How Can We Legally Address New Employees Leaving Without Notice in India?

Hi All,

Happy Holi!! We have had a few new joiners leaving us within 1-2 weeks of joining without getting formally relieved. This not only causes us a huge loss in terms of human resources and time but also wastes our money. Being a process-oriented company, we do take all precautions. However, you see, with almost no respect for the law in India, employees don't give a damn to employers. We have been in touch with our lawyers to prepare a case against such deserters. I would like to get your opinion on any such laws under which we can take action against those deserters.

Cheers, Sneha

Hello Sneha:

We have had a few new joiners leaving us within 1-2 weeks of joining without getting formally relieved. This not only causes us a huge loss in terms of human resources and time but also wastes our money.

Why did they leave?

Being a process-oriented company, we do take all precautions. However, you see, with almost no respect for the law whatsoever in India, employees don't give a damn to employers.

Perhaps a hiring mistake was made?

We have been in touch with our lawyers to prepare a case against such deserters.

Oh my, I think a person can only be a deserter from the military.

Bob

Dear Sneha,

The correct term used in the armed forces for a person who is absent from duty for more than 28 days without prior approval of leave is "deserter."

Have you offered him an appointment letter? Under what terms and conditions? Generally, there is a six-month probation period during which both parties can terminate the appointment with a short notice of one day. Many employers follow this practice with new entrants. If you have not provided him with an appointment letter or joining letter, there is little you can do in this situation.

It would be advisable to start searching for a good and reliable candidate.

Cheers

Hi Sneha,

Please don't waste time behind them. The approach should be that if they have left, you should address the reasons for that instead of pursuing them, as it will not yield any results in the Indian context. You are aware of how overloaded our courts already are.

Regards,
Harikeyel

Hello Anamika_UK:

This question was India-specific as such a situation doesn't exist in the Western world.

I was unaware that in India a new employee who quits can be convicted of desertion and be imprisoned or fined by the government or otherwise punished by the courts. That is worrisome given how employees can be mismanaged by their managers.

The situation is that jobs are more in demand, but candidates are less. There is more demand than supply. Candidates don't care about the employer or their future. It is a mad rush in Bangalore. They join, keep a few other offers in hand, and as soon as any other offer matures, they jump.

In other words, employers don't know how to hire employees who will stay.

Or if they have time to spare before joining any other organization, then they chill out in one organization, then dump and go to another.

Don't employers conduct background checks, reference checks, etc.?

There are other situations as well. I am sure.

There are no mistakes in hiring.

Managers who believe they cannot make mistakes in hiring are doomed to repeat the same hiring mistakes over and over again. Unfortunately, hiring managers are not perfect, so they do make mistakes in hiring. The secret to success is not to make the same mistake twice.

Hi Bob,

Reference checks are absent in India. There is no agency approved by the government for this purpose. There are a few private agencies that are more unreliable than employees.

Speaking of Indian law, they have one of the best Constitutions in the world, which is documented on paper (unlike England). The law is comprehensive and covers all aspects of life. Nothing is left untouched. After all, the best minds of that time were involved in compiling it.

The issue is that people, including most lawyers (who are lazy), are ignorant and do not want to delve into the law books.

When it comes to hiring, if you ask a candidate how long they intend to stay, the usual answer is "forever," which everyone says. If they admit they cannot guarantee that, they are obviously not chosen.

Reviewing their past employment history, the average duration is about 1-2 years per job. What mistake could a hiring manager make? You require people and need to be flexible. Projects need to be executed without hesitation.

Regarding the law, there is a provision that empowers employers to take action against deserters.

To provide a glimpse, if an employee leaves without being properly relieved, they are still officially employed, making it problematic for them to take up another job, which lawyers may pursue further. Additionally, there is the concept of liability that enables employees to take legal action.

In any case, legal proceedings have already commenced.

Hi Sneha,

In such a condition, it's better if you take a closer look into the selection process and introduce some new techniques of mind reading and questions that can reveal the hidden intentions of candidates. You might be either rushing through the appointment process or not focusing on the core of recruitment/selection.

Regarding legal actions that can be taken, a new employee can be held liable to pay for training expenses if they have signed an agreement with the company to do so and have also signed the appointment letter. Dropping out at this stage will not have any impact on them, and pursuing them further will only result in a waste of your time and resources.

Sneha, all that this will lead to is that genuine applicants will feel scared to apply to your organization and may cause your current employees to feel suffocated. Why don't you try to check if something is wrong in the induction/orientation process itself that scares the employees or makes them want to run away...

