Facing a Legal Notice from My Former Employer: Should I Pay the Rs. 50,000 Demand?

Hello Friends,

I am Naveendra Singh from New Delhi. I am in trouble and looking for the solutions from all of them who are on this site.

Well, my problem is that five months ago, I joined a company XYZ. They were looking for a graduate, and I was doing my MBA through correspondence. I could not reveal this fact to them because it might have been a reason that could have cost me this opportunity. I needed that job.

After working there for one and a half months, I was supposed to give my final MBA paper, for which I needed at least one month's leave because I had to study and submit many projects there. After work hours, I had no time to compromise my study.

In the end, I decided to leave that job because they were not allowing even a single day off, and I was not in a position to tell them the truth. So one day, my friend informed my senior that I would not be able to come to the office because I had been in an accident.

After that, I was busy with my studies and changed my number as well. In May, I received a termination letter because I left the company without prior notice.

Now the situation is, yesterday I received another letter from them regarding a legal notice to pay an amount exceeding Rs. 50,000. I was in the probation period.

In my appointment letter from the company, it is mentioned:

"You will be on probation for six months from the date of joining; however, probation may be extended by the company at its discretion. During the probation period, the company may terminate this contract at any time without cause upon not less than 60 days' prior written notice to you or compensation in lieu thereof. However, the company may, with cause, immediately terminate this contract if you are found to be in material breach of any of the terms of your employment and the company policy. You may voluntarily terminate your employment for any reason upon providing prior written notice to the company, the period of which shall be 60 days' prior written notice. It is mandatory for you to serve the notice period, and it is your responsibility to complete your handover during the notice period before resigning from the company. If you choose not to serve the notice period, the company reserves the right to recover from you compensation towards all expenses incurred with regard to any training and development, special education, upskilling, or on-the-job training provided to you in the course of your employment with the company in addition to losses and damages actually sustained by the company. The foregoing term is a condition precedent to your acceptance of this offer letter."

Can anybody help me out of this worst situation as I am in a dilemma whether to pay this amount or not. I need your help as soon as possible.

Regards,
Naveen :-x

Dear Naveendra,

Of course, this was the condition of appointment to serve a notice period of 60 days during probation. However, it will be difficult for the company to recover this amount from you. Therefore, in my view, do not pay anything to them and keep quiet.

Regards,
JS Malik

Hello Friends,

I am Naveendra Singh from New Delhi. I am in trouble and looking for solutions from all those who are on this site.

My problem is that five months ago, I joined a company XYZ. They were looking for a graduate, and I was pursuing my MBA through correspondence. I couldn't disclose this information as it might have cost me the opportunity. I needed that job.

After working there for a month and a half, I was supposed to take my final MBA exam, for which I needed at least a month off to study and complete projects. I had no time after work to focus on my studies.

Ultimately, I decided to leave the job as they were not granting me any leave, and I couldn't tell them the truth. One day, my friend informed my senior that I couldn't come to the office due to an accident.

After that, I focused on my studies and changed my contact number. In May, I received a termination letter for leaving the company without prior notice.

Now, the situation is that I received another letter from them yesterday demanding a sum exceeding Rs. 50,000, as I was in the probation period.

My appointment letter states, "You will be on probation for six months from the date of joining; however, probation may be extended by the company at its discretion. During the probation period, the company may terminate this contract at any time without cause upon not less than a 60-day prior written notice to you or compensation in lieu thereof. However, the company may immediately terminate this contract with cause if you breach any terms of your employment. You may voluntarily terminate your employment by providing a 60-day written notice. It is mandatory to serve the notice period and complete handover before resigning. If you do not serve the notice period, the company reserves the right to recover expenses for training, development, education provided to you, and any losses incurred. This term is a condition precedent to accepting this offer letter."

Can anybody help me out of this situation? I am in a dilemma about whether to pay this amount or not.

I need your help as soon as possible.

