We are a manufacturing company and faced many problems with marketing people, they leave the job without clearing their dues from market. Therefore to take up legal action management wants to issue an appointment letter on stamp paper. kindly guide me.
From India, Ajmer
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Dear Luxture,
Greetings !!!
It's a kiddish notion. Your appointment letter on company letter head is as valid a document as a stamp paper.
In stead of looking at legal options to handle such cases, in my opinion, you should look at your recruiting practices, in order to have good hires. In addition to that, make a provision for notice period, so that whosoever is leaving the organization, transfers his/her responsibilities and exit becomes smooth.

From India, Delhi

sir thank you for the kind response, we do have notice period provision. But still in market due are left. We have the handing over process also. My question is only in the context when after following all HR practice still, we are facing such problems.
From India, Ajmer

Dear Luxture,
Usually as a standard practice, Appointment Letter is prepared on the company's letterhead with all the terms and conditions stated. The salary breakup and also the notice period is mentioned in the appointment letter. Penalties in regards to non adherence to the notice period is also mentioned in the appointment letter.
One an employee accepts the Appointment Letter after joining an organization, he / she accepts with all the terms and conditions stated by the Company. Incase the employee leaves the Company and does not adhere to the clauses of notice period or final settlement as mentioned in the Appointment Letter, then the Company has rights to take a legal action against that employee.
Since, Appointment Letter is signed by the authorized signatory appointed by the Company, therefore, Appointment Letter can be made on Company's letterhead also. Preparation of appointment letter on stamp paper is not necessary.

From India, Mumbai

No need for stamp paper. Letter Head would do. Things could get complicated as candidates would hesitate to accept Stamp paper and move could back fire
From India, Madras

The problem may not be in your HR Process and systems. Problems may be in Sales Process. Ask your management to examine the Sales Process which includes collection and accounting, This step in sales process is very critical and unless your management address this issue law cannot help you. Many organisations have addressed this issue with latest Technology and improved on collection and accounting
From India, Chennai

stamp paper is not a valid document unless it is registered. Never heard of appointment letter in Stamp paper. Pon
From India, Lucknow

Dear Luxture,


You may be following HR practices but are you following right practices in right way! Some of the members have rightly pointed out the drawbacks of having appointment letter on stamp papers. You need to understand that even if you want to take some legal action, a company letterhead is as valid a document as stamp paper.

In addition to this, you should also agree with the fact that a person may not be able to recover/collect all dues in the notice period unless and until your notice period is as long as three months or so, and in this period you do not tell your employee to initiate new sales and be focused only on collection.

One way to curb this menace at your organization to have innovative salary methods directed at retention. The way that comes to my mind is :

1. Hire candidates at 10 - 15 % higher than average market salary. You will get quality candidates who are serious about their job and it will be difficult for them to find jobs in companies from same industry becoz their package will be higher than average.

2. Retain the extra 10-15% in fixed deposits of bank. Give your employee normal bank interest on this amount.

3. Have a time period , let us say one year, before you make this payout. This will stop employees from going away before completing this period.

4. If they still leave, the money shall be left with you.

From India, Delhi

Dear Sir,
Your Letter Head is Enough. But if u have any doubts on the employee, u can take separate written document from that person. There is no need on stamp paper. It is enough on white paper also. That document is legally strong and if possible try to take two witnesses also.
Thanks & Regards,
J. Srinivas M.s.c LLM

From India, Hyderabad

The moment a candidate accepts the terms and conditions of appointment, issued in your company's letterhead, by way of signing and returning the duplicate copy, it is legal and binding on both the parties. As my learned colleagues have mentioned above, you need to look within to change the policies relating to recruitment, employment etc. There is an old saying " When you pay peanuts, you get only monkeys". Therefore, find why your employees leave abruptly, how is your compensation structure when compared with your competitors, where your employees are joining, whether or not improve the working conditions etc. Further, please remember that in no organisation, employees join and retire from the same company. These days, opportunities are abundant and people keep moving across the organisation, cities, countries. Nobody is indispensable but at the same time, too much of exodus beyond 15 to 20% per annum, indicate that there is something wrong with the organisation.

So do some introspection first.

Best wosjes

From India

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