Is It Legal to Hold Employee Certificates? Navigating Risks and Responsibilities in Manufacturing

Good Morning All,

Our company is a manufacturing company, and these days I am finding it difficult as employees are just absconding. Some members of the management team have advised me to collect original certificates and store them safely for a period of 3 years as per our company policy.

Now, my concern or doubt is: can an employee take legal action if, unfortunately, a certificate goes missing or if, after some time, they demand their certificate back and we refuse?

Regards, Vidya

Hi,

I would like to suggest that you keep the originals for a short-term basis until the documents get verified by the issuing authority. Please keep the xerox copy with you with proper assistance from the concerned authority. Keeping the original documents with you is quite risky, so it would be better to adopt the same.

Hi Vidya,

I don't think there would be any legal implication on keeping the original as I know some companies are already doing this. But you need to ensure that documents should be kept safe. Only for verification, you can keep it, and that can be for two months only as this time would be enough to prove the authenticity of the letter.

Hope this resolves your question.

Regards,
Shweta

Holding the original certificates is not a crime. However, not returning the originals in time will definitely attract legal action. Some employees may claim huge amounts, citing the reason that due to the non-return of the original certificate, he/she lost certain opportunities and hence should be compensated.

Therefore, it is not advisable to keep the original certificates of an employee. To achieve your goal, you may withhold some amount from the CTC (stating it as an incentive to be paid at year-end or so).

If you get into legalities, to the best of my knowledge, no company has the right to take the original certificates of any candidate. This means the company is binding an employee in an indirect manner. Even if you consult any labor consultant, he/she will say the same.

Anyways, good luck.

Thank you all, I would take up the advice of Mr. Parasurampur, and also totally agree with Mr. Shravanskumar that as per the law, we cannot bond the employee after a certain period of time.

Regards,
Vidya

Hi, it is not advisable to keep originals with the HR department. Even a company cannot make a policy on this (keeping originals). It can be short time for verification purposes. It's nothing but forced labor.

Regards,
Sudhi

Dear,

The question is "Original certificates, except for comparison, cannot be retained. It is like someone holding a property that does not belong to him. You may get into legal issues if you openly claim as you are doing it.

With Regards,
V. Sounder Rajan

E-mail: rajanassociates@eth.net

Well, you must have read the establishment and labor-related articles as well. If not, you can go through some on your own. It is really wrongdoings by the company or its management. Is it like in the British Era? It sounds like you are taking people for granted and making them your slaves. Just think and imagine yourself, what is your opinion about it. Other people have already replied to your query, so think about yourself.

Regards,
Dilip
Bangalore

Dear,

It is not legal to take the original documents of an employee. The company's policy is wrong. If you take their original documents for three years and suppose you leave the company, then who is responsible for taking care of the original documents of the employee if their documents are lost by the company after you have left the job? If the company claims that you lost the original documents while on duty, what will happen to you? A FIR may be filed against you.

So, please do not engage in bad practices.

Thanks,
Subodh

Dear all,

Thank you very much for the thread and comments posted by everyone. Ours is a hospital where we have recently started collecting the original documents for Nursing and Front Office staff. This decision was made by management due to high attrition rates and the problems we initially faced. Now, attrition has decreased significantly as employees think twice before resigning because of the penalty clause. One of the directors is responsible for controlling the originals, which are kept in a safe locker. The process is as follows:

I will collect the original documents, issue a letter detailing the required documents, and then hand them over to our director for safekeeping. If employees need their documents, they must pay the equivalent penalty as per the bond, and then we will release the documents.

After reading through the thread, I will be more cautious and careful about document safety. Could anyone please suggest if I am wrong or provide any control measures?

Thank you.

Dear Mahesh,

The duty of HR professionals is to maintain a harmonious relationship between the employer and employees. Employee instability can disrupt company operations, so the employer's interests cannot be ignored.

