A prospective employer is interested to buy out for early release, as they need to fill up the position urgently, can't wait for notice period to lapse. How does it work?

How to be sure that there's something solid from the prospective employer, in order to bring up the issue of resignation to current employer? Will there be an offer letter? Is it possible to get an offer letter when the starting date is yet to be firm?

And what if current employer refused to accept the buy out and disallow an early release, can it happen?

Would like to know how does this work, thanks guys!

I think the best way is to discuss with your current employer to sort this out. Normally the HR will issue an early release letter if you and your employer agree to the terms of early release. This is to ensure that you can legally employed in your prospective company on the specified date in the offer letter.

Otherwise you might be violating the employment law and the legal action can be taken against you for not serving the notice period.

Get the offer letter from the prospective employer which states the starting date clearly. Tender your resignation and then talk to your curent employer on the early release thing and request for the quoted amount. Then communicate the amount to the prospective employer so that they can prepare a cheque/ bank in the money to your current employer. This may take a few weeks which is normal. Also take note of any possible bond attached to the buy out, if any, in your offer letter/any additional document you have got to sign on.

As for the possibility of your current employer rejecting a buyout, depends on your previous offer letter. Does the resignation clause include "or payment in lieu..."? If yes, then they are obliged to accept a buyout, if no, then they can reject it.

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Added on September 9, 2012, 11:32 pmAlso to add, sometimes a buyout is not required if you can negotiate an early release with your current employer..some drama will help

This post has been edited by cutejams2004: Sep 9 2012, 11:32 PM

exactly same as my situation. going to tender tomorrow. my notice period is 3 months, future employer to buy out 2 months

going to sign LO tomorrow, 10/9/2012. LO state that "employment will commence on 10/12/2012 or such other earlier date as may be specified by the company"

so what am i going to do.

1. sign LO
2. tender and negotiate with HR, how much to pay, get them to provide early release letter
3. show future employer the release letter and they will issue cheque with the amount
4. settle with HR and handover
5. walla.

Best process:
1. Obtain LO (With buyout condition) *MUST*
2. Resign
3. Communicate with current employer and HR on release date
4. Finalised and viola

*If future employer doesnt issue any buyout condition in LO, dont bother to resign
**If current employer doesnt allow u to leave by payment of notice in lieu, speak to HR and escalate, no employer can hold any staff from leaving in this world
***If there is no firm date, please ask future employer to issue "dummy" LO, mentioning "estimated" commencement date + buyout condition

Get the new employer to write you cheque on the buyout and pay to the current company.

Normally the company will allow either party to perform buyout/ termination. Just need to read thru the LO carefully.

Hey Ace. First things first. A buy out =/= early release. They are 2 different things:-

1) A buy out is payment-in-lieu of notice by your new employer to your current/past employer.
2) Early release is the act of waiving compensation (i.e. payment-in-lieu of notice) by your current/past employer for you leaving your current employment early


Now to answer your questions:-

A prospective employer is interested to buy out for early release, as they need to fill up the position urgently, can't wait for notice period to lapse. How does it work?
Its usually a 2 stage process.

Stage 1
1) The prospective employer informs you that they will buy out your notice period.
2) Prospective employer issues you a letter of offer, incorporating the above.
3) You accept (execute) the offer letter.
4) You issue a letter of resignation to your current employer. In your resignation letter, you (politely) request for an "Early Release". Write down that you will assist and fully cooperate with a proper and smooth handover. This helps.
5) In your letter, DO NOT put a date for your last day of work as your current employer may take it negatively (you might be seen as rude - dictating the date of your last day at work) (based on my own experience and from my buddies in HR).
6) Allow your current management about a week or so to digest your notice of resignation and to come back to you with an answer to your early release request.

Now 2 things might happen here:-

Scenario 1
Your current employer accedes to your early release request, indicating they will be willing to let you leave early by xx month(s) / xx date (perhaps after adjusting against your remaining annual leave etc). If the early release date is within your expectations, thank your management and inform your prospective employer that you will be joining them on xx date.

If the date is not within your expectations (for example, you needed a 2 month early release but your employer is only willing to allow a 1 month early release, you can either 1) try to negotiate a date in line with your prospective employer's expectations or 2) accept the early release period and pay-in-lieu the difference.

For example, say you have a 2 month notice period and your current employer is only willing to allow an early release of 1 month, you then inform your new employer that they will have to compensate 1 month's equivalent notice (2mth notice period - 1 month early release = 1 month pay-in-lieu).

Do note that some employers may not accept payment in-lieu of notice if they have allowed some sort of partial early release. They may just withdraw their early release approval and force you to compensate the full 2 months notice if you attempt the leave immediately. So be clear about their expectations and negotiate fairly and politely.

Scenario 2
Your current employer responds by saying that they will not be able to allow an early release in which case you just need inform your prospective employer that they will have to buy out your entire notice period if they want you in early.


Stage 2
Now that your current employer has responded to your request for an early release (perhaps verbally or via email), follow up with another letter, this time confirming your last day of work and informing your current employer that your new employer will be compensating them in lieu of remaining notice (if applicable).

The above may not be necessary if your current employer responds in writing (there may be some verbal/email negotiation between you and your management beforehand) and confirms your last date of work (either with or without some sort of early release). You can proceed to pass a copy of this letter to your new employer to allow them to process the buy out.


How to be sure that there's something solid from the prospective employer, in order to bring up the issue of resignation to current employer? Will there be an offer letter? Is it possible to get an offer letter when the starting date is yet to be firm?
Yes. You will need an offer letter. Never ever resign without 1) signing the new offer letter beforehand and 2) passing your pre-employment medical examination with the new employer. The starting date need not be a hard date. If can be something like "at the earliest opportunity, which shall be no later than the last working day of November 2012".


