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Old 30th March 2010, 12:19   #1
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Default Notice Period Buyout

To all HR professionals out here,

How does a notice period buyout happen ?
The employee finds out the buyout amount. He then intiimates the new employer of the same. Couple of questions here

- If the new emloyer pays the old employer directly I guess there are no issues. But does this happen?
- If the new emlpoyer pays the employee the buyout amount. But the candidate wants to make a quick buck and has faked the buyout and keeps the amount to himself. Will the new employer need some kind of proof?
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Old 30th March 2010, 12:41   #2
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well even if your new employer agrees to buy out your notice period, you still need to get it cleared from your Project/Account Manager.

The ultimate decision on when to relieve the employee will be with the PM. Hence in case you are planning some mischief, i would advise you to first buy your PM a drink and talk to him in private.

I am sure he will understand!

Last edited by Technocrat : 30th March 2010 at 13:28. Reason: No mention of alcohol please. Thanks
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Old 30th March 2010, 12:41   #3
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To my knowledge, the New employer doesnt pay directly to the Old employer. You need to pay the notice period amount and then once you on board in the new company, you apply for the reimbursement. This is how it happens typically.

However, to get the buy out amount, you need to take an agreement with the HR of the New company in advance that they will reimburse that to you.
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Old 30th March 2010, 12:47   #4
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Originally Posted by COUGAR View Post
well even if your new employer agrees to buy out your notice period, you still need to get it cleared from your Project/Account Manager.

The ultimate decision on when to relieve the employee will be with the PM. Hence in case you are planning some mischief, i would advise you to first buy your PM a drink and talk to him in private.

I am sure he will understand!
Why man. When a company fires somebody, they don't give any notice. They just pay whatever is mentioned in the employment terms, and it's sayonara.

Same is true when an employee leaves a company - if the employee is willing to pay the notice money, he can leave anytime. And company can not stop him - and if they try to, any half competent labor lawyer can screw them.

Nitin

Last edited by Technocrat : 30th March 2010 at 13:28.
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Old 30th March 2010, 12:48   #5
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You need to pay out from your pocket to your old organisation; then show the amount appearing as part of the Full and Final Settlement.

The Full & Final settlement copy has to be submitted to the HR team of the new orgnisation for claim.

As Fordy has written the NP buy out has to be agreed upon by the New Organisation.
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Old 30th March 2010, 12:53   #6
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First and foremost, it is just not that if your new employer is ready to pay, you can get a buy out. Your existing company may still refuse and say that you need to serve the notice period.

Secondly, very rarely do the new companies, give you cash and say go ahead. they ask you to pay and then reimburse it later. It is not that easy to cheat them into it.

Incase they do so, they will ask you to get a signed copy from your current employer on reciept of the money, and they also follow it up later unknow to you. When it is the matter of money, no one takes things lightly.
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Old 30th March 2010, 13:01   #7
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Hi rainmaker,

Apart from all the points already given by the others please also consider one more point. some employers do put a sort of retention clause if they pay you anything over and above the CTC(things like notice period buyout,joining bonus etc) where you would have to repay your new employee this amount if you leave within a stipulated period of joining. so do keep these things in mind while negotiating.

cheers.
Perez.
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Old 30th March 2010, 13:19   #8
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Originally Posted by ntomer View Post
Why man. When a company fires somebody, they don't give any notice. They just pay whatever is mentioned in the employment terms, and it's sayonara.

Same is true when an employee leaves a company - if the employee is willing to pay the notice money, he can leave anytime. And company can not stop him - and if they try to, any half competent labor lawyer can screw them.

Nitin
unfair world i know, but thats life!!

When employees are fired they are given compensation as applicable (typically 1 months notice plus 1 months basic as compensation).

the key here is that the project doesnt suffer for whatever reason. So in case of layoffs, the PM often knows well in advance, often a month in advance who is getting fired. Infact in my previous company, the HR asked each one of us for 2 names we would have to drop from our team. And this was done almost 2 months in advance of the event: the key being to give the PM's enough time to make adjustments in team so as to ensure smooth flow in projects.

The point is, you cant make a clean break by just paying up the notice period and walking out. Your PM must approve of your exit. Ofcourse you can still up and leave. But then you lose out your experience certificate, relieving letter and stuff like that. And i sincerely hope you arent planning on pulling off a stunt like that!
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Old 30th March 2010, 13:34   #9
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Quote:
Originally Posted by Hurrycane12 View Post
You need to pay out from your pocket to your old organisation; then show the amount appearing as part of the Full and Final Settlement.

The Full & Final settlement copy has to be submitted to the HR team of the new orgnisation for claim.

As Fordy has written the NP buy out has to be agreed upon by the New Organisation.
This is correct. At least this is how we reimburse the buy-out period.
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Old 30th March 2010, 13:37   #10
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unfair world i know, but thats life!!

When employees are fired they are given compensation as applicable (typically 1 months notice plus 1 months basic as compensation).

the key here is that the project doesnt suffer for whatever reason. So in case of layoffs, the PM often knows well in advance, often a month in advance who is getting fired. Infact in my previous company, the HR asked each one of us for 2 names we would have to drop from our team. And this was done almost 2 months in advance of the event: the key being to give the PM's enough time to make adjustments in team so as to ensure smooth flow in projects.

