Legal Trouble Over Notice Period: Can My Former Employer Charge Me for Legal Fees?

Hi Friends,

I was employed by a company 2 years ago. I was with them for 4 and a half months. I had to quit due to personal issues and had informed my boss about this both via email and in person, to which he agreed. I also sent an email stating that I would pay the notice period as I couldn't serve it, which they acknowledged and replied that they would get back to me. However, to date, there has been no communication from them regarding the amount I need to pay.

Suddenly, after 2 years, I have received a summons from the court asking me to be present for an inquiry.

I discussed this matter with the HR of the company, and they finally agreed but demanded a sum of 50,000 to be paid. Only 4,000 of this amount is for my notice period, with the rest being for the company's expenses towards legal proceedings against me.

Is it permissible for a company to ask for money spent on legal proceedings against an employee?

Please advise me on how to proceed.

Can I file a case against them for demanding money to drop the case?

Kindly suggest.

Sruthi,

The company has the right to sue you under the following circumstances:

- If your actions have resulted in a huge business/financial loss for them.
- If your terms of employment insist on serving the notice period (not paying the Notice Pay, as required by some critical profiles), the company has the right to challenge you in a court of law.
- If you have breached any of the clauses of the terms of employment or confidentiality, or any other service agreement therewith.

Understand that you have not been relieved by the issue of a relieving letter/service certificate as proof of your service rendered. This stresses the fact that any communication to you should be initially served on an Internal Memo. If not replied to convincingly, it should be served with a legal notice seeking a reply. If the company is still not convinced, they can summon you from court demanding your presence in court for an inquiry.

The company cannot, at any cost, claim for the money spent on legal proceedings against you, which will not stand valid in the eyes of the law.

They can argue on the claim for "Notice Pay" due to them + damages for the delay in payment of the same (which if entertained by the court, will be valued by the court itself).

I hope you are in possession of all the formal documents proving your association with the company (Offer Letter, Appointment Letter, Salary Slips, and Email Communications stating your claims with HR). This will help you defend your side if all this leads to a legal tangle.

I would advise you not to file a counter-case against the company now, but to consult a lawyer at the earliest, present your case to him/her with all documentary evidence, and reply to the court through the lawyer.

If you need further advice or suggestions on the legal aspect, you can visit the below site, which will be very useful:

Lawyersclubindia - Law, Lawyers, Advocates, Law Firms, Legal Help, Legal Experts, Judgements, Social Network for Lawyers, Legal Community, Law Help, Indian Lawyers

For any queries, get back.

Thank you, Mr. Sriram, for your reply.

I have a few more queries.

1. What action will the court take in such cases?

2. They have claimed that I've joined the direct competitor and that I have leaked confidential information stating the name of the competitor firm - which is absolutely false. (As this is false, will the same stand before the court?)

My appointment letter says, "By 90 days notice served by either side or by payment of basic salary in lieu of notice or unexpired part of notice period or remaining absent for a period of 90 days on account of ill health/any other reason, without notice or payment in lieu of notice on you being found guilty of any gross default or misconduct or for non-observance of any rules of the company or terms of employment.

Provided always that in the event of your serving the notice/termination of contract, the company in its absolute discretion may require you to serve the entire notice period. The decision of the company is final and binding, and it shall be lawful for you to take up employment elsewhere during the notice period."

Sruthi,

What actions the court may initiate are purely under the jurisdiction of the court and are subject to the claims/evidence from both parties. You should not in any way be worried about the actions/decisions of the court, as you have the right to oppose the claim and defend the same with the help of a counsel/lawyer.

Joining another competitor can be challenged in court only if you have signed a contract/agreement with a clause stating that you will not immediately join a direct competitor for a stipulated period of time after getting relieved from the present employer. The confidentiality clause applies during the period of employment, and the employer expects the employee to maintain confidentiality of internal matters/processes/systems/trade secrets. In case of a breach, the employee is liable to be sued in court.

The contents of the Appointment Letter as referred to by you are not very clear. I could only understand that the notice period is 90 days. If you wish not to serve the same, the basic salary in lieu of the entire notice period is to be reimbursed to the company. In the case of early relieving, the basic salary on a pro-rata basis for the balance period left in the notice period is to be reimbursed.

Then, it describes the disciplinary actions in case of misbehaving/misconduct by the employee and the necessary serving of the Notice Period. In your case, you have initiated the resignation, and the above condition of disciplinary action doesn't apply.

I hope your queries are answered.

Don't hesitate to meet a lawyer; they can give you a different perspective on the issue and guide you in a better way.

Dear Sruthi,

Was there a non-competition clause mentioned in your appointment letter, or was there any contract of non-competition entered between you and the company? Also, was there any specific time mentioned in the non-competition contract or clause you had entered (if any) with the company? If the answer to all the questions is no, then please do not worry and represent yourself via a lawyer.

Even if you had entered a non-competition clause, there is not much to worry about because the non-competition clause cannot be exercised beyond two years at the maximum. Please keep all the communication made by you with the company ready to be produced in court to prove there was no malice in mind.

Also, if the company HR has in writing sought Rs 50,000 for settling the case, then please use the same to file a case under IPC and file the case against the Directors of the company. For the time being, don't worry; this is a very small matter.

Regards,
Octavious

Thank you for your input.

There was no non-competition clause in the appointment letter. My query is, as I am ready to pay the notice period (which I've already mentioned in my resignation email, for which they even replied stating they will revert back on the amount to be paid), can they still go ahead with the case accusing me of being absent from duty?

Dear Sruthi,

Please follow the advice given by Mr. Warrier and Octavius. However, if your appointment letter had separate clauses for "Probation" and "Confirmation" with specific mention about the notice period (e.g. during Probation one month and upon confirmation 90 days), then there is no need to pay 90 days' notice pay as you worked only for 4 and a half months, which normally comes under Probation.

The best thing would be to consult a lawyer and send a reply as the employer may harass you in case you signed a service agreement that contains clauses favoring them.

All the best,
Gopal

Lesson Learned: Importance of Serving Notice Period

One small lesson learned for others - always serve a complete notice period! If not possible at all, in any case, get a formal relieving letter. This is what I advise everyone!

Regards

Hi,

In my appointment letter regarding notice of termination: The appointment is liable to termination by giving three months' notice on either side. The company may, however, at its discretion pay one month's salary in lieu of the notice. I have already resigned from the company on 10th Feb 2011 and given 3 months' notice to the employer. Now, the employer is asking me to leave and offering to pay for the work done along with one month's salary.

Can I take legal action against the employer as per the above terms? Please help me immediately at [Login to view].

With regards, R E