[HELP] Can my employer change notice period duration like this?

Shubham1401

Shubham1401

Adept
Hi Folks,

I as a business analyst at a startup. Back when I was a fresher I signed a service agreement with this company stating 2 years bond with INR 1 lakh bond money and 2 months notice period.

Now with this years appraisal they have increased the notice period to 3 months (this was HR communication and I have not signed anything stating 3 months).

Problem is it has not been 2 years since I signed the service agreement, so what should apply? 2 months notice period or 3 months ?

I am asking because I have been selected in a reputed analytics firm with 100% hike but 3 months notice period might be a problem with them. :/
 
If its a non-permanent time bound contractual job (like a 2 year job contract), neither employee nor employer can change any of the terms during the contract period.

Notice period for a full time job is typically treated as company policy and can get changed from time to time like all other company policies. However, the employer needs to inform it proactively to the employees that a policy change is coming into effect. They cannot change it silently and leave it to the employee to find out later. They have to announce it and in way that evidence of it will be available for them too. If you have objections to the policy, you can raise an objection immediately and resign from the company in which case the policy cannot be applied to you. Continuing your employment after the policy change comes into effect is implicit acceptance of the policy change.

Do note that bond for a full time job is a completely different obligation that has nothing to do with the notice period. So a 2 year bond is just a contract that says that if you decide to leave before 2 years, you have to pay certain amount to cover the costs incurred by the company on you. It does not enforce anything else on you or the employer unless explicitly stated. Such contracts also need to be reasonable. For instance, an employer cannot just make you sign a 10 Lac bond and ask you to pay it without actually having incurred such costs.
 
^^ And what is that supposed to achieve? The employment bond and notice period are two separate things.

First of all, a bond as a way of a penalty clause for leaving is not even enforceable at all. The purpose of the monetary bond should be solely to cover any expenses incurred by the company on account of the employee which they could not get any return on. The bond simply states that if the employee within certain period, he has pay certain amount as compensation to cover the costs incurred by the company. The employee can contest the amount of compensation if he/she thinks that the company has not spent that much amount on them. For example, if the company required a bond of 2 Lac, but the employee thinks that the company only spent 50k on them, they can contest it in court and the company will be required to prove the amount of money that is actually spent and they will only get that amount. As far as notice period is concerned, the bond typically only includes language that states that even if the employee is leaving within the bond period, he still has to serve the notice period as per the policy applicable at the time of resignation.

The notice period, paid leaves etc are a matter of company policy and every service agreement includes language to the effect that policies are subject to change.
 
Have a word with your senior and also with HR. I would not advice to get a lawyer unless it comes to that level, and it might harm you more that good.
 
A Company always has to follow Nasscom Rules, which clearly mentions this , that an employee can challenge his authority .I May be wrong but what if it works out. i hope you understand vivek. Because informing Nasscom about incident the employee will be safe.
 
@xman0752

I think you should stop trying to a hand out advice on stuff you have absolutely no clue about.
FYI, NASSCOM is a private non-profit foundation formed by IT and BPO companies and has no control over any company. Its membership is only held by about 1400 companies. It is not some sort of regulatory body as you seem to be under the impression of.

The best thing that the OP can do at the moment is talk with the managers/HR and see if they can let him go with a two month notice. Most companies do not enforce the notice period regulation strictly unless they have absolute need of the employee. i.e. unless the company is run by absolute a**holes. If the company doesn't need the employee direly, letting them go early would also mean not having to pay them salary for that month which makes perfect sense.

Another alternative is that if the new company values their hire enough, they will offer to buy out the notice period which would later be adjusted over a period in the salary. There are also cases where companies have done it for free.

Legal notices and all should be reserved for serious disputes like unlawful termination, payment issues, harassment etc. Even if you want to contest a notice period (though I see no basis for it), who knows how many years it takes up before it goes before a court?
 
xman0752 said:
A Company always has to follow Nasscom Rules, which clearly mentions this , that an employee can challenge his authority .I May be wrong but what if it works out. i hope you understand vivek. Because informing Nasscom about incident the employee will be safe.
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Yes, I am aware of the rules, but you forget this is India, unlike the States. And when a matter can be solved without too much of fuss, why not? I would consider the legal option only when discussions break down.

