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We are 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 appointment letter on stamp paper. kindly guide me.
16th September 2013 From India, Ajmer
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.
16th September 2013 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.
16th September 2013 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.
16th September 2013 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
16th September 2013 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
17th September 2013 From India, Chennai
stamp paper is not a valid document unless it is registered. Never heard of appointment letter in Stamp paper. Pon
17th September 2013 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.

17th September 2013 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
18th September 2013 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
18th September 2013 From India
Dear Member
Rather than having offer letter on Stampaper, You can introduce a Bond during the Joining. The terms of the bond should be clearly mentioned in the offer letter. The Bond will be a Legal document and If any one breaches it shall face action ( Except in some Cases-Medical , etc)
18th September 2013 From United States, Buffalo
The company letter head is enough for the offer and you may have look on below suggestions.
1. Making a bond (1/2 Years) with employees at the time of joining.
2. Keeping some caution money in monthly salary with your side and that should be aware of employees. That can be provided at the time of final-settlement if he/she is a clean exit. If you are giving travel allowance, Give the allowance for last month along with the current salary and current allowance in next salary.
3. Pls have a look into the employees problem or the reason to leave the company without clearance.
4. Try to resolve the employees problem in market and The relation between the manager and employee.
Thanks Regards
Praveen Devadiga
Asst. Manager - HR
18th September 2013 From India, Bangalore
The issue are not clear in your question. Under what circumstance the marketing people are supposed to clear the dues ? why legal action is to be initiated against the employees who have either resigned or vanished ?
will you please enlighten me in this matter
18th September 2013 From India, Bangalore
Dear Luxture,
As others said letter with your terms & conditions duly signed by the authorised signatory and accepted by endorsing thereat should suffice. But if you choose it should be on a stamp paper it doesn't perse invalidate the contract between you and the candidate. What is more important is your offer, unambiguous, specifying the T & C which are legally valid and the acceptance of the same by the candidate.
20th September 2013 From India, Bangalore
Hi Luxture !
As pointed out by others, your question is not clear enough. What I understand is that the Sales People leave while the accounts they are handling still owe the Company some money. And you want the sales people to leave only AFTER they have collected such monies.
If so, rather than the sales people you need to look more closely to your Credit Terms .. if all the sales people are doing is follow those, then how can you hold sales people responsible for a management policy ?
And, as said by others also, stamp paper will only make good people shy away..
20th September 2013 From United States, New York
Don't give this to anyone with your Stamp. It become that employees is on permanent basis. Give on Letter head only if possible otherwise give on plan paper with your Authorize Stamp and Address Stamp.
20th September 2013 From India, Ludhiana
Dear, you can draft a confidentiality & agreement letter & add the clause reg. the concern matter as you mention above. Regards, Abhinav Tripathi
20th September 2013 From India, Varanasi
Appointment letter on stamp paper is not going to solve your problem. One effective, but not very professional, option will be to ask the employee sign a bond and deposit a refundable surety amount with the company. To some extent, this will make the person follow the system when he wants to leave the company.
20th September 2013 From India, Bangalore
Dear all,
Thank you so much for the great response indeed, I got the directions and took out the middle level conclusion of win win situation, as we have issued appointment letter on Letter Head and the conditions which was important for us, we took them on stamp paper.
21st September 2013 From India, Ajmer
just need a clarification on the same. what if the employees left without serving the notice period. Even though we having a provision of Serving notice period. What to do with those guys who went absconding.???
23rd September 2013 From India, Chandigarh

"we have issued appointment letter on Letter Head and the conditions which was important for us, we took them on stamp paper."

:-) Sorry but You have missed the whole point completely. A company letter head duly stamped and signed by the authorized signatory is and will always be considered a valid LEGAL document in any court of law and tribunals. So if you have done what you said you have done, then believe me it hasn't changed the status quo except for the fact that now you feel mentally reassured... A sense of false security has been created...That's all.

But the issue still remains. Why is it happening? and happening so frequently that you are pressurized to look at ways to ensure they can be

forcefully stopped. Why? why not just look at the root cause and remove the cause and have a happier organization.

Are you or the management even aware of the implication of taking legal action against an employee for this purpose? Very soon the news will spread and you will stop getting good or even average guys to join you. The only people who will join you would be misfits who are either desperate or don't have skills to be employed anywhere. Yes this problem will stop but so will organizational growth.

Every sale has three components... Price, delivery and payment terms. If money is stuck in the market, then you definitely need to look at your order acceptance process. I can understand one person or maybe 2 leaving you like this but the way you have reported this issue, i presume that the number is quite large and hence high receivables are being reported... but that's a sales process issue not a terms and conditions issue...

But To each, His own... Cheers!!
25th September 2013 From India, Delhi
As said by me as well as several others, this seems to be an issue of credit Terms/ Sales Process which are put in place by the Management with little - if any - control of the Sales Person.
Am curious to hear from the Questioner as to if indeed this is the case. If so, and even then they are getting " employees" accepting their terms on Stamp Paper well then those " employees" must be either desperate or foolish. Both of which are not happy signs...
Just my thoughts...
1st October 2013 From United States, New York
Dear Luxture,

Appointment letters with all the conditions of appointment, with an enclosure of acceptance format is usually designed and issued on the company's letter head duly signed by the concerned appointing authority of the company.

Issue is about action regarding "The vanishing employees, who are supposed to collect the market dues and to make them responsible or how to initiate legal action against them"

This happens when the sales or marketing employees are entrusted with cash collection of sales proceeds. When a sales or marketing persons are entrusted with cash collection,the usual practice is to collect an undertaking of acceptance to deposit adequate Security or Caution Deposit, before duty report. In few cases an undertaking on non-judicial stamp paper along with Two sureties and also with Two witnesses is being taken before accepting his/her duty report. When an undertaking is being taken on company's letter ,along with two witness, it is more than enough. How ever few companies who are over cautious, usually collect such an undertaking on non-judicial stamp paper.

Please consult the Soft Drink/packed food/ Commercial gas distributors for appropriate method they follow, because such practice of cash collection at the time of delivery is in practice.

I feel your concern is addressed


3rd October 2013 From India, Bangalore
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