Is It Fair for My Employer to Withhold Relieving Documents Due to a Service Agreement?

Hello, I have an employee service agreement signed with my current employer which has two clauses:

1. If I leave the organization within a period of two years from my joining, I will be liable to pay the company any additional costs they have incurred on me, such as trainings, visa processing, etc.
2. If I breach the agreement before the completion of two years, the company will not provide me with relieving/experience documents.

I have completed one year with this organization and recently received a better job offer which I would like to pursue. Now the company is refusing to provide me with my relieving documents based on the signed agreement. I would like to highlight that:

- I have not been provided with any trainings, etc., so no additional cost has been incurred on me.
- I have been on the bench for the last four months with no projects and no career growth. Hence, I am justified in looking for a better job offering me growth and work.
- When the present company made me the offer, there was no mention of a two-year service agreement. However, on my date of joining, they made me sign the service agreement without me realizing what I was signing was a kind of "bond" of two years.
- My notice period is three months, and I am also ready to serve out the entire notice period.

Please let me know if taking legal action against the company to provide my relieving and experience documents would be justified.

Thank you.

Thank you for your response. So, if I understand you correctly, you are saying that a company is justified in having an employee sign a bond or an agreement which has no consideration. Usually, any agreement is considered valid if it has consideration, i.e., a company will do so and so for an employee in return for which the employee should serve a minimum of two years in the company. However, in my case, the agreement has no consideration; it simply forces an employee to sign a service agreement for two years. Please confirm.

Thank you, Nathrao.

Although my relieving letter is mandatory for me to join my next organization, I am only left with the option to take legal action. I have worked with the current company for over one year, and the documents cannot be denied.

Thank you.

Dear Puspinder,

You can be advised on the correct way to take legal action after reviewing your employment contract and other employment documents. In your above mail, some violations of employment laws are visible, which may be grounds for taking legal action against your employer.

Thanks & Regards,

Sanjeev Kumar Baliyan
Advocate & Consultant
Email: sanjeev.baliyan@clairvoyants.co.in
Mobile: 9971589511

The Company has strategically documented evidence against you in case you leave without notice. It's not unusual for companies to prepare cases against individuals, even if there is no substantial evidence, as a strategic measure. It is common for employees to avoid wasting time and money by engaging in litigation as a weaker party. Instead of becoming the first party in a legal battle, you can present your case in writing. In situations like yours, the first party often loses legal battles. In your written communication, state the facts and request assignments. Emphasize that without suitable assignments, you are losing valuable knowledge and skills that were essential when you were hired. If you choose to seek employment elsewhere while still employed here, legal action may be necessary, incurring costs and leading to prolonged periods of uncertainty and stress.

Before Sending a Detailed Account

Before sending a detailed account of your problems in writing, please attempt to discuss potential solutions verbally with your superiors in a logical and polite manner, showing empathy towards their perspective.

Regards,
RDS Yadav
Labour Law Adviser
Director - Future Institute of Engineering & Management Technology

Thank you, sir. However, in my case, I am not leaving without notice. As per my agreement, the notice period is three months, and I have already informed the company that I am willing to serve the entire three months. What I am requesting in return are my relieving documents.

Additionally, the agreement I have signed is entirely one-sided with no consideration. Based on my knowledge, such agreements are not enforceable by law. According to the Indian Contract Act, contracts entered into between two parties, if one-sided, would be considered null and void.

Furthermore, the Supreme Court of India has clearly stated that no employee can be forced to work against their will simply because they have signed a contract with the employer. Any actions taken by the company, such as retaining original educational certificates or creating obstacles for the concerned employee to seek other employment, will have negative repercussions for the company.

I have attempted to engage in polite dialogues with the management, but the only remaining option now is to pursue legal action against the employer. Please advise.

"As per the Indian Contract Act, contracts entered into between two parties, if one-sided, would be null and void."

This statement has different interpretations and may not be entirely correct. If you knowingly entered into a contract and there is no patent illegality evident on the face of the contract, one would need to examine your specific case before commenting or giving advice.

I advise you to consult a local lawyer for accurate guidance.

Understanding Your Position with a Service Agreement

If your new company does not accept you without a relieving letter, then you are out of luck. Even after you have explained the matter, if they still insist on it, then you cannot take up the opportunity.

Considering Legal Action

Taking legal action against your employer is really unwise. The court will hear your case 5 years from now, and you will be without a job till then.

Analyzing Your Arguments

All the arguments you have given are questionable. You signed an agreement knowing what it said. Consideration is there—you were given a job. They are not asking for repayment of training costs (I assume no formal training was conducted). But they cannot be compelled to relieve you. At best, you get an experience certificate if your state shop act provides for it. If not, even that is not a compulsion.

