Facing Legal Trouble After Leaving a Job: Can My Ex-Employer's Claims Hold Up in India?

I have received a lawyer's letter (on behalf of my ex-employer) after I have been relieved with a relieving letter. There are two allegations:

1) 'Another company has paid approximately Rs. 8000 to my salary account.' This is for the travel made on the interview date, and I have all the bills. The interview date was an approved leave. The ex-employer's allegation is that I have shared information for money. They came to know of this transaction either from the bank or by checking my private email account. Is it legal for anybody to scrutinize the transactions of my salary account?

2) 'I have joined a competitor company within 1 year of relieving.' I have not signed any bond for this. This clause is as per the appointment letter on the company letterhead.

Based on these two aspects, they have asked me to pay compensation of 6 months' gross salary. Are these allegations enforceable by Indian Law? What is the outcome of such proceedings?

Moreover, I have mentioned in my resignation letter that I will serve a 45-day notice period. But they relieved me in 1 day. So, can I claim for 45 days' payment of notice?

Additionally, they have also held up my normal payments like a few days' salary, earned leaves, customer's dinner bill, etc. Is there any hope to get this money?

Legal Implications of Joining a Competitor

Forget about the notice; no legal action can be initiated against you for joining a competitor because clauses in an agreement extended beyond the termination of employment are void. No employee can be prevented from taking up employment similar to the one they were doing with their previous employer.

In Case References

In Sandhya Organic Chemicals v. United Phosphorous, the Gujarat High Court held that an employee cannot be prevented from utilizing the knowledge and experience gained while being in employment. In Ambiance India Pvt Ltd vs. Naveen Jain, an agreement prohibiting an employee for two years from taking employment with a present, past, or prospective customer of the plaintiff was held to be void and contrary to section 27 of the Indian Contract Act.

Validity of Confidentiality Agreements

Though post-termination restraint agreements are void, confidentiality and non-disclosure agreements are valid and effective when exercised during the employee's service. However, if you have proof that the amount you received was just a reimbursement of travel expenses paid by the present company, the lawsuit will not be maintainable.

Notice Pay and Reimbursements

Regarding notice pay payable to you, you can demand the amount since you opted to serve the entire notice period, but it was the company that relieved you earlier. You can also demand reimbursements for bills, etc. However, after sending a legal notice, the actual HR culture of the company could be assessed, and they may not pay immediately but hold the amount until a settlement is made. It would be beneficial to involve another person, not necessarily an advocate, to speak to the company and convince them. A proper conciliation should be attempted first, and only if they remain adamant after the conciliation, then consider legal action.

Regards, Madhu.T.K

Legal Concerns and Next Steps

Mr. Madhu has mentioned very rightly. However, I feel that the letter is not sent by the HR Head; the company has consulted with an advocate, hence they may try to harass you. They have taken the effort to find out where the money has come into your account too.

I suggest that without quoting or responding to this letter, you can send a polite request letter to the company asking them to settle your Full and Final (F&F) settlement. In this letter, you can ask for your notice period (as mentioned in your appointment letter), your remaining salary, other dues, etc. By doing this, they will understand that you also have some demands. Being an HR person, initially avoid quarrels with management and try to settle amicably. Though the management cannot stop your move or decision, after some time, you may receive a second legal notice. It is better to consult an advocate and respond to that, quoting all the points, including how they collected your details.

Regards,
Ramadas

Thank you, Mr. Madhu and Mr. Ramdas. I have sent a lawyer's letter asking for my money and requesting them to disclose how they accessed my account. Thank you so much for your suggestions.

Very well advised by Mr. Madhu. Certainly, you do not need to worry about points #1 and #2. However, it is absolutely necessary to give a reply (either by yourself or a lawyer) to the legal notice at the earliest.

Dear Learned members,

With regard to the above discussion, shouldn't the advocate be taken to task? My bank account and transactions therein are privileged information, and anyone being able to access my account with or without the bank's connivance is a huge security risk that needs to be addressed immediately.

Dear Mr. Madhu,

Congratulations on explaining the situation very well. However, what would be the situation if an employee leaves the company without completing the required mandatory notice period and without formally handing over charge? Does the company have an inherent right to insist that the employee must serve the entire notice period and not settle for monetary compensation for the balance days?