What is the general attrition rate in your organization? I agree that the situation is bad in the IT/ITES sector, but we need to look inward to understand what we can do to retain the employees and what other companies are offering that we are not able to. Believe me, salary is not the only criterion...

Hi all,

I think the issue is blown out of proportion. If any employer were serious about going after those who quit, then why do every company invest in reward and recognition programs? Attrition is a reality, and it is worrying. I have heard that NASSCOM has a charter stating that companies should not consider any resume/person who spends less than 3 years with any company (TO BE FRANK, I HAVE NOT SEEN IT). So, to curb this menace, it is better that we support and guide the employee for a longer time.

Harikeyel

Hi Sneha,

I can really relate to your problem. The recruitment process in my company is really long and drawn out. So a candidate leaving within 1 month of joining would be a waste of an enormous amount of time and money.

I agree that at times the candidate does have multiple offers while joining and switches as soon as possible. But your problem could be due to any of the three reasons:

1. Wrong recruitment/selection
2. Not good enough induction
3. Sheer bad luck

You cannot do anything about the last one, but taking a look at the first two possibilities might bring some insight (via effective exit interviews). But going after a candidate just for leaving the organization so soon (or otherwise) is really not the solution. The whole concept of 'notice period' is devised for such contingencies. So you can only do as per the appointment letter. Being angry and curing the symptom of a problem is not going to remedy the problem itself.

Regards,
Leks

Hi Sneha,

I can understand your concern because a couple of years back my company faced a similar situation. Attrition in certain departments reached as much as 28%. However, the situation has changed now and we have a very modest attrition level. I will come to the policy changes which brought about this change later; first, I will define the problem.

People were leaving within a few months after joining, and in some cases, just a few days after joining. This was happening despite the fact that the company was paying a top-line salary, at least to some employees as policy-wise they can pay high. I will just add that my company is a product company with 1000+ employees. There were two major reasons behind the high attrition:

(i) The company was not maintaining parity of the salary of people joining from service companies, government companies (DRDO, ISRO) with existing employees. This is because their current salaries were much less than our salaries. So, the company was recruiting them with some hike but still it was way behind our salary scales. In other words, they were made to join in junior positions. This was creating a problem as many in the HR department were shortsighted and they were looking at immediate benefit.

(ii) Employee satisfaction for employee benefits was not properly taken care of.

Now the salary scales have been rationalized, and the company actively tries to maintain parity. Employee satisfaction surveys are done regularly, and employee concerns are actively solved. This has solved the problem to a large extent.

I agree that employee misbehavior should be sternly dealt with, but I think the root of the problem lies with the organization and therein also lies the solution.

Hi Friends,

I understand the effort put into recruitment, and now we need to acknowledge that things are constantly changing. What we learned a year ago is no longer relevant. In this evolving environment, we must invest our time in adapting ourselves to remain relevant.

There is no need for emotional decisions; moreover, it is a waste of time and resources. Simply understand why individuals left. If you have already done so, focus on being properly informed by potential employees about their new learning during the recruitment process.

I have encountered companies with attrition rates exceeding 134%, where HR is solely focused on recruitment and lacks breathing space. Consider yourself fortunate if you are not in such a situation.

Listening to people is crucial in overcoming these challenges. We must also convey that constantly changing jobs will not always benefit them. Timely recognition and appropriate addressing of issues can lead to effective problem-solving.

The Employee Relations team needs to be more efficient and dynamic than the HR operations team. This is the need of the hour.

Regards,

Veejay

Dear Taruna,

Here are some points that can be helpful:

1. Check the candidate's past record.
2. Before giving the offer letter, do a reference check (very important).
3. Ask for a relieving letter because some people take leave from their existing company and join another organization. If they don't find it suitable, they might just disappear without any information.

I hope you find these suggestions useful.

Best regards

Hi all,

I am an employee and I am facing a similar problem from my employer. I would like to put my point before this forum and would request them to suggest some ways to me.

I was employed by a multinational company nearly 8 months back, and I joined it because of its name, though I had other much better offers in my hand at that time.

After the induction program was over, I was deployed in a project whose timings were from 1 PM to 11 PM. Coincidentally, during the same duration, my wife was ill and was even admitted to the hospital for a couple of days.

Since it was not communicated to me earlier that I would have to work on odd timings in the project, I talked to my manager about shifting me to some other project. He replied that since I was recruited for this project only, I will have to work here only.

