Facing Legal Threats Over Exit Formalities: How Can I Secure My Relieving Letter?

Seeking Legal Advice on Exit Formalities Dispute

I am looking for advice from the community on the legal remedies that may be available (as a last resort) in a disagreement with an employer regarding exit formalities. The employer was notified a month ago about my intent to quit the current job. The employer is a startup that is financially unstable and has poor business prospects. Several employees have already left the organization, but I, as one of the remaining key senior executives, am being threatened with legal action by the employer for not fulfilling the 3-month notice period or at least withholding the relieving letter.

This is happening even though I am willing to pay the organization the balance of remuneration for the shortfall of notice. However, the present contract doesn't explicitly mention such a provision. The employer is citing the absence of such a clause and is not letting go. The work environment is extremely stressful and hostile, and I have no wish to continue here.

My key concern is obtaining the relieving letter and ensuring that IT deductions are submitted properly so that next year's Form-16 can be generated.

Regards

Kindly note that the current agreement, signed between the MD/CEO and me, is done on Company Letterhead, and not on legal bond paper.

Another important piece of information to add here is that I am willing to give another 2-3 weeks to this company. However, if I were to serve the entire duration of the 3-month notice period, I would lose the other offer I currently have in hand. Given my age, experience level, and the prevailing market circumstances, it would be extremely difficult to secure such an offer again.

Understanding Your Appointment Letter

It is important to understand what is written in your appointment letter or agreement accepted by you. If it specifies a three-month notice period with no provision for paying off the shortfall in the notice period, you are obliged to serve the notice period. A relieving letter is issued only when an employee is formally relieved or separated from the company. If you stop attending the office, you can be treated as an unauthorized absentee or an "absconding" employee.

Company's Financial Health and Your Case

The company's financial health will have no bearing on your case if they are paying your salary in a reasonable time. If they are not paying your salary, then you have a case. You can demand to be relieved, as the company is not keeping its part of the promise.

Avoiding Legal Action

Avoid going to court if you can. If the word goes around, it may be detrimental to you. Employers do not like to engage people who go to court for such reasons.

Regards

Your post needs further clarification. The paragraph-wise replies are as below:

Employer had been given notice a month back about the intent to quit the current job.
Comments: "There is nothing like notice about intent." As an employee, you need to submit a letter of resignation. Did you do that?

Employer is citing absence of such clause and not letting go. The environment at work is extremely stressful, hostile, and I have no wish to continue here.
Comments: What exactly is the clause of separation in your appointment letter? What is the wording?

My key concern is about getting the relieving letter and ensuring that IT deductions are submitted properly (so that next year Form-16 can be generated).
Comments: If the employer has deducted TDS, and if the TDS is deposited too, then it will be reflected in AS-26. You need not worry about Form 16. You can file an IT return based on AS-26.

Kindly note that the current agreement, signed between the MD/CEO and myself, is done on Company Letterhead, and not on legal bond paper.
Comments: When employers issue communication to the employees on the company's letterhead, it is valid and legally accepted communication in a court of law. This is not an agreement as such. Agreements are done on bond paper.

Thanks,
Dinesh Divekar

Thank you for the answers and I appreciate your views.

Could you also please shed light on the legality of having a three-month notice period, while the company seems to reserve the right unfairly to terminate the services of an employee with only a month's notice? They can cook up a cock-and-bull story about disciplinary action and use the ruse to terminate quickly as they feel the need, and when it arises.

Equal Terms in Separation Agreements

While designing the terms of separation, both parties should have equal terms. One party cannot have a 30-day notice period while the other has a 90-day notice period.

Importance of a Domestic Enquiry Before Termination

Termination from employment is the most severe form of punishment. Therefore, it should be preceded by a domestic enquiry. During the enquiry, a fair chance must be given to the accused, ensuring that the process is not tainted in any