Notice period rules in India: a guide for employers

A free guide. Notice periods cause more exit disputes than almost any other clause. Here is how they usually work in India. This is general information, not legal advice.

Is there a legal minimum notice period?

For most office and managerial employees, no single national law sets the notice period. It comes from the employment contract (the appointment letter), the company's service rules, or standing orders where these apply. Some state Shops and Establishments laws set minimum notice for termination by the employer. For employees who count as "workers" under the Industrial Relations Code, 2020, retrenchment generally needs one month's notice (or wages in lieu) plus retrenchment compensation. Check what applies to your state and to each category of employee.

Typical periods

• During probation: commonly 7 to 30 days, or none for very short probations.
• After confirmation: commonly 30 days for junior roles, and 60 to 90 days for senior or specialised roles.

Make the clause mutual (the same for both sides) and state it separately for probation and after confirmation.

Salary in lieu of notice

Most appointment letters let either side end employment early by paying salary for the unserved notice period. Specify whether "salary" means basic pay or gross pay, because this is a frequent source of disputes. If the clause says nothing, there is room for argument.

When an employee doesn't serve notice

• You can generally recover pay in lieu of the shortfall if the contract provides for it, usually by adjusting it against the full and final settlement.
• Don't withhold the relieving or experience letter indefinitely as leverage. Settle the amount as the contract allows and document it. Withholding documents can expose you to complaints and harms the employee's next job.
• Very long notice periods with heavy penalties are hard to enforce. Courts look at whether a clause is reasonable.

Early release and garden leave

You can choose to waive part of the notice period (early release), or ask the employee to stay away from work during notice while you keep paying them (garden leave). Both should be allowed for in the appointment letter and confirmed in writing when used.

Final settlement timing

The Code on Wages, 2019 generally expects wages due on separation to be paid within two working days of the employee leaving. Plan the handover so the settlement is ready.

Templates

The notice clause in our appointment letter template (₹199) covers probation and post-confirmation notice, salary in lieu (you choose basic or gross), early release and garden leave. The relieving letter (₹149) has wording for when settlement is still pending. All four letters: Starter Pack, ₹449.