Regards,
Naveen

Dear Naveen,

You have been terminated by the company, and compensation is only required if you self-terminate the contract without a handover. In your case, the company never took the time to investigate the matter and served you notice. So, technically, you don't owe them a single penny.

If they still insist, then do drop a mail stating that the money they are seeking is in violation of the statute of the land. It is them who should compensate you for causing mental tension and stress by trying to extort money under the pretext of a false and baseless civil case.

Regards, Octavious

Dear Naveendra Singh,

You don't have to pay a single penny and just forget all this as a bad dream. At the same time, you should be careful before signing any contract. A contract creates legal obligations, and you can be in trouble and grow up if you want to quit the job; then do it in the proper way (through resignation).

A plus point for you in your present issue is that you had not left the job; they had terminated you. As you informed them that you had met with an accident and hoped that they had not sent you any letter/notice for absconding (mentioning you to join the organization). So, there is negligence from their side as well.

No need to pay the amount. However, you should be aware of the fact that when you get a new job with another company and show you worked with this XYZ company, there would be two issues:

1. You would not have a relieving letter.
2. When a background check happens, this company may not have good words for you, so your new employer might come to know of your absconding, which may not be good.

You have made a mistake as per the job rules because you must inform your current company about your problem. However, you do not need to worry about the recovery. Remember to keep your termination letter in safe custody; it will be helpful for you in any legal matter.

Shailendra Gupta

Dear Naveendra,

Relax and just don't worry; they cannot try you in any court. You were on probation when you got terminated. You are not a workman so you cannot be tried in the labour court. Just ignore their notices.

Regards,
Amit

Dear Naveendra,

You had mentioned, "So one day my friend informed my senior that I would not be able to come to the office because I had met an accident."

So verbally, you were the person who had hinted at terminating the contract.

And see below a quote from your statement:

"If you choose not to serve the notice period, the company reserves the right to recover from you compensation towards all expenses incurred with regard to any training and development, special education, upskilling, or on-the-job training provided to you in the course of your employment with the company, in addition to losses and damages actually sustained by the company. The foregoing term is a condition precedent to your acceptance of this offer letter."

Now speaking the truth - THE MISTAKE IS ON YOUR SIDE.

You concealed the fact about your studies because you wanted that job.

(Honey, do you know how much time and money is spent on closing a position? You don't! OBVIOUSLY - well, it's time-consuming! FYI!)

You lied about a made-up accident so that you could not actually work there anymore.

Lie, lie, lie! What a lie!

And finally, when you received a termination letter, you want to see how "Legally" you can avoid the situation.

They can show a no-show proof, and can't they still state that since you did not appear for a particular number of days, and that itself implies that you have breached the contract of providing notice, you have terminated the contract by yourself.

Look, you chose to lie for a safe career (did you ask anyone like this - should I reveal about my education status or not?)

You lied about the accident (why did you lie??? Because you wanted to avoid paying the breach penalty?)

I am not saying that my words are right, but just one clarification... after you did so many things from your end, which you yourself admit were purely because you wanted the job... why do you think this side of the issue alone must be legal?

Just like how you want to be away from paying so much, won't the company also think that they must receive justice?

Think twice, yaar, before you could make a fool out of others, the same thing can hit you back in life.

Mental stress? Baseless civil case? Wasn't it the employee who caused all this for the employer? Come on, we all know that he lied for a good job. He initiated it!

That is all fine whether to pay back the money or not, legal or illegal notice. One thing is sure: whoever comes to know about such an instance through this forum is certainly not going to induct him into their organization, at least for obvious reasons.

Therefore, it should be a lesson for you and others as well not to lie to their employers, whatever the case may be.

Hey Naveen, don't worry as nothing can happen. No company can take legal action against you when you are not well (as you have mentioned that your friend told you that you met with an accident). So, chill dude.

Yes, 100% true Asha... till the victim (?) here got a legal notice from the company, he might be telling all and sundry that he fooled the HR people, and when he got a stinker, he is asking for help from the HR community... very smart. I am really astonished to read some of the advice given by senior members. Please don't encourage this kind of action, which is detrimental to the HR department as a whole. At least remind him what his mistakes are before telling him "don't give a damn."

