Designing a Recovery Process: How Do Different Organizations Handle Legal Implications?

Hi Everyone, I am in the process of designing a recovery process for my organization. I need to understand how it functions with various organizations and also need to know about the legal implications aspect.

Thank you.

Apart from White Eagles' informative attachment on the recovery of dues, I may chip in with the following information in the context of legal implications.

Legal Implications of Recovery of Dues

1. The P.F. amount cannot be attached or charged even under a court's decree/order against any debt or liability incurred by an employee as per Sec. 10 of the P.F. Act.

2. Similarly, gratuity cannot be forfeited against any financial loss caused by an employee unless he is found guilty of any misconduct in a domestic enquiry resulting in such a financial loss as per Sec. 4(6) of the Payment of Gratuity Act 1972.

3. The Payment of Bonus Act permits a bonus to be adjusted against any loss recoverable from an employee due to the misconduct of an employee as per Sec. 18 of the Bonus Act.

4. Other dues payable to the employee like leave encashment or arrears of salary, if any, can be adjusted against any dues payable by him to the company under the right to general lien.

5. Set up an NOC procedure from the department in which the employee is working before relieving him from his service.

Regards,
B. Saikumar

HR & Labour Law Consultant
Chipinbiz Consultancy Pvt. Ltd
Mumbai
Mob: [Phone Number Removed For Privacy Reasons]

Hi All, kindly share some recovery letter formats which would be sent to the employee and also a standard operating procedure that should be followed.

Thanks.

Hi Everyone, I am in the process of designing a recovery process for my organization. I need to understand how it functions with various organizations and also need to know about the legal implications aspect.

I have just resigned from an organization. When I took the appointment in the organization almost six years back, the appointment letter I signed stated that if I leave the organization for any reason, I cannot take a competitive assignment or approach their clients for business.

I have joined an organization that is obviously in the competitive business, as they have taken me up for the core expertise I have in the field. Now, the old organization is holding back my Gratuity amount for engaging in competitive activities.

I would appreciate your advice.

Dear Saikumarji,

I have just resigned from an organization. While taking the appointment in the organization almost six years back, the appointment letter, which I have signed, states that if I leave the organization for any reason, I cannot take a competitive assignment or approach their clients for business.

I have joined an organization which is obviously in the competitive business, as the new organization has taken me up for the core expertise I have in the field. Now the old organization is holding back my Gratuity amount for engaging in competitive activities.

Request your advice.

Regards,
Nand
[Phone Number Removed For Privacy Reasons]