How Would You Handle a Company Withholding Employment Deposits and Harassing Employees?

To All HR Professionals,

This is a story of the worst HR practices practiced by one of the companies. I don't think it's proper to disclose the name, but I still want to share this, as one of my friends was working and had left the organization within 5 months.

My friend joined the company in January 2007 at the Officer level. While joining the company, he made only one mistake: he signed and accepted the offer letter without making many inquiries about the practices that are prevalent in the company.

The offer letter consists of one condition of keeping an Employment Deposit of Rs. 10,000/- with the company for 2 years, and it will be repaid to him on his continuous service with the company for 2 years. Though he was aware of this condition, he was not aware that employees are mentally harassed and compelled to leave the service of the company within 2 years. But soon he realized while working with the company, as after his appointment, two employees absconded on the spot without any warning or anything. Of course, the employees who absconded were paid their employment deposit, but that was also after one to three months. Within that period, an employee may get frustrated, especially those who are freshers. And the employees who are tough enough or not found guilty anywhere are mentally harassed by withdrawing the necessary tools to deliver services like systems, software applications from the system, or not providing enough infrastructure, so that the employee will be induced to leave the company before 2 years. Also, the management's attitude shows that they don't need the manpower at all and that they have favored society by providing employment. This is not just the opinion of my friend but the conclusion made after discussing with his co-workers who are facing the same experience.

Now, faced with the same problem, my friend has left the job with a proper delivery of resignation, mentioning the reasons for his departure from the company. First, all infrastructure was withdrawn from his system, stating that the software installed by the company was not allowed to be used. Then the entire system was taken away from him and shifted to another person for use. Telephone use was already restricted, saying the company can control unnecessary phone calls to customers, candidates, and outsiders. Only one number was in use for local calls for five departments, and two numbers were for STD calls.

Now, my friend has left and wants his Employment Deposit, but the company is refusing, saying his accusation is wrong, and he should not have left the company before 2 years. Also, the company not only takes such deposits from Executives, Officers, and white-collar employees but also from the Drivers, Sweepers, etc. The only difference is the amount of the deposit collected is less.

I am awaiting your opinion on this.

Thanks & Regards,

Yashswa.

Dear Yashswa,

Under no circumstances can a company take money from an employee (unless the employee has taken money from the company and has to repay) and keep it without paying interest at the local market rate. It is not only illegal, but the nature of the offense is criminal and can be treated as illegal amassing of wealth to conduct business.

Tell your friend to consult a lawyer.

Regards,
SC

Dear Mr. Swastik,

Thank you for your advice. I wanted to confirm whether such money can be claimed legally or not because my friend had accepted the offer letter while joining the company where this condition was included therein and kept the Employment Deposit with the company while joining.

Thanks once again.

With Regards,

Yashswa.

Dear Yashswa,

No, keeping an interest-free deposit per se is illegal. So, unless the company has a solid legal reason for keeping it, you can proceed under criminal law.

Regards,
SC

Swastik is right.

My advice would be to lodge a case with the Economic Offences Wing; this is more on the lines of a scam. Write to newspapers too; bad publicity hurts everyone.

Remember the media coverage last year wherein headhunters were charging exorbitant sums to get freshers placed in companies. I have come across a similar case where the company was keeping a deposit and getting candidates to sign dubious documents. However, the catchline was that the company was providing them with a mobile phone and laptop that needed to be covered up. This company was hiring only desperate freshers who were not able to get a break anywhere.

I was approached by one of the candidates for advice. I spoke with a manager and told them that the company need not charge 50k as security. Since I was his local guardian of sorts, I would help the company in buying a business insurance policy to cover all risks. The poor fellow got angry and perplexed at the same time, thanks to my exposure to business insurance regulations in the UK. The result was they didn't hire him.

Surya

Hi,

Ask your pal to get out of this ASAP. Ask him to seek help from peers, get things right, start fresh, and double-check from next time.

Good luck!

Regards,
Lily

I would also suggest making the name of the company public. This would help in saving, at least a few, if not all, from being deceived into employment in the future.