While I agree with Asha on her points, I doubt whether the employer would be hardy enough to pursue this case in legal terms. My advice:

1. Sit tight - nothing could possibly happen.
2. If the company sends you a show cause - then it becomes serious. Hire a lawyer.
3. Declare bankruptcy (Use a lawyer for this process - initiate immediately).
4. Sit back and enjoy the mess you have created.
5. Don't do this again.

Regards

Dear Trinity,

I am not strong in law but have a little knowledge of it.

3. Declare bankruptcy (Use a lawyer for this process - initiate immediately)

If he does so, won't the bank/financial activities over the last few months be checked and audited? Won't his accommodation (whether rented or owned) be scrutinized? Won't his assets be examined? They will definitely explore all possibilities of him pledging them. Won't his so-called "fake accident" be investigated to determine if that accident has caused him to lose anything physically, making him unable to work again?

Law is not something to be taken lightly or played with. How about a scenario like this: "Okay, this guy meets with an accident, he feels he can't work, doesn't inform the company about it (when you can act foolish, the company can act on the truth), and eventually, he goes bankrupt!!! Boom! What a story!"

Naveendra,

Do you know one thing? The more you fabricate such false evidence, when exposed, you will not only have to repay the company your notice period pay but also face legal consequences for submitting false evidence and attempting to build a case on "bankruptcy" - so...think.

For one lie, don't tell another 100 lies!

Try communicating with the company and reaching a compromise. If you believe you can go legal - trust me, truth prevails forever. If not now, someday you will have to face the consequences.

Be an example - a good example.

"While I agree with Asha on her points, I doubt whether the employer would be brave enough to pursue this case in legal terms.

My advice:
1. Sit tight - nothing drastic could possibly happen.
2. If the company sends you a show cause - then it becomes serious. Hire a lawyer.
3. Declare bankruptcy (Use a lawyer for this process - initiate immediately).
4. Sit back and witness the mess you have created.
5. Don't repeat this mistake.

Regards

Hi Sudesna,

I must address some concerns I have regarding your recent interactions with the company. Firstly, it is important to maintain a high level of professionalism in all communications. The incident you mentioned, where your friend informed your senior about your inability to come to the office due to an accident, should have been handled differently. Proper communication channels should have been followed, especially when it comes to matters like absences and resignations.

It is essential to be transparent about your qualifications and to communicate clearly during the interview and training process. Hiding information or being unclear can lead to misunderstandings and issues down the line. Additionally, taking a one-month leave during your probation period may not be acceptable in most companies, unless under exceptional circumstances like a severe accident.

Lastly, changing your contact number without informing the relevant parties can be perceived as unprofessional and may reflect a negative attitude. It is important to maintain open and honest communication at all times.

I hope you take this feedback constructively and use it as a learning opportunity for future interactions. Thank you for your attention to these matters.

Best regards

Dear Colleagues,

Here I share the view of colleague Ash Mathew. Mr. Singh has wronged the company in more ways than one. I wonder, why the members of this community should think of helping a wrongdoer? If a member of this community is wronged, then it is definitely a different matter. On the other hand, if a member has wronged anyone else, should we still think of rescuing him from the consequences he has created for himself? Should we not have some self-imposed standards?

In my opinion, this is not a trade union; but rather a professional community whose conduct should inspire the confidence of the managements, trade, government, and other sections of society. More than anything else, we should build this profession on some basic ethics and a code of conduct for all members of this community.

I welcome the views of our colleagues.

R. Sundararajan

Dear Naveen,

You hadn't mentioned whether you signed any non-judicial or judicial bond. In non-judicial bonds, you don't need to worry; you are not at all bound with the company.

Regards,
Deepak

Do not worry too much about it. The company's case will not stand to win. Keep quiet. The only issue, like our colleague mentioned, is that in the case of another job, if they check the antecedents, then you have an issue. But surely, do not worry about it.

