An employee resigns with a 60-day notice period. Then comes the request: can he serve 100% attendance in month one and 50% in months two and three, effectively stretching 60 days of work across 90 calendar days? He is leaving to start his own business, he has been a decent performer, and he is asking nicely. What do you do?
This is not an abstract policy question. It is the kind of situation HR teams at Indian startups face constantly, and the stakes are higher than they look. Every exception you make to a notice period policy becomes a data point – for the employee who got the exception, for every other employee who heard about it, and for every future exit conversation where someone asks why they should not get the same arrangement.
Why Notice Period Policy Is Harder for Startups
Large companies have the luxury of standard processes. The policy says 60 days, the manager enforces 60 days, and exceptions are rare enough that they do not create expectations. Startups operate differently. Founders and HR leads often have direct relationships with every employee, flexibility is part of the culture pitch, and saying no feels harder when you know the person.
But the flexibility that makes startups good places to work can quietly become a policy vacuum if it is not managed deliberately. Notice period exceptions fall squarely in that category. They feel like individual accommodations and function like precedents.
“Best to not set up a precedence like this one. It will be chaotic for future exits.” — Shivali, HR Lead at a Series B startup
The word “precedent” comes up consistently in how experienced HR professionals talk about notice period exceptions. It is not that individual accommodations are always wrong – it is that each one implicitly writes a new version of the policy, and that version spreads by word of mouth faster than the written one.
Notice Period Policy in India: The Legal Baseline
Under India’s new Labour Codes, which came into effect in November 2025, notice period terms are primarily governed by the employment contract rather than statute. The Codes do not prescribe a universal notice period – they require that the terms be clear in the appointment letter and that both parties adhere to them.
What this means practically is that startups have significant contractual flexibility in how they structure notice periods, but the flexibility cuts both ways. An employee who wants to negotiate their notice period has the same leverage as the employer – the contract. If the contract says 60 days, both sides are bound by it unless they mutually agree to change the terms.
The new Labour Codes also tightened full and final settlement timelines significantly, requiring completion within two working days of an employee’s exit. This is relevant for notice period discussions because it shifts the financial exposure from the employer to a tight post-exit window. HR teams negotiating early exits need to factor in the FnF timeline when structuring any modified arrangement.
When Flexibility Is the Right Call
There are legitimate situations where adjusting a notice period makes sense for the company. Complex handover processes that are already complete do not require the full notice period. Roles with no active pipeline or incoming replacements where serving notice creates cost without value. Employees who are genuinely heading to a non-competitive venture where retaining them for 60 days serves no real business purpose.
“If there are no complex handoff processes needed, I would suggest giving him the option of buying out his notice period.” — Sumit, People Ops Consultant
The buyout option is often cleaner than a modified attendance arrangement. The employee pays a defined sum (typically equivalent to the notice period salary) and gets a clean exit. This is administratively simpler, avoids the ambiguity of tracking partial attendance across months, and sets a cleaner precedent: the policy holds, but there is a formal mechanism for early exit if both parties agree.
Notice period buyouts are common enough in Indian startups to be expected at senior levels. The key is that the buyout is structured – it should be in writing, have a clear payment amount, and be referenced in the exit documentation so it does not look like an informal favour.
The Partial Attendance Problem
The specific arrangement in the scenario above – 100% attendance in month one, 50% in months two and three – creates a different set of problems than a clean buyout. It extends the employment relationship across three calendar months while reducing the actual work contribution. This creates ambiguity around deliverables, performance expectations, and what it means to “serve” a notice period.
From a tracking perspective, it requires HR and the manager to actively monitor partial attendance against a custom schedule that exists nowhere in the standard policy. From a team perspective, it signals that the employee is leaving and operating at half capacity — which affects morale and productivity for the people who remain.
More importantly, it is harder to say no to the next time. A buyout is a transaction with a defined value. A modified attendance arrangement is a judgment call, and judgment calls invite negotiation about the terms of the judgment.
Building a Notice Period Policy That Holds
The companies that handle exits cleanly are not more rigid than others – they are more explicit. They have written down, in advance, what the standard process looks like and what exceptions are available. Employees know before they resign what their options are. HR is not making it up as they go.
A reasonable starting framework for startups: standard notice period in the contract, a buyout option at a defined rate for employees who want to exit early, and a waiver option that the company can grant at its discretion for roles where the handover is complete. All three paths should be documented and applied consistently across levels and teams.
The goal is not to be inflexible. Startups that cannot adapt to individual circumstances will lose goodwill on exits that are otherwise healthy. The goal is to be consistently flexible – where the flexibility is structured, predictable, and does not reward the people who negotiate loudest at the expense of the people who do not.
That is a harder thing to build than a rigid policy. It also lasts longer.
