How to Handle an Employee Secretly Working for Another Company Without Resigning?

Dear Seniors,

Recently, I have come across a situation where one of our employees had joined another organization while still being employed with us. Additionally, he neither resigned nor informed us of his actions. After working in this manner for a week, he eventually came forward and submitted his resignation, requesting immediate release. However, when his Head of Department did not accept his resignation, he disappeared and continued working at the new organization.

I would appreciate your suggestions on how to handle such a situation.

Regards,
Anindita

Hi Anindita,

In this case, you will hold his last month's salary, send him an intimation to pay the company the notice period amount. If he fails to do so, you can hold his exit letter and PF process. His new organization will call your company for a reference check. At that time, you can provide the feedback.

Regards,
Gaurav Vedak

Since you have employees who are interested in joining other organizations while they wish to keep the current one, why not develop a policy to manage such situations?

Here in the Gulf, we have arrangements called recruitment by secondment, where one organization chooses an employee from another organization to work for them for the purpose of working on a project, obtaining experience, and for various other reasons. They continue to receive their salary from their current organization and receive additional compensation for their efforts in the other organization. This frequently occurs between organizations in the same sector, whether it be the Oil Industry, IT Industry, or any other industry, allowing for an exchange of employees.

It's quite a refreshing process as you get to work with different people, obtain experience, learn new skills, and transfer knowledge. The duration of the secondment can be agreed upon between the two organizations, typically ranging from 2 to 5 years. The reason for the minimum of 2 years is that it usually takes at least 6 months to settle in before the actual work begins.

Dear Anindita,

I think Mr. Gaurav Vedak has a good amount of experience. Just follow what he says; that's the right procedure. Also, have you provided him with an appointment order (mutual understanding agreement)? if not, you can't do anything. If yes, you can contact the concerned company's HR and discuss this further. In the future, please make sure to issue appointment orders with do's, don'ts, and comply with the particular statutory laws existing in your company.

Thank you, Mr. Gaurav Vedak, for your kind comments.

Regards,

A.R. Pasanth Lal
HR Manager
9003997717

Dear Anayaat,

You are right, and it's possible. However, in India, it's bitter. In some regions, people jump off due to laziness and fringe benefits. Apart from that, they may bring loss to the company by stealing data for fringe benefits too.

Regards,

A.R. Pasanth Lal
HR Manager
Email: bansi_hr@yahoo.co.in

Dear Friend,

Few inputs which you can consider:
a) Withhold his settlement and clearance.
b) Adjust his settlement dues towards notice salary. If there is any shortfall, send a letter to him asking to pay the shortfall amount.
c) Write a letter to his current employer informing that he has left the organization without proper clearance and you are contemplating taking legal action against him.

Withholding PF is not possible as PF amount can be claimed even if the employer refuses to forward the claim.

Regards,
BHAVAN

Dear Anindita,

As mentioned by our elite members, issuance and acknowledgment of the appointment letter by the employee is essential, which will be useful in situations like yours.

The appointment letter will clearly specify the notice period for severance, agreed upon by both the employee and the employer.

In the scenario you have described, there is little that can be done if the employee continues to work for another organization. Please understand the intense competition in industries where competitors may seek to destabilize each other's workforce. Therefore, the organization where your former employee is currently employed may not prioritize obtaining his relieving letter as long as he remains with them. It is possible that the new organization has taken measures, such as a bond agreement, to retain the employee for a specified period. Consequently, the previous relieving letter may not hold much weight.

Additionally, please confirm if you have acknowledged his resignation letter and provided him with your acknowledgment. If there is no record of receiving the resignation letter, you may consider his absence from work as unauthorized and initiate disciplinary action accordingly.

To address this situation, you may withhold his unpaid salary, Full and Final Settlement, Bonus, etc. Furthermore, you can notify his current employer that he has not completed the handover process and is working for them.

By taking these steps, the most you can achieve is withholding any outstanding amounts due to him. However, it is important to recognize that you cannot compel him to return to work as before.

Please contemplate these points carefully.

Best of luck.

Dhinakaran

Hi Rajiv,

The days have gone when a company asks for a reference check. Moreover, as an HR manager, you cannot stop the PF process; you can only delay it. In my opinion, nobody can prevent these things as nowadays there are more options available, so you can't stop staff from moving from one place to another.

Regards,
Rajiv Madan

Dear All,

Please think from both sides. Presently, I have seen that some employers are dismissing their employees in senior categories without any compensation. In such situations, employers are ignoring all rules and regulations. These types of acts are happening almost every day.

If an employer is unable to take care of employees, does not have a system to measure employee performance, skills, qualifications, knowledge, responsibilities, or if employees are not receiving benefits according to their work experience, they will leave the organization.

Therefore, employers should implement policies such as PCS, KRA, appraisals, competency assessments, and job mapping.

Daya N. Sharma

Dear All,

Thank you so much for all your helpful feedback. I will get back again for any queries and doubts of mine and my organization.

Thanks again.

Regards,
Anindita

1) A charge sheet can be issued for his unauthorized absence from work.
2) If a service bond is executed, one can file a civil suit for the recovery of money.
3) In the case of a breach of the contract of service, he can be sued for damages.

All of the above are possible provided that the employee's whereabouts are known; otherwise, the entire exercise would be futile.

Dear All,

Happy morning.

To a certain extent, the views of Gaurav are right, that is, when the organization/company particulars are known to us. None of the companies are really coming back for a reference check except for Government organizations/PSUs. As one of our members mentioned, the new organization may not be interested in his relieving letter. In such a case, the only option is to withhold all his final settlements, if not already paid to him. Money matters, of course. Another important aspect is if the terms of appointment are not clear with respect to separation from the company, like serving a notice, stipulated notice period, etc. In what way can we stop employees from resigning today and joining somewhere else tomorrow? This has become quite common nowadays. Even in a PSU, this is happening where there are set rules and policies for such things. Even the address mentioned by them in their enrollment forms is fictitious sometimes. Where disciplinary action has to be initiated, the employee is nowhere to be traced. The correspondence for their payments, final settlements, etc., happens through e-mails. Most of the time, any physical communication sent to them is returned undelivered as the address is not found/does not exist. Though Government rules may sometimes seem to be outdated or stringent, without verification of proper antecedents, they never hire employees. At least one proper communication address has to be there.

Holding the wages or not disbursing the wages on the due date is a violation of the law for which the employer shall be liable to pay a penalty.

Let me be more precise about your doubt. I suggested holding on to the PF process, not stopping it. Holding PF means that when an employee wishes to withdraw or transfer their PF (after employment of more than 6 months), the necessary forms are submitted to the company. This is the point where you can delay stamping and signing. Therefore, instead of the usual 3 months, the duration can be extended to 6 months.

Additionally, conducting reference checks is crucial in today's age. Once the offer letter is issued, background verification should be initiated simultaneously. Based on positive and valid feedback from the previous employer, the appointment letter can then be issued. This practice helps the organization in selecting the right candidate for the right job and prevents issues like the one Anindita faced, ultimately reducing recruitment costs.

Regards,
Gaurav Vedak
Manager - Human Resources
[Phone Number Removed For Privacy Reasons]