Potential Consequences of Complaining

Even if you go to the labor officer and complain, and he gets you a relieving document during a background check, they will say you broke the bond and tried to cause legal trouble, and you will be out on the street again.

Proceeding with Caution

You are basically in a bad position. So you need to tread carefully.

I am surprised by your statement, "on my date of joining they made me sign the service agreement without me realizing what I was signing was a kind of a bond of two years." Frankly, you are not a kid born yesterday. You always had the option of not signing it. But still, you signed it. Did someone put a gun to your head to sign it?

Your posting is a bit contradictory regarding the training and Visa. Has the company given you any training or not? [Don't get into the loop of saying it was not anything worthwhile, etc.] And did they apply for any Visa for you? Please note that Visa application costs the company, and the cost also depends on the Visa category.

You have not mentioned your experience level, but since you say that you have been on the bench, I presume that you are not a fresher for sure. And when you knew all along that there's a bond, on what basis did you apply for other/new jobs in the first place?

All the points you mention seem like afterthoughts now that you got another job. And like Saswata Banerjee mentioned, going legal is not that simple or easy. Though there may be definite grounds for going legal, the practicalities will surely have to be kept in mind. I am sure you know this aspect of the Indian Judicial system.

Regards,
TS

I understand, Nathrao. Thank you. I also know that the legal process is lengthy and probably not worth taking the risk. So now I am trying to proceed with the following two options that I have:

1. I have initiated talks with senior management in order to settle this situation amicably. I am trying to make them understand the reasoning behind my decision.

2. I am also in touch with my new company, trying to find a way if I could produce some other documents (like resignation acceptance/offer letter/Full and Final statement (no due statement), etc.) in place of a formal relieving document.

I am hoping that option 1 materializes; otherwise, I will be forced to continue with my current job.

Regards.

Let me address your remarks about my communication and manners... I know them better. Like Nathrao mentioned, it's always wise to bear in mind the old saying "sach kadva hota hai," especially when what's being said seems to go against one's views and beliefs.

Response to Your Query

Coming to your query, "please tell me who in this country would risk their job by arguing with their company on day 1," the answer in a single word is: MANY. And I may add, this has nothing to do with the 'country' - you can find such traits everywhere since it's to do with human nature rather than geography or culture.

Quite often, nature or providence or God or ABC or XYZ, or whatever label you wish to put on it, gives alert signals that many often just don't bother to see or give weightage to during the phase. Had you had some sort of idea a year ago that there's a possibility that this situation can come up, maybe you wouldn't have signed that bond at all or taken another decision?

Handling Situations

Also, please bear in mind the best way to handle any situation - work towards the best-case scenario solution but always be mentally prepared for the worst-case scenario. There won't be any surprises in life. Your line, "I will be forced to continue with my current job," belies a sense of non-seriousness that's likely to take out your peace of mind if you end up staying in the present company until the bond is completed.

Again here, you do have options - no one is 'forcing' you to do anything. Just like your company changed the rules of the game midway, you too tried to do it now... I really don't find any difference between the two. The company did what they thought was in their interest - to hell with the employee; and you have tried to do now what you think is in your interest - to hell with the company.

Just be cautious with anyone or anything where the rules change midway - likely chances of bigger headaches further down the path.

All the best.

Regards,
TS

I appreciate your patience in replying again to a post by a rude and obnoxious individual who thinks we are all his paid servants to cater to his whims and fancies.

Dear colleagues,

There has been a lot to understand in the posts contributed by very good, experienced people, and reading all the way to the end is cascading further learning.

Dear Mr. Pushpinder, what is happening in courts? The process involves affording parties a hearing, examination of evidence, arguments, etc. If we facilitate and make someone hear our case, ask them to go through our evidence and justifications, and finally, we argue our case, they will have to do similar things before you. What I want to say here is that we should always endeavor to make our full efforts to get the other party to listen and do justice, and in return, we should do the same in our routine. If this is practiced, problems can be resolved quickly, and we can move on to the next destination. In our routine matters, we lead a peaceful life by being amenable, polite, and justice-loving human beings. Society also behaves in the same manner as we do. "For arguing our matter - Use soft words for hard arguments," said Mahatma Gandhi. Sometimes, we observe that a small relief, if accepted in the past but not accepted, has cost huge and manifold consequences in the present context.

I repeat for you again, build up your case. You signed a bond. Whether it's the first day, last day, morning, or evening, time is irrelevant in a legal sense. It's not a one-sided bond. You can also argue, present orderly things with justifications, and enjoy win-win situations as an outcome of mutual dialogues.

Best wishes,

RDS Yadav