Dear Babudawn,
Let me address the issues you have raised in two separate parts viz.,
(i) Exit from the current organisation and receiving relieving letter and F&F dues and
(ii) Applicability of non compete agreement that has been signed by you.
First:
In terms of your letter of appointment, you are required to serve a one month notice period OR (presumably) pay a months’ salary in lieu of serving the notice period (this amount is usually the gross salary for the notice period not served). If you have served the notice period or are willing to pay the required amount, then your exit is a regular exit. The relieving letter, F&F and other dues cannot be withheld except in cases where assets of the company given to you, have not been returned back to the company.
Regarding writing a letter to your organisation for your relieving letter, I would suggest that you send a letter BEFORE 16th May i.e., the end of your notice period, stating that since your notice period, as stipulated in the employment letter, would end on 16th May, 2014, by when could you expect your relieving letter and F&F settlement to be completed. This should just be a letter making an enquiry and seeking clarification – nothing else. This letter can be referred to later on (after 16th May, 2014) when you send a reminder and undertake a follow up.
Second (a little lengthy response):
Non Compete clauses in employment contracts are fairly common these days. They are intended to restrict employees from joining competition and hence giving the competing organisation an unfair advantage because of confidential information or proprietary business know-how that may be carried by the employee and disclosed to the new employer.
This aspect is governed by Section 27 of the Contract Act which expressly states that "every agreement by which any one is restrained from exercising a lawful profession, trade or business of any kind is to that extent void".
For a non-compete clause to be held to be enforceable, two conditions must be satisfied viz.,
1. It should be proven that the employee concerned was in possession of sensitive, confidential or proprietary information, disclosure of which would be detrimental to the previous employer and
2. It should not infringe upon an individual’s fundamental right to earn a livelihood
Various courts in India have passed judgements along these lines, viz.,
A. In the case of Desiccant Rotors International Pvt Ltd v Bappaditya Sarkar & Ans (I. A. No. 5455/2008, I. A. No. 5454/2008 & I. A. No. 5453/2008 in CS(OS) No. 337/2008), the Delhi High Court ruled that in the clash between the attempt of employers to protect themselves from competition and the right of employees to seek employment wherever they choose, the right of livelihood of employees must prevail.
B. In the case of Percept D’Mark (India) Pvt. Ltd v. Zaheer Khan (AIR 2006 SC 3426), the Supreme Court of India summarised the principles of Section 27 of the Contract Act and observed that under Section 27 of the Act a restrictive covenant extending beyond the term of the contract is void and not enforceable.
The summary of this long explanation is that while the inclusion of a non-compete clause in your employment contract can be used to harass you, it is not legally enforceable in India.
Regards
Raju Bhatnagar