On the other hand, a certificate is akin to personal property for an employee. Its value remains intact even when held by the employer. Employees seek to ensure the safety of their certificates and job security with appropriate compensation.

If the original certificate is kept with the employee's consent and is safely returned when needed, there should be no objections. Such practices are common in many companies.

In the 1980s, I used to retain the original driving licenses of our HMV drivers with their consent for temporary out-of-station duties. The licenses were returned upon their return, and I never encountered any issues or legal concerns during that time.

Thank you.

Sir,

I want to know if there is any law against companies keeping original mark sheets. I am working in a Software Company, and they have taken my original mark sheet from class 10. Can you please tell me if there is any rule or regulation that I can use to claim them for taking my mark sheet? I had to submit the mark sheet while looking for a job, and I am currently working here. Please help me!

Piyush Kesharwani
9611055680

Dear Vidya Joseph,

You have already received some good suggestions and opinions. I think the best solution to such dilemmas is to put yourself in the shoes of that person; a.k.a. EMPATHY. Would you be happy if someone does this to you? If employees are absconding en masse, is it the fault of the employees or your "management team" (who give such toxic suggestions)? What would you do if your so-called "management team" advises you to keep the workers bound in chain (like slaves)? Do think over all these questions (I would be happy if they provoke you) and remember that HRM is a specialized area that requires certain knowledge and skills, and not everybody is qualified or competent to give 'advice' to HR persons on such matters.

Warm regards.

Respected Mr. Rajan,

I am intrigued by the response you have posted above. Many organizations now retain the original certificates of the employees in connection to the service agreement which has to be signed and accepted by the employee. Can the employee who has absconded file a legal suit against the organization for withholding the originals? Is it legally accepted if an organization files a lawsuit against the absconded employee if the service agreement is not made on a stamp paper? I would like to know the genuineness of these procedures.

Expecting a response.

You are 100% correct. Nobody has the right to collect the original certificate legally. However, a bond duly signed by the new joinee, agreeing to the stipulated period, can be obtained.

Regards

Penalties for Breaking a Service Bond in India

In India, what are the penalties that an employee faces if they break a service bond midway? Also, at the time of signing a bond, does the employee need to submit any educational certificates or degrees as a guarantee? In such cases, can the employer retain or not return the certificates or marksheets if the service bond is broken by the employee midway through the bond period?

I have been informed by an individual that he joined an IT company in Bangalore by signing a service bond. When he left the job midway before the completion of the bond period, his educational certificates and testimonials were not returned because he had broken the bond. Is it true that companies in India retain a candidate's educational certificates and do not return them if the employee breaks the bond period midway? Is this true?

I don't know the government rules on this topic, but either the employee or employer will face problems if collecting original certificates or not.

Employee Perspective

If an employee submits their certificate, they may feel like they are becoming a slave to the company.

Employer Perspective

If the original certificate is not received, the employee may leave the company in a short period. If the employee quits, the company will suffer the following losses:

1. Training expenditure loss.
2. No benefit to the company as the employee is new to the process or work, and the employer cannot expect more business within a short period from the employee.
3. P.F and E.S.I expenses will be lost to the company.
4. Time and food expenses will be lost as the employer has to search for another candidate for the same position.

Let's decide who is losing more.

Hi, I got placed in a private company. I checked the details of the company, and it is an ISO certified company. However, they asked me to work on a bond basis (2 & half years) by keeping my original certificates with them. If I break the bond, I have to pay 50k. Now, I have doubts - what should I do if they don't pay the salary correctly or if they give me a heavier workload than I expect?

Verification of Educational Documents

Calling for original educational documents for verification is perfectly acceptable. Taking a Xerox copy and verifying qualifications is legal. However, retaining original documents as a measure to prevent attrition or compulsion is illegal. Educational certificates are the personal property of the employee and cannot be retained against the will of the employee.

Addressing Employee Attrition

If employees are frequently leaving, then examine your company practices and human relations to find a solution. Change those policies that cause employees to leave frequently.

Regards