about future employment prospects, could prove very psychologically and emotionally straining.
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Legal Action Against an Employee for Not Serving the Notice Period
If an employee fails to serve the required notice period, the employer may take legal action based on the terms of the employment contract. Common actions include:
- Injunction: The employer can seek a court injunction to prevent the employee from joining another company until they fulfill the notice period requirement.
- Claim for Damages: The employer may seek financial compensation for any losses incurred due to the employee’s breach of contract.
- In certain industries, the employer may informally blacklist the employee, making it difficult for them to secure future employment within that sector.
How to Avoid Legal Actions?
- Know your employment contract: Familiarize yourself with the stated notice period, penalties, and other relevant clauses.
- Communicate vulnerability: Communicate any challenges you may be facing to the HR or supervisor as early as you can.
- Negotiate early end: Ability to train the replacement or an easy transition.
- Lien Pay instead of Notice: Paying your salary as lien instead of staying in the system during the notice period, if this is included in your employment contract.
- Agreements in Writing: Get those agreed changes to notice periods in writing.
- Legal Counsel: If you’re unsure about the wording in a contract, or worse, threatened with a lawsuit, get a lawyer to talk to you.
- Professionalism: Hand things over well and avoid nasty words.
- Company Policies Updates: Ensure you keep up with changes in resignation or notice periods rules.
What Legal Actions Can a Company Take Against an Employee?
A company can sue an employee. While employees have rights associated with an employment, so do employers, especially when an employee quits without giving enough notice.
The employer has the right to sue when the employee does not give the notice period. Depending on the nature of the case and as defined in the employment contract, an organization can sue or decide not to.
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