Is My Job's Appointment Clause Legal? Seeking Advice on Potential Risks and Next Steps

Dear Friends, I've joined a private limited company recently. The interview and selection were conducted by the General Manager of the Company, and during the interview, no prior conditions or any kind of obligation clause were brought to my notice. I would like to mention that no charge was handed over to me as the earlier employee had left the organization without any notice. So, after my joining, I was only handling the day-to-day work.

After two weeks of my joining, the HR Head came to me and offered me an appointment letter and asked me to sign. I refused to sign and requested some time to read it before signing. He assured me that there is nothing but the normal clauses and that he would have to submit it to the Personnel Department for necessary record maintenance. A copy of this signed appointment letter was also given to me. Upon reading the appointment letter later, I was shocked to find threatening clauses that, in my view, are illegal. I lodged a protest with the GM the next day, who appointed me, and he assured me that these are only standard clauses and I do not have to worry. Since the conversation was verbal, I recorded it on my cell phone as proof.

According to this clause, if I leave the company without informing them or if the company terminates my services, the company has the right to claim two months' salary along with a liquidation amount of Rs. 50,000 from me. If I refuse, they can pursue this claim through the court of law. The appointment letter does not mention a notice period if I wish to leave the company.

Advice Needed on Employment Clause Issues

Dear Friends, I need your advice on the following issues:

1. Is this clause legal and binding upon me?
2. I am on a probation period of 6 months and have completed three months.
3. Can I resign from my current position, and what would be the notice period (what about a 7-day period)?
4. If I leave the company by giving a short notice or without notice, what actions can the company take against me? The company has not invested any money in me or my training as I am not from a technical field, and my job is essentially clerical.

I am very disturbed because of the above as I learned that the company has filed more than 30 cases against their former employees. Please advise me on what I should do in this scenario.

Thank you in advance for all of your guidance.

Best Regards,

Vinod Kumar

Legal Rights and Employment Clauses

What your employer has mentioned is not legal. An employee has every right to quit an organization after serving the notice period as mentioned in his/her offer letter or by paying the salary in lieu of the period or amount mentioned in the service agreement.

Similarly, when an employer terminates an employee, they must give a notice of 1 month / 2 months / 3 months to the employee. If not, they have to compensate the salary. This is the first time I am hearing of a clause whereby an employee is supposed to pay money, even if they are terminated.

Going by what you have mentioned, it amounts to slavery. If you have decided to resign, do the following:

1. Send an email to your HR and GM to correct the terms of the offer and issue a fresh appointment letter. In the email, mention that you discussed with the GM 2 months back, who promised to look into the issue. Also, mention the fact that since it has been more than 2 months since you heard from them, you are writing this email as a reminder. This email should be very polite and don't use words such as 'Illegal', 'Not fair', etc.

2. If they reply saying that it is a routine offer letter issued to all employees, then you respond saying that it is not acceptable. Don't ever mention that you have audio evidence. Produce it in court, if required.

I am not a lawyer nor do I have knowledge of labor laws. But what your employer has done is just short of bonded labor. Even IAS officers can resign from a job after serving the notice period. Does this company expect a person to work with them until 58 years?

Even if they go to court, it won't stand merit. An agreement should have remedial cause for both parties, in case of default by either of them. It cannot be one-sided. One-sided agreements are illegal. So don't worry.

Consult a lawyer once.

Regards,

Your case is a little peculiar. You mentioned that you have signed the appointment order, which serves as evidence of your acceptance of the clauses mentioned in the order. It is a token of your acceptance. Whatever your GM or HR says is merely formal and routine. Despite this, if disputes arise between the parties, it is noteworthy. This is the first time I am hearing that the termination clause is not mentioned by either party, whether during the probationary period or after confirmation of services. In the absence of this, it can be predicted that a notice period of one month is applicable by either party, which is within the purview of the law.

Since you want to quit the employment, submit your resignation on the grounds of personal reasons and request them to relieve you at the earliest. Since you are leaving within the probationary period, there should not be any problem for your employer. Please ensure that you obtain a relieving order before leaving the company; otherwise, it could be detrimental to your future career. Handle the situation carefully and communicate politely with your superiors.

Regards,
Adoni Suguresh
Sr. Executive (Personnel, Administration & Industrial Relations) - Retired
Labour Laws Consultant