I'm curious to know, when companies are large, an employee, however legally correct, cannot take a long stand in court (being practical here). Is there an easier, effective, and correct way to tackle this threat? Some organizations seem to use this as a retention policy, sadly.
Understanding Blacklisting in Indian Companies
First, let's put things straight. Indian companies threaten employees under the name of "blacklisting" them, so that they cannot get a job in the future. However, if you leave a company on short notice, abscond, or show insubordination, the employer CANNOT blacklist you from future employment. If the employee finds out that a particular employer is preventing them from future employment, they can sue the employer for an ungodly sum of money in court and WIN!! The employer will have to go to the streets.
So, don't ever, ever think about blacklisting an employee. Things don't work that way; what you see as unfair will not be unfair to everybody. If an employee disappears or absconds from your organization, think about what you can do to decrease attrition rates instead of taking unlawful shortcuts. That is the correct route. Please don't get caught in a class-action lawsuit. It will be very detrimental to the company and to your life, since the chairman will first rip you—the HR—apart, and the thousands of employees working under it. Blacklist in your own company, not everywhere else. You are lawfully safe then.
Regards.