Make the name public. You will save others. Report this scam to a news channel without disclosing your details, or better yet, after getting a job elsewhere. It's always better to do a reference check of the company and, if possible, of the reporting boss before joining an organization.

Hi to all,

Reporting such scams is not a problem. However, as you may all be aware, servicemen always think twice before getting involved in such matters. This issue is not faced by just one person but by all who have worked with the company. Therefore, it should be a collective action by everyone. The worst part is that nobody is interested in claiming their 10,000/- due to the expenses of 50,000/- for reporting and filing a case. The Managing Director (MD) of the company is well aware of this situation.

Nevertheless, I believe it is essential to inform others so that no one else has to suffer. While I will not disclose the name, I can mention that the company operates in the healthcare industry, primarily focusing on thyroid testing. Recently, the company has started offering interest on Employment deposits at a significant rate. However, my friend did not receive such an interest offer in his employment letter. Hence, I urge all of you that if anyone you know, or any of their friends or relatives, is joining such a company, they should inquire and clearly understand the purpose of these deposits.

Thanks & Regards,

yashswa.

To All HR Professionals,

This is a story of the worst HR practices practiced by one of the companies. I don't think it's proper to disclose the name, but still, I want to share this, as one of my friends was working and had left the organization within 5 months.

My friend joined the company in January 2007 at the Officer level. While joining the company, he made only one mistake: he signed and accepted the offer letter without inquiring much about the practices prevailing in the company.

The offer letter consisted of one condition of keeping an Employment Deposit of Rs. 10,000/- with the company for 2 years, and it would be repaid to him upon his continuous service with the company for 2 years. Although he was aware of this condition, he was not aware that employees were mentally harassed and compelled to leave the service of the company within 2 years. Soon, he realized this while working with the company as after his appointment, two employees absconded on the spot without any warning or anything. Of course, the employees who absconded were paid their employment deposit, but that was also after one to three months. Within that period, employees may get frustrated, especially those who are freshers. The employees who are tough enough or not found guilty anywhere are mentally harassed by withdrawing the minimum property to deliver the services like systems, software applications from the system, or not providing enough infrastructure, so that the employee will be induced to leave the company before 2 years. Also, the management's attitude shows that they don't need the manpower at all and they have favored the society by providing employment. This is not just the opinion of my friend but the conclusion made after discussing with his co-workers who are facing the same experience.

Now, with the same problem, my friend has left the job with a proper delivery of resignation mentioning the reasons for his leaving the company. First of all, all infrastructure was withdrawn from his system, saying that these software are not allowed to use. The software was installed by the company only. Then the entire system was withdrawn from him and shifted to another person to use. Telephone use was already restricted, saying the company can control unnecessary phone calls to customers, candidates, and outsiders. Only one number was in use for local calls for five departments, and two numbers were for STD calls.

Now, my friend has left and wants his Employment Deposit, but the company is refusing, saying his accusation is wrong, and he should not have left the company before 2 years. Also, the company not only takes such deposits from Executives, Officers, and white-collar employees but also from the Drivers, Swipers, etc. The only difference is the amount of deposit collected is less.

I am waiting for your opinion on this.

Thanks & Regards,
Yashswa.

What a nonsense practice. No doubt, the persons dealing on behalf of the company are HR Professionals. I would request such people from the profession to discourage such practices at their best because one day they will also face the same situation in life. Don't look only at your interest; keep in mind the whole society. Hope we shall take care at our levels.

Ramzan Sheikh

Dear Friend,

Don't ask your friend to go to a lawyer and forget about going to any court, as we all know our Indian law. Even today, after 60 years of independence, this happens. So, the main points where your friend can bank upon are:

- The newspaper
- The news channel
- Editorial columns of magazines
- Some social organizations working for free of charge
- A petition in a group/a complaint/request to the Registrar of Companies, Labour Commissioner, or concerned authority so that they should take action without taking any fees from your friend, i.e. in public interest.

If nothing works, then there is only one way,

yen vayi taani vayi

Give the company back in their own way.

