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Understanding Notice Period & It’s Significance

I remember the time in early 2000s in Western Suburbs of Mumbai when, with the advent of Call Centers & BPOs, a lot of very young workforce (18-21 years old) joined in, typically those who went to graduation college in the mornings and worked late evenings / night, I saw many many of them were happy earning money. Initially, the idea was to consider that work as a means to get additional “pocket money” to cover their expenses but then that feeling quickly changed to the MATTER OF RIGHT and the idea of living stylish, which eventually started the big spendings on bikes, then mobiles & other gadgets. Add to it the Credit Cards Schemes. This lifestyle somewhere grew on them and depending upon the poaching done by rival BPOs, they switched jobs for good hikes, sometimes not even bothering with giving notice to their employers. Such was the competition amongst employers & indifference within the workforce ! But, wasn’t it somewhere wrong ethically on both sides that this aspect wasn’t given any significance. Hence, this blog post.

Whenever an employee resigns from his job, he is supposed to serve a set no. of days in his existing Company. Alternatively, if an employer is laying off the employee, the former has to give some requisite number of days to the latter, to help him find another job. This process of serving your Company for a requisite number of days is called as NOTICE PERIOD.

There is a separate clear clause stated in your Employment Contract or the Appointment Letter, that shall typically read like this and I quote:

  1. You will automatically retire from the services of the company on attaining 58 years. If you absent yourself without leave or remain absent beyond the period of leave originally granted or subsequently extended, you shall be considered as having voluntarily terminated your employment without giving any notice unless you a) return to work within 8 days from the commencement of such absence and b) give an explanation to the satisfaction of the Management regarding such absence.
  2. Your services are liable to be terminated without any notice or salary in lieu thereof for misconduct, without being exhaustive and without prejudice to the general meaning of the term “misconduct” in the case of reasonable suspicion of misconduct, disloyalty, commission of an act involving moral turpitude, any act of indiscipline or inefficiency. 
  3. Except for the reasons mentioned in this appointment letter, your services can be terminated by giving three months’ notice in writing on either side or payment of salary (Basic), in lieu thereof. However, in the event of your resignation, the Company in its sole discretion will have an option to accept the same and relieve you prior to completion of the stipulated notice period of three months, without any pay in lieu of the notice period.


Essentially, the third clause becomes most important, since good employees don’t really commit the misconducts mentioned in the first 2 clauses. The 3rd clause says, that the minimum serving period post your resignation is 3 months, either side. Say you send your resignation email to your boss on 1st April 2015 & your notice period is 3 months, the countdown starts from 1st April 2015 itself, unless you have shooted the mail at night 🙂

I also saw one strange question: How does the HR calculate 3 months ? If somebody resigns on 1st July 2015, July & August have 31 days each & September has 30 days, the notice actually becomes 92 days. Now, should it really matter ? None-the-less, maximum HR personnel shall consider “Number of Days” basis. Effectively, they will take 28th September 2015 as your last day in the Organization.

If either of them is not able to serve notice period in no. of days, he can alternatively opt to pay his salary for those many days against the shortfall. Most Companies have HR Policy of paying only the Basic Component on pro-rata basis. If you have negotiated well with your future employer, you might as well opt for this. However, from an ethical or moral standpoint, I always advice to my young employees, who are lower in hierarchy than me, to serve notice to the extent possible, for the following reasons:

  1. The basic idea of Notice is to help other party prepare for the future. The other party could be an employee or employer. If employee serves notice, it helps the employer find a replacement for the said position, prepare the next person for the role and ensure smooth handover process / knowledge transfer. Alternatively, if employer gives notice to employee, it helps the latter to find a suitable job & may not badly affect his career.
  2. Projects don’t get stuck mid-way on sudden absence of employee
  3. Money can’t buy everything. You can definitely opt to pay instead of serving your notice & join your new employer from tomorrow but thinking from ethical point of view, is it fair ? Was your current employer so bad ? Were you in so much trouble here ? Or is it that you aren’t confident of your new employer waiting for you ? Always note that how you go – is being observed not only by your current company but also new company. Today, they are in need, hence they may pressurize you to join in an instant but are you going to boggle down by that pressure ? If yes, then I may also think (as your future employer) – what’s the guarantee he’s not going to do the same to me in the future ?

Now, whether 90 days notice is good or bad, or whether it should be 45 days or 30 days, is a different issue and requires a separate discussion 😉

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