Regards,
B. Dakshina Murty

It has been understood from the previous lines that the member involved in this situation has admitted to making a mistake and is seeking help. Therefore, there is no point in discussing the situation as if it were a court or tribunal.

A suggestion or help is being sought to address the mistake that has been made. Considering the circumstances, the member is being asked to pay Rs 50,000, which is not a small amount.

So, it is advisable not to escalate the situation further and instead offer suggestions to the member, not the employer. Additionally, the member should not worry, particularly if they have not resigned or expressed unwillingness to continue the job. In this case, it was the company that terminated the service, so there is no need to pay the amount.

If this situation continues, legal action can be taken.

KB

Ps:

Members are kindly requested to provide suggestions with the criticality of the situation in mind, and to refrain from giving suggestions akin to those of a Division Bench.

Don't worry; nothing is going to happen. Sit back and relax. When super moderators and all others have replied in your favor, a few handful members of this site HR have replied otherwise in favor of the employer because they want to prove that they are the best in judging the situations based on the given facts. Let them feel happy.

SK

Dear Mr. N,

There is nothing wrong on the part of the employer insisting on the notice period compensation as this is the terms of the employment which you had agreed to and signed. However, your employer cannot demand compensation at his will; it should be to the extent of your 60 days' pay.

Regards,
Madhav

Hi Naveen,

I completely support what Ash Mathew has stated. When you are in an organization, be a professional and don't cry foul when you commit a selfish mistake and are taken to task for it. What kind of professionalism are you showing when you accept that you simply stayed away from work for an endless period and did not even bother to tell your employers the truth and ask them either for leave for your studies or resign from the job in a proper way. Let us for a moment assume that you had continued and they had not paid you as per the contract, would you have kept quiet? Any job contract is two-sided, and when you sign an agreement, you also commit to accepting the terms and conditions of the offer. If they have sent you a notice claiming the amount as per the terms and conditions of your appointment, you have to pay the amount. If you don't do that and the company wishes to pursue legally (which is what I would do if I were working in that company), they can spoil your future employment and also can drag you to courts and make you spend a fortune on defending a weak legal case.

I do not support causes that are not justifiable, and in your case, you have no justification for what you did. Even now, go to your employers, explain to them the reasons for your leaving, and request them to amicably settle the issue. Charge the expenses to your "lessons learned expenses" account.

Regards,

Krishnan

Dear,

Do not worry. Such clauses do not stand in any court of law, and hence, you need not pay. While accepting the job, the employee is not in the same standing as that of the employer, and as such, any contract made under such contract is void. However, I would suggest that you may have submitted an application informing about your sickness or any such excuses and proceeded on Leave Without Pay (LWP).

It is very surprising that a lot of members seem to advise other members to be unethical, ignore notices, willfully dishonor contracts that they signed because it is inconvenient to them now, etc., because "nothing will happen, courts will take time."

Just because the party issuing a notice is a company, does it justify the actions of Mr. Naveen? Would all of us here react the same way if the company had asked the employee to walk out and not honored the contract?

I firmly believe that we need to be truthful and not provide unethical suggestions and advice to members. I agree with Mr. Krishnan when he says that Naveen should talk to his former employers, apologize to them, and then take responsibility for his actions.

Girish

There is no investment made by the company in terms of classroom training. At the same time, you were working for nearly 1.5 months and were paid a salary, not a stipend. They have not offered the position of a trainee. These are old techniques used to retain employees in the company so that they do not leave the organization. Don't worry. Nothing happens.

R. Dave

Hi Naveen,

You may get away with this case; remember, such practices outside the country will make your life miserable. Breach of trust is no excuse. This is an example of overselling one's qualifications. Now that you are out of the organization, heave a sigh of relief. Legally, nothing will or can happen to you. Let's fast forward by another 7 years. You are a CEO of an organization, and you find one of your employees has done the same. What would you do? Send emails to everyone, find solace, and say, "Leave him?" And if the entire organization does?