The point is, you cant make a clean break by just paying up the notice period and walking out. Your PM must approve of your exit. Ofcourse you can still up and leave. But then you lose out your experience certificate, relieving letter and stuff like that. And i sincerely hope you arent planning on pulling off a stunt like that!
Buddy,

I have been in project management for long and said this on basis of my experience. About 4-5 years ago, a SE working in my team quit and gave a notice period of 1 week, and offered to pay notice money for the rest. That would have affected my project, so after consulting with our HR I refused to relieve him.

What happened next took us by surprise. He filed a case against us in labor court. Our company's Sr. VP - HR had to attend that case, and within one hearing labor commissioner ruled that we can not hold back his relieving and experience certificate. And we had to give him that.

If you haven't read your employment terms yet, it's a good time to read those now. It must mention something like that -

Either party can terminate the employment by giving x months of notice or paying x month's salary.

I again re-iterate, no company can forcibly made you serve notice period if you are willing to pay money in lieu of that.

Cheers

Nitin

Last edited by ntomer : 30th March 2010 at 13:38.
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Old 30th March 2010, 14:11   #11
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Quote:
Originally Posted by COUGAR View Post
unfair world i know, but thats life!!
You work for IBM?

Quote:
Originally Posted by ntomer View Post
I again re-iterate, no company can forcibly made you serve notice period if you are willing to pay money in lieu of that.
+1.

Read the documents before signing. This notice period is not really a threat.

Last edited by Spitfire : 30th March 2010 at 14:12.
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Old 30th March 2010, 14:12   #12
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I completely agree with the above point. But, also, always try going the friendly way first, because it may be easier for you to leave and they may not be able to stop, but jsut think of the impact it may have on your process.
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Old 30th March 2010, 14:14   #13
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What happened next took us by surprise. He filed a case against us in labor court. Our company's Sr. VP - HR had to attend that case, and within one hearing labor commissioner ruled that we can not hold back his relieving and experience certificate. And we had to give him that.
I am surprised and would say based on what little i know about the specific incident that you fellows werent aggressive enough. I would have asked the HR to give the b**ger his relieving and experience letter and mention specifically in both that the employee has left the project midway without permission of the PM! Give the employee the choice to either take this letter in this form or serve his notice period! If the employee does go to court what will he say? That the employer mentioned the uncomfortable truth in the relieving letter?

Give him a choice between taking this letter and serving his notice period and leave the choice to him!

If the project is affected negatively, the company has the full right to claim the damages from the employee. I am surprised that it even reached court because going to court affects long-term employability.

Think about it this way: Would you recruit someone who has a history of doing such unprofessional things as leaving a project mid-way and dragging his employers to court? I certainly wouldnt!

At the interview stage itself, calls for reference checks are made to previous company and such incidents would be highlighted on the employees profile.

I know one joker from QA in my team who jumped ship mid-way to another company. I refused to sign his relieving letter and made sure that his future employers got a earful when they called for a reference check. Needless to say, the said joker was one of the first on the chopping block when that company went in for layoffs!

Last edited by COUGAR : 30th March 2010 at 14:25.
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Old 30th March 2010, 14:36   #14
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I am surprised and would say based on what little i know about the specific incident that you fellows werent aggressive enough. I would have asked the HR to give the b**ger his relieving and experience letter and mention specifically in both that the employee has left the project midway without permission of the PM! Give the employee the choice to either take this letter in this form or serve his notice period! If the employee does go to court what will he say? That the employer mentioned the uncomfortable truth in the relieving letter?

Give him a choice between taking this letter and serving his notice period and leave the choice to him!

If the project is affected negatively, the company has the full right to claim the damages from the employee. I am surprised that it even reached court because going to court affects long-term employability.

Think about it this way: Would you recruit someone who has a history of doing such unprofessional things as leaving a project mid-way and dragging his employers to court? I certainly wouldnt!

At the interview stage itself, calls for reference checks are made to previous company and such incidents would be highlighted on the employees profile.

I know one joker from QA in my team who jumped ship mid-way to another company. I refused to sign his relieving letter and made sure that his future employers got a earful when they called for a reference check. Needless to say, the said joker was one of the first on the chopping block when that company went in for layoffs!
Buddy, you sure have some strong sentiments about it :-) That guy was going to US for higher studies and cared two hoots about what we wrote in the relieving letter and experience certificate.

And I don't see this as being unprofessional; he was only following what is written in his employment terms i.e. either the notice period or the notice money.

If a company can lay-off employees suddenly by paying them notice money; and can still be called professional. Why it can't be the same for an employee.

You are right, not many people will take this way and burn bridges with a previous employer. But if one decides to go this way, there is nothing a PM or a company can do.

Nitin

Last edited by ntomer : 30th March 2010 at 14:38.
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Old 30th March 2010, 14:45   #15
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I did this last month. I just had to show the final settlement form which I got from my previous employer to the new employer. Trust plays a key role here
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