Though he said that after some time the project will run at the usual timings (9-6) and I will not be facing any problem, I was not able to believe him as the statement was conditional (may or may not), and I was already stressed due to my wife's illness.

Because of the following reasons, I started developing a feeling of why not leave the company and go ahead with another offer that was due to expire in a week's time:

1. I was not informed about the odd timings of the project.

2. I joined the company because of the name and good work, but the project I was put into was not good enough to give me an opportunity to explore my skills.

3. My wife's illness.

4. The other offer was higher than the current offer; still, I joined this company for its name, but all went in vain.

I had to decide quickly. The same day I reported to my manager that I would not be able to continue and please consider my employment as terminated. I even formally resigned the same day.

But now after such a long duration, I received a letter from the company asking for a claim of Rs 100,000 and salary in lieu of the notice period.

I can pay them the notice period, but the claim is a huge amount.

No offense, but could you guys suggest to me how to settle this matter.

Regards,

Rahul

Hi,

I would like to know whether your resignation has been accepted by your reporting boss and HR. Do you have proof of it?

Did they provide you with any training during the induction or post-induction? If yes, what is the cost of the training?

Regards,
Vijay

No, I do not have any resignation acceptance letter. After a few days of submitting my resignation letter, I received an email from HR asking to discuss further for any alternative project, but that was too late for me to go back to the organization.

I had over 3 years of experience in a particular domain, and hence, I didn't receive any kind of training from the company for which they had incurred any costs on me. I guess the only cost that they would have incurred on me was for my hiring procedure.

Hi,

Can you guys suggest anything further on this? I am planning to request them to settle the claim amount, and I would be paying them the salary amount for the notice period as specified in the offer letter. However, I am unsure why they are asking for such a huge claim amount. I left the company for a valid reason as I was unable to cope with those timings at that time, and hence it was beneficial for both sides.

Please suggest something further on this.

Thanks and regards,
Asit

Hello,

Does your appointment letter mention anything about probation, termination, or resignation during that period? Also, do you have any clause regarding the payment of damages in your appointment letter? If so, be cautious. Otherwise, just walk away; they can't do anything to you.

Cheers!!
Harikeyel

Hi Harikeyel,

Thank you for your response. I did not receive an appointment letter from them after joining; I only received the offer letter. The offer letter does not include any clause regarding payment of damages, although it does contain a clause for salary in lieu of the notice period, which I am prepared to pay.

Considering they are a large company, do you think they will take any legal action, or should I try discussing this issue with them first as a more reasonable approach? What do you suggest?

Thank you.

Correcting the second paragraph:

"But they are a big company. Are you sure they will not initiate any legal process, or should I consider putting forth my request to settle the claim amount and receive only the notice period salary? I believe that would be a genuine approach. What do you suggest?"

I'm not sure, I may be wrong, but if they have not given you an appointment letter, what proof do they have that you joined?

Hello,

If they have not issued an appointment letter and if you have not signed any other document with these clauses during your induction, you are absolutely safe. An offer letter is nothing but an offer made by your company, and labor law states that they have to provide you with an appointment letter stating all the terms and conditions of employment.

I would suggest that you not pay the notice pay as your employer has not appointed you.

Regards and cheers,
Harikeyel

Thank you for your responses. Yes, they have not issued me an appointment letter. However, is it mandatory to issue an appointment letter because I have signed the offer letter and returned it to them? I have also signed the usual documents such as Non-Disclosure Agreements during my induction, indicating that I have been with the company for some time.

I am concerned about this situation affecting my career negatively. Do you think they would be willing to accept just the notice pay if I were to ask them to do so?

Hi,

It is important to issue an appointment letter. Accepting the offer does not mean that you have been appointed. Now, if you are thinking of leaving the company in a peaceful manner, it is important to take them into confidence by presenting the matter in some other way (like citing personal reasons, etc.).

Regards

Hi,

You are completely safe as you have not been issued an appointment letter. You also need not pay any notice period compensation. If companies cannot follow their own policies, they cannot expect employees to do the same. Without issuing an appointment letter, they cannot claim damages and/or compensation. This company may be a big name, but it also shows how slack their policies are. They have woken up after a deep slumber and thought of making some quick bucks. Reflects very poorly.

Take it off your mind, you are on the right side of the law. DON'T pay any money.

Richa

Hi Sneha,

If you have entered into a contract of employment specifying a notice period or if there is a clause in the employment letter about a bond period, then you can claim compensation for the breach of contract. Your employment contract is the foundation of a lawsuit.

P. M. Patel