Notice period buyout rejected? Know your rights

When an employee is offered a job with a different company, they often wonder whether they can negotiate a buyout of their notice period. However, the truth is that there is no legal obligation for an employer to accept payment instead of requiring the employee to serve the notice period. According to Gerald Manoharan, Partner at JSA Advocates & Solicitors, the employment contract is the governing factor in whether a notice period buyout is possible.

If the contract states that the employee may terminate employment by giving notice or making a payment in lieu of notice, the employee has the choice between the two options. The new Labour Code, 2020 does not provide explicit provisions for resignations or notice buyouts, leaving the topic to be governed by contract terms or state-specific shop and establishment laws.