My advice is, "Speak the truth at all costs. If you work for an organization with inhibitions or carry dead weight with you, wherever you go, you will perform below par. As you grow in an organization in the future, say it loudly (this experience) to all your colleagues and ask your juniors not to make these mistakes."

Warm Regards,
Prof ANOOP NAGARAJAN

Just Keep Quiet. Nothing will happen. Signature on this offer letter/appointment letter is not valid as a legal part. However, don't repeat such types of things in the future; it would be dangerous to your future endeavors.

You need not pay the amount. Do not share your experience with XYZ Co with your new employer.

---
If you have any further questions or need assistance, feel free to ask.

Dear Naveendra,

Mistakes have been made both by you and your ex-employer. However, anything you put in writing now can be used against you, including your postings on this site! It is advisable not to pay the amount demanded by the company unless they get a court order to that effect, which could easily take 3-5 years.

In the meanwhile, think about how you will explain the entire episode to a potential employer who will sooner or later learn about it. (Remember: Honesty is the best policy!)

Gerry

Hi,

I believe that the contract will be void if you or XYZ becomes silent. There is surely no need to sit in peace but consult an Industrial Dispute handler. I believe the first thing to be done is to understand the $50,000 your company is asking you to pay and which specific expenses it is against. Secondly, you are supposed to pay for your compensation towards all expenses incurred regarding any training and development, special education, upskilling, or on-the-job training provided to you during your employment with the company, in addition to any losses and damages actually sustained by the company.

Only if you have not undergone any such activities, then there is no need to worry; otherwise, you can negotiate to reduce the amount.

God bless you.

Singh

Dear Mr. Navin,

The best way to pull yourself out of this trauma and tension is to visit the employer once and clear all clouds by convincing them to drop the charges. I feel they will definitely consider your ignorance of the law, and you may be relieved from this mess. But please don't repeat this with employers as you may land in trouble, potentially spoiling somebody's opportunity who is genuinely in need and deserves that job.

Navendra,

You need not worry at all and prepare for an MBA. No one is going to take you to court. Stop receiving any letters from the company in case they are coming. Even if you receive anything, nothing is going to happen. Hence, relax and concentrate on your forthcoming exam.

Regards,
Ramendra

Dear all,

All this talk about "Just relax and forget about it" is too risky if the employer is serious. There are many organizations that do not compromise and try all possible means to recover the amount. Naveen should know from his experience how serious they are about chasing such individuals. From your worries, it appears that they are not going to easily forget this forgettable experience.

I endorse the views of Ash Mathew. I am shocked at the response of many of my peers. As HR professionals, do we advocate unethical behavior? Is this site meant to promote unethical practices? I hope not. It appears there is a common belief that the law will never catch up, yet this has proven to be the downfall of many scoundrels. Remember, each time a politician is in the dock, he proclaims to the whole world that he has tremendous belief in the Indian Judicial system and that he will emerge unscathed from this episode.

The feeling that since the company has terminated you, you are not liable to reimburse the notice period salary is a fallacious argument. The termination has been brought upon yourself, and the organization has only regulated it by issuing the termination order. The legal position is clear on this point. From the appointment clause, it looks clear that they have a strong case to seek the notice period payment.

Knowing all the circumstances as above, it is for you to decide how much risk you can take.

KK Nair

It is shocking that some members have advised, like union leaders, and in the process made Naveen commit even more mistakes. This forum is for HR professionals, and as a senior HR professional, I must say that what Naveen is trying to do is avoid penalties or even going to meet the employers to sort out issues.

Let me assure those of you who have said it is not possible to go to court and recover money, etc., that in our company, we have done that very successfully and in short durations. It is not easy for an employee to fight a case in court and also take care of his career progression elsewhere. It is best for him to meet the employers and try to sort it out with them with minimal damages.

Is anyone who has advised Naveen not to worry about the legal notice willing to hire him in their company? I am sure the answer will be a big NO. Let us be fair in our advice and keep the employers' interests in mind too.

Krishnan