Sushilkluthra@gmail.com
Consultant In Legal Matters
Gr8ashish
Senior Manager Hr

I had recently joined an IT Company as senior HR . Here we train freshers for 1 year and then put them on client side for work (VLSI) on our rolls. During training we give them a stipend of 25k and get committment from them to work for minimum 3 years with us post completion of training. Now if anyone breaches the bond in between and ask for reliving, experience letter without paying back the training fee which we incurred as expense on him on prorate basis, can we legally hold the experience/reliving letter. In such cases we are not holding anybody's full and final settlement. But for experience letter can he legaly file a suit against us. Please guide
11th May 2015 From Canada, Toronto
Although the employees have signed bonds but they commit breach of the bond and do not pay the bond amount/pro rata damages and in these circumstances, can the relieving letter/experience letter be withheld.

There are statutory provisions under some Shops and Establishment Act e.g Delhi Shops and Establishment Act which requires the employer to give experience letter at time of leaving. Similarly under Model Standing orders, where applicable, there is requirement of issuing such certificate failing which the authorities can compel employer to issue the certificate. Now leaving aside the legality of bond provisions, will it be proper to not issue such certificates to such type of employees, who have committed breach of bond. Firstly, the meaning of relieving should be understood. By issuing the relieving order, the contract of service is determined. But in order to safeguard the interest of employer, the relieving may be made conditionally. The legal action may be pursued separately to recover the legally tenable damages out of the bond agreement. The following are extracts of few cases in which relieving was done conditionally:

i) Madras High Court

The Registrar Of Co-Operative ... vs G. Manoharan on 21 October, 2009

“Here, the first respondent was suspended on the eve of the day on which he was to attain the age of superannuation. No relieving order was passed.”

ii) Supreme Court of India

Bhagirathi Jena vs Board Of Directors, O.S.F.G. And ... on 31 March, 1999

“The appellant was relieved on 1st July, 1975 by the Corporation "without prejudice to the claims of the Corporation."

iii) Delhi High Court

Lucas Indian Services Ltd. vs Sanjay Kumar Agarwal on 25 August, 2010

“The appellant company in a letter dated 4.12.1999 informed the respondent that his services would be relieved subject to certain conditions specified therein among which one was the re-payment of loan advanced by the appellant company to the respondent.”

If you do not issue such certificates with condition to the employees who have resigned but with breach of bond, they are to be treated to be continuing in service of the company. Such employees must be removed from pay roll of company in order to keep the registers of employees updated and to ward off any of their future claim of continuity of service as held in the above Madras HC decision.

It is appropriate that a relieving letter with condition may be issued to such employees on the following lines. It serves dual purpose, namely, it safeguards interest of employer and gives such sort of employees an unusable relieving letter:

“His services would be relieved subject to conditions specified herein, which inter alia, include that he has failed to repay the liquidated damages payable by him in respect of bond dated ____ executed by him in favour of the company and his relieving shall be without prejudice to the claims of the company to recover the liabilities due from him.”

It may be pointed out that in case the employee has cleared his dues then in case of non issuance of such certificates, the employee can seek interim mandatory injunction from court to obtain such certificates without any conditions.

It is subject to views of other ld. persons.

Thanks

Sushil
12th May 2015 From India, New Delhi
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