EDIT - I dont see any merit for a notice either.
 
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Whatever enquiries you make - be discreet. No employer likes a member of the staff discussing merits/demerits of notice period with other staff members. It is bad for the general company atmosphere. And, yeah, no lawyers!
 
Bonds are obligations in lieu of employee development by the company. I know many people disagree to it but thats how it is framed.
Notice Periods are company policies which are normally mentioned in exhibits/annexures. These are not part of the contract obligations and are part of "working" conditions like number of holidays in a year etc. One thing which will be noticeable is policy changes are normally not enforceable on the announced dates. most of them state "starting x date" as the dissemination of information is necessary.

I am not fully clear on the question but here's my take on it. You have completed 1 yr 10 months in the company and applied for a job. The notice period was supposed to take you across through Jan when you would join the new company. When you say this year's appraisal I assume you mean March/April cycle. That would mean the policy enforcement date and chances of raising a concern has already passed. You will need to serve the notice period.

Given the huge hike, there are some options:
1. Check your leave policy. Many companies pay money on accumulated leaves during final settlement. So if you have 10-15 days leaves unused, you can use them to haggle out 10-15 days early exit.
2. Negotiate with your future employer. Try and persuade them.
3. Negotiate with your manager, if he is someone you think is reasonable. I have seen asshole managers who make you complete NP even on bench and others who wont stop you as they are happy for your progess
 
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AFAIK, bonded labour is illegal in india. Therefore in the case of an employee hired under a bond, that bond will never be valid in a court of law. Since it almost never comes to that stage in India, there are two ways an employer can practically maintain their 'hold' on an employee.
  1. Take a 'bond' amount upfront. Again, this is illegal, but it's an easy way to get an employee who's desperate for a job.
  2. Refuse to surrender the relieving/termination letters when the employee decides to quit.
In the first case, anyone getting into a job should follow the simple rule of never pay money TO an employer. In the second, if the employee absolutely has to leave the employer, then he has to either meet whatever demands and conditions they insist on, or forfeit their relieving documents.

These are basically not applicable in the OP's case, so the best recourse here, as mentioned in the previous posts, is negotiation. There is nothing money cannot solve. Even OP is basically leaving primarily for more money.
 
@Shubham1401 Were you informed officially by HR ( Email/hard copy) of the 3 month notice period at appraisal time ?
If you were, you are bound by it. It doesnt matter if you didnt sign and accept. Since you working for them, you are bound by your company's changes of rules irrespective of what you have signed in the past. Your issue is not the bond ( illegal in India ) but the notice period.
You can talk to HR as most companies have the provision to settle this notice period whereby you can pay them your salary for the months you dont want to work for them.
Another possibility is how desperate the next company is to getting you. They can also completely or partially compensate you for the loss you will bear in doing what I stated above, I have seen it in higher management positions. But this depends if your present company wants to to settle with you.
Lastly, if you just decide to walk away from the situation, your company might or might not take legal action. They can also withhold your full and final settlement and not release you officially which will be an issue for next company.

Talk to HR and sort it out.
 
It is a misconception that employment bonds are completely illegal. A bond cannot be used a penalty clause to hold an employee from leaving and such use is indeed illegal, But as I said, it is perfectly valid to demand compensation for the money spent by company on the employee development outside of the compensation package. Training costs for instance can be recovered. However the amount should be reasonable and in line with actual cost incurred by the company rather than some arbitrary figure. The bond amount signed is typically meant as an upper limit of what the employee needs to pay. For example, if the agreed bond amount is 2 Lac and the company spent only 50k, employee can dispute it in court and the employer would be required to show proof of spending 2 Lac or just recover whatever amount that has been spent. On the other hand, if the company spent 3 Lac on the employee, the employee is only obligated to pay 2 Lac as per the agreed bond.