And what if current employer refused to accept the buy out and disallow an early release, can it happen?
An employment is a contract. Hence, the employer cannot refuse a notice of resignation (otherwise it will be slavery, not employment). Similarly, an employer cannot refuse a buy out as long as there is "payment in-lieu of notice" clause in your employment contract (which is standard by the way).

FYI, not acceding to an early release request is the norm rather than the exception. But it doesn't hurt to try as you may be able to save money for your new employer.

I would like to know what if the current employer is expecting the buyout amount to be paid latest on date XXX (before last day), and the prospective employer only willing to pay the amount to you or your company on the first day of joining, and some prospective employers even asked u to "pay first"! Will it be risky?

If the contract states it clearly that they will pay you back, I dont see a reason not to. But is still your money, and you can always choose to decline that offer.
Sometimes is not easy for a company to release a chunk of money in short period of time as they may want you to join within 24 hours Happened to my Sis . She had to pay first, and the company paid her in full with her first month's salary.

usually we have to do all the negotiation stuff on both side? I think the prospective employer should call the current employer and deal directly with each other straight, without troubling the employees themselves right? Cos i came across a situation where i was like a middle man between them.

Just to confirm, for buy out case, the resignation notice stated in the letter shd follow no. of month as stated in my employment contract? The new co offer letter has stated a specific date for joining, after calculated, I can only serve 1 month notice (if included my earned leave to offset) n balance is on pay in lieu by new co.
Annual leave pro rated calculation shd based on the last day I with the co or shd include the pay in lieu? Eg. I tender today with 1 month served notice, 2 months pay in lieu (total 3 months notice as per contract), so my last date is 8/8/14 in old co, new co pay 2 months for buyout.
My question:
1. Annual leave prorate is calculated till 8 aug 14 or 8 oct 14?
2. Do I need to mention 2 months pay in lieu in the resignation letter?
3. Do I need to mention I would like to utilize my annual leave to offset my 1 month notice period? Eg. 1 month notice is till 8/8/14, but, new co requested me to join in on 4 aug (6 days leave to offset)
5. Wat is the procedure to buy out? New co pay b4 I join? Or after I join n old co will only release my last drawn salary after receive payment from new co?
6. My offer letter didn't state the buy out. Just verbally from new co HR. Is it normal that they need to give me a letter on buy out on my short notice?

Answers to your questions:

1. Annual leave prorate is calculated until the earlier date, not the later.

2. Normally you don't have to put it in if you've already spoken to your HR.

3. In my case, I did not mention that I will utilize the remaining leave but if possible, do let them know beforehand if you want to do so.

4. This will depend on your new co. Like what others said, some companies will ask you to pay 1st then some will pay for you outright.

5. I have not seen a LO that states buyouts including my own (it's mostly done through verbal).

Normally, you would be the one discussing the matter. To put it in a easier manner, "you can't expect competitors calling each other when they want to hire an prospective employee from the other."

Thank you for ur advise.
So, in my resignation letter, I just need to give standard resignation letter n verbally inform my manager and HR that my new co will give 2 months pay in lieu?

Put your resignation letter and specify clearly your last day of work. Your manager and HR should then calculate all the Annual Leave, whether you are allowed to offset, etc etc, and presumably give you a figure that you need to pay. Whether you pay or new company pay and how that's done is up to you and your new company.

Yes, still my advice is that you put in the dates that you will be leaving and confirm it again with your manager and HR on the "putting it on writing issue". Different companies different way of working as mine was previously done through verbally and emails.

THIS!

It's not so complicated.

You resign. You then either serve the notice period (however long that is) OR you pay the specified amount in lieu of notice. The next employer simply helps you pay in lieu of notice so that you don't have to serve the notice period and can start with them as soon as you hand in your resignation.

Your current employer cannot refuse to allow you or anyone else to pay in lieu of notice... unless you were foolish enough to sign a contract saying that this is not available.

Hey how about pay back the company and at the same time they also need to pay you back all your unused annual leave right?

Hi, ok so we need to pay back the notice to the company, but what if we also have some annual Leaves available? The company need to pay us back the unused annual leaves as well right?

Hi say I wanna buy out the remaining notice, I do have some annual leaves as well, the company will have to pay me back the annual leaves too right? How does it work?

Hello,

I have a question on the buyout option here.. Here is my scenario:

Resignation letter submission: 30 March 2015
Notice period: 60 days
Official last day: 28 May 2015 (60 days' notice)

The new employer decided to buyout for my last 20 days of notice, making my start date on 11 May 2015. My current employer agreed for me to leave on 8 May 2015.

Instead of letting the new employer buyout for my last 20 days of notice, my current employer decided to move my official last day to 8 May 2015. My current employer told me I will be only paid until 8 May 2015 instead of 28 May 2015 (60 days' notice) and no buyout is required.

My question here is that since the new employer is willing to buyout, can I request my current employer to leave my official last day as 28 May 2015 (60 days' notice) and paying me until my 2 months full notice period. So basically the new employer will pay back them the 20 days salary. In the other words, I will be getting the extra 20 days salary from current employer and the new salary from the future employer. Is this the normal process of the buyout? Do you know if my current employer have the right pro-rate my May salary (only paying me until 8 May 2015 instead of 28 May 2015 (60 days' notice))?

Thanks

This post has been edited by sh@d0w: Apr 16 2015, 04:42 PM

How did you end up?

Im facing similar situation

My previous company (Sunway) only paid me for the days that I worked up to. Which means let's say u have 2 months period. Ur future company is buying you out for 1 month. So I work for 1 month then u pay the penalty and then u leave. Then Ur current company will only pay you the one month that you worked.