Ashish Gupta
Asked July 13, 2016

Notice Pay

  • 1 Answer

what is notice pay (basic / Gross) if company has issued a letter where it is mentioned only word salary what that means and they are paying only basic salary. what does our Act/ Rule say about notice pay as a standard .Some companies are paying basic pay or some are paying gross pay ? what is right ? Please clarify me.

Answer 1

The time period provided to an employee by the employer between the date of receipt of the dismissal letter and the last working date is referred to as the Notice Period. This notice period is usually a pre-decided span of time and the payment made by the employer to the employee for this period is the Notice Pay.

Even if the letter issued by the company is not very clear as to the Notice Pay, in most of the cases, the notice period and notice pay are clearly mentioned or described in the Standing Orders of the company, whereby a clear definition of the word ‘salary’ will be provided by the company.

Laws in India are not very comprehensive with regards to the ‘Notice Pay’ and have mostly been left to the discretion of the individual companies.  S. 9A of the Industrial Disputes Act, 1947 [1]deals with the issuance of notice in case of any change to the nature of the service, setting the minimum notice period of twenty-one days.

In the absence of such Standing Orders, ‘salary’ may include your basic salary plus dearness allowance as this is the general policy followed by the companies in India.  The best way to establish a clear understanding of your position would be to approach the manager or any authority of the company to clarify their meaning as to the word ‘salary’.







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