There are several cases where the courts have ruled in favor of employers and made employees to pay the bond amount as per the spending details provided by the employer.
 
puns said:
...Lastly, if you just decide to walk away from the situation...
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He can't walk away, they have 1 lakh of his. And yeah, he probably won't get his relieving letters (again illegal).

Lord Nemesis said:
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Indian courts are not exactly always known for fair and just judgments, and that too in favor of the common man It's usually the big fish that get the benefits of due process, and usually who has the better (bigger) lawyers. Demanding money from an employee in advance is also pretty illegal. Yes, they need to show proof of how much expenditure they've incurred training the employee, and this involves going through a legal process. It's just easier to take 2 lakhs upfront and hold him hostage right? Like when a paandu first takes your DL and puts in in his pocket, then 'explains' your traffic offence and how much you need to pay etc etc.
 
You were aware of the 3 months notice period, and should have upfront told your prospective employer about this. They would/should have buffered this in their recruitment pipeline, and that is how it usually works. There are only two things you can do:

1. Inform the new company about the 3 months notice period and ask them to extend your joining date.
2. Try to negotiate with your companies line/HR managers and get a 2 month notice period. They can account for your pending leave quota and/or ask you for a 30 working day payout based on your basic salary.

This is what will happen:

(1) will occur if they are all right to wait and understand you were confused about 2 vs. 3 months of notice, and not take it as a dishonest approach.
(2) may occur provided your current company is ready to let you go.

(3) Else they may say, we will not regard leaves / pay out to waive off 30 days - and force you to complete 90 days. They may threaten to hold back your experience letter, or pen in absconding / bad behavior on the experience letter.

See what happens and decide. Do not resign till both parties have told you their final word, and there is synonymous match. You might end up with no job.
 
Shubham1401 said:
Now with this years appraisal they have increased the notice period to 3 months (this was HR communication and I have not signed anything stating 3 months).

Problem is it has not been 2 years since I signed the service agreement, so what should apply? 2 months notice period or 3 months ?
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Consult with company HR. Or read through the policy documents. Normally the policy documents should be exhaustive covering all the cases.
 
Julian said:
He can't walk away, they have 1 lakh of his. And yeah, he probably won't get his relieving letters (again illegal).
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Where did the OP mention that the company has taken 1 Lac money from him? The OP only mentioned that he signed a bond worth 1 Lac. That just means that if he decides to leave before the bond period is up, he will have to pay the due amount. Of course, he will not be getting his relieving letter till be settles all pending matters with the company. Its no different than how an employee will not get his relieving letter till he hands over company assets like laptop or phone. There is nothing illegal about it.

Also, FYI, No legitimate company requires you pay a bond/deposit upfront. Its not even a question of legality. Any company that demands a money deposit from employee prior to start of employment can be deemed to be a bogus/fraudulent company involved in employment scam and often, the primary revenue source of such outfits is the employees themselves. Any time you see this, you can rest assured that you are looking at a big label announcing them to be a bogus outfit. It does not matter how big they claim to be or how many employees are already in their trap. The only thing that keep these sort of outfits alive is the ignorance and naivety/stupidity of the people who end up paying to join them. It is sort of like handing over your debit card along with the pin to a stranger. You are literally begging to be taken for a ride.
 
In the first post he said bond with 1 lakh bond money. If he hasn't paid any money then he should just walk away if the new employer is fine without a relieving letter.
 
Its not bonded labour which is a very serious crime, far from it. This is a contract wherein the company expresses a fixed tenure in lieu of the money they put in training. One might feel its unfair but thats how things go when we in desperation for a job let companies take advantage.

And walking away is a bad idea. For one, its not only the new employer but 3rd,4th and every employer after needs to be fine about it. Because they will ask for experience certificate, if there is none, they will discount the 2 years of service. Second, companies if part of NASSCOM can input information in National Skills Registry and show the status as blacklisted. Though I have only heard of Infy treating this seriously, you never know.
 
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