Hi Yashswa,

I believe your friend must also approach the labor commissioner with the same issue. Such kind of harassment shouldn't be tolerated by the employees. The awakening should happen in India, and litigation against the employer in such cases would help thousands of other employees who couldn't voice their opinions. Let's show that India is no longer behind. We still can fight for justice.

Regards,
Sam.

Dear Friends,

It is true, some fake companies engage in such activities that are entertaining (especially the individuals providing advice to management should be punishable). I have seen some companies obtaining signatures on plain paper before offering employment. But where will it end? Who will control it? The Labour Department or the Factories Department?

:cry:

PBS KUMAR

Please check with your friend if he signed any legal bond. If yes, he may not ask for his money back due to a breach of the bond.

Regards,

Hemant Jajoria
Manager - HR

Dear Mr. Hemant,

As per your suggestion, I checked it out but no bond has been there between the company and my friend. However, in the offer letter, it was clearly mentioned that this money will be refunded to him after 2 years of continuous service with the company. Also, it was not offering any interest on the money collected at that time. Now, the company has started offering a good amount of interest rate while keeping the previous condition the same. So, in such a situation, can he get the money on the grounds of exploitation for not offering an interest rate to him at that time, which the company has started offering now to the new employees? It is evident that the company is taking such money to control the attrition rate, which is at a substantial rate.

My friend has gathered some data on the employees who have joined and left the company in the last six months. He found that the attrition rate is so high that the company is not able to control manpower after taking such deposit money. My personal opinion is that the company doesn't want to recruit and retain manpower, but its intentions are not good.

Please suggest as we are very junior and at the very initial stages of our career.

Thank you,

Yours sincerely,

Yashswa.

Hi,

Cases like this only make me more unhappy with the human race in general and business in particular. The extent to which businesses try to save costs in today's so-called enlightened times, when costs are reduced, quality goes flying out of the window in most cases. This organization shows a total misunderstanding of the term of Goodwill and publicity. I agree with Swastik - let us know the organization's name so that the future candidates are careful when negotiating there. Today, there are companies which are known on the basis of their culture - based on which some candidates will never join there, no matter the package.

Publicity is the best way to attack such organizations, mainly because they have given a letter on their letterhead. You can definitely go to a labor court for redressal. Please engage a lawyer for this.

Regards,

Ryan

Yashswa,

Ask your friend to get rid of this and move on. Just publish the company name here only when you think it's the right way to expose; otherwise, let your friend file a complaint against his/her previous employer.

Have a wonderful evening.

Hemant Jajoria

To all my HR friends,

First of all, I thank all who have participated with their inputs. Here, as a responsible citizen, I understand my duty to make you all aware of practices currently prevailing in the industry, whether good, bad, or worst as mentioned here.

Therefore, following are some conclusions:

While joining the company:

1. Read all documents carefully. Request the company and take some time to read the important documents like:
- Offer letter
- Appointment letter
- Employment agreement / bond
- Any other document directly or indirectly related to the employment relationship.

2. Raise queries. Ask the person about the clauses mentioned in these letters. Ask until you are satisfied with the answer.

3. You can ask for the company profile to read when you are waiting at the reception at the time of the interview. You should visit the company's site. However, many times the site may not provide the information you want.

4. If possible, take suggestions from someone who is aware of the industry and company.

5. You can also seek advice from labor consultants regarding this, if possible.

6. After joining the company, if the person leaving the company in the place where you have been recruited is there for the purpose of charge handover and other exit formalities, please coordinate and communicate about his future assignment, reason for leaving the current company, etc.

7. Most importantly, although all the above is necessary, we should also consider the company's perspective. Many companies today are facing a number of problems like attrition, an unstable labor market, etc., due to which the company has to frame policies suitable for their environment. Therefore, when a person joins the company, they should understand the INTENTION of the practices followed.

I know many things in practice are very difficult. But what's the other way? We can only strive for improvement. At least we are aware to apply it wherever possible.

Thanking you,

Regards,

Yashswa.