Hiring Without a Relieving Letter: What Risks Are We Taking?

Consequences of Hiring Without a Relieving Letter

What are the consequences if we hire a person who did not receive the relieving letter from their previous employer? We are unaware if the individual is on leave from their previous employer during the period they are working with us.

What are the consequences if we hire a person who did not receive the relieving letter from the previous employer?

Possibilities:

1. He might have misappropriated the previous company's assets or property.
2. He might have committed a criminal offense with the previous employer.
3. He might have outstanding loans or debts from the previous employer.
4. He might have absconded from his duties or services.
5. He might have taken leave to explore and evaluate your company, and he may prefer to return to his previous company if he does not like your company's culture, job profile, etc.

While appreciating the input from Prashant, which provides the standard HR reply/reasons, the time has come for us to think beyond what we have learned or what we have been doing so far. Despite accepting the "Hire and Fire" concept in employment, which favors employers, we are still bound by the British legacy of government services and documents such as Relieving Letters, which have no bearing on the "Hire and Fire" philosophy.

There is no law that mandates accepting a Relieving Letter from the previous company before hiring a person. If such a law exists, I would appreciate enlightenment on this aspect.

Addressing the question of what happens if the person has committed fraud, theft, etc., with the previous company, it is essential to recognize that our country has a robust and fair Legal System and Law Enforcement System designed to handle such matters. An employer is neither a judge nor a policeman, and the law does not hold them accountable as an accomplice if an ex-employee has committed wrongdoing.

It is crucial for us, as HR professionals, to act more professionally and reduce the replacement time, rather than conforming to the status quo.

For those who may be hesitant, as a precautionary measure, one can request a declaration from the employee regarding their resignation, potentially in the form of an affidavit or even an Indemnity Bond on non-judicial stamp paper of appropriate value.

Note: The opinions expressed above are applicable to companies in the private sector only.

Warm regards.

I would like to add to the above discussion that, as has been mentioned numerous times on the forum before, sometimes management unjustly treats employees (whether the accusations are true or false, even without proof). In such circumstances, should we dismiss a person who could potentially be a key player in the new venture?

Therefore, it is suggested that the background of the new employee be thoroughly verified. As previously mentioned, an affidavit could be obtained with a clause stating that if at any point during their tenure with the company, any statement is found to be false, the management will have the authority to terminate their services without notice or inquiry.

Thanks,
V K Gupta

I would like to add my view. In many cases, I have seen that employers harass departing employees by not paying their Full and Final (F&F) dues, not issuing service letters, and not providing relieving or clearance letters. When hiring a permanent employee, it is important to have them declare that they do not hold employment in any other organization. Nowadays, employers conduct background verifications of new employees, which helps identify any issues for the employer to take appropriate action.

We need to change our perspective and move away from the traditional belief that the employer is always right.

Further to what Raj Kumar mentioned about the options available to you as HR, please also confirm with the prospective employee the reason(s) for not being able to submit the documents. Usually, such aspects can be assessed during face-to-face interviews by observing the body language to determine whether the individual is being genuine or providing false reasons.

Additionally, there are methods to investigate if a specific company pressures its employees for the full and final documents. It would be advisable to cross-check and make a decision based on Raj Kumar's suggestion. A sworn affidavit is now an accepted method for handling such situations, as it is observed across various industries.

Regards,
TS

I understand your problem and empathize with your predicament. The reasons cited, viz. "Now please tell me that if I am not having any experience certificate/relieving letter from this company, does that mean that I have:

- Done any misappropriation of the previous company's asset/property.
- Committed a criminal offense with the previous employer.
- Taken any loan/debt from the previous employer.
- Absconded from duties/services.
- Taken leave to join and check a new company."

These are exactly what is cited by any HR for producing a relieving letter. Although every practicing HR worth their salt knows that these reasons are only in theory and rarely seen in practice. After being in contact with thousands of candidates, I have come across only a few who belonged to the last category, but then checking a new company out before committing oneself is not a serious crime.

This, quite often, is built into the procedures, which again are legacy systems. Being aware of how companies are working these days when the matter regarding an employee trying to leave the company comes up; which again are formulated by HRs of companies who are too subservient either due to fear or greed, or lack of expertise or keeping up with the times. The idea is to make an example of the employee quitting, so as to pose an effective shield against attrition.

Such practices are despicable, not only because they are against the spirit of progressive HRM but also make HR appear ridiculous and redundant, as these portray HR as dogmatic, static, and rooted in systems and procedures which are counter-productive. HR should always be pragmatic and dynamic and keep its practices abreast with the times.

As we have already discussed earlier, why a relieving letter is an unnecessary document that only brings inefficiency and delays. Why should the placement or induction of a new employee depend on the inefficiency and bad attitude of the previous organization?

There are several perfectly acceptable alternatives to a relieving letter which a good contemporary company should be perfectly willing to accept. A prospective employee should not be penalized, nor a company be put on hold, just because the ex-employers are inefficient, vengeful, or lack concern for their employees.

Hope that, although this does not provide any specific solution for your problem, it will still comfort you.

Warm regards.

Dear all,

Since my entire service was with the state government, which was my own choice, though I belong to the erstwhile new breed of management graduates of the 1970s, I was quite unfortunate in being deprived of the chances of changing employments at will as well as analyzing the profiles of such fleeting birds. However, the first glimpse of the various answers posted to the query by Veereshmathad gives me a spontaneous urge to participate despite my lack of professional experience in this regard. My only counter-question is to the questioner himself: Why do you prefer such an experienced person for the job? Other things remaining the same, if experience is the deciding criterion, I am not able to understand why there is such a botheration about formal relieving orders from the previous employer when it is known that during his authorized leave period, the individual accepted your offer of employment and joined your services.

In this regard, I would say that Prashanth has generalized the issue and pointed out the reasons quite academically. Rajkumar, as a seasoned HR man, has indeed made some soul-search and come out with certain preemptive suggestions. M/s. Gupta, Abedeen, and Tajsateesh have either elaborated or complemented his views. However, the tell-tale episode of 'anonymous' adds piquancy to the discussion. Her resignation is, of course, due to some personal reasons. But it can be easily inferred that her lamentation is not just for the terminal monetary things but something more like future employment based on her previous experience, which is neither unrealistic nor unjustified. It is discernible that after the advent of globalization, there is a remarkable shift in employee loyalty—loyalty to the organization has shifted to loyalty to the profession. So, things like head-hunting and increased rates of attrition based on job dissatisfaction would be on the increase.

Regards.

Hiring a candidate without a relieving letter can be both safe and risky for your organization. There are a few cases in which an employee is unable to submit relieving letters:

1. FnF process from the previous employer is not completed.
2. A candidate is trying to deceive.

In any case, if you are not sure of the credibility of the candidate you are hiring, you can contact their previous HRs or check other documents for background verification.

You can also implement HROne into your system, a complete HCM suite to resolve all your problems related to relieving letters. Whether you need a checklist for documents that need to be verified (in case a relieving letter is not provided) before the time of joining a new candidate, or you need to generate a relieving letter for an employee who is leaving.