Can you please explain the scenario in case of termination? If a company is terminating someone’s services and wants that employee to work for the 3-month notice but the employee refuses to serve the notice period, what happens. Does company have the right to deduct 3 months pay or balance notice period pay?

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Answer: Yes, the company has the right to deduct an amount equal to the balance of the notice period.
It is the same way if you give a 3-month notice and the company wants you to leave immediately.
In case there is a mutual agreement between both the parties it is okay otherwise the party which doesn’t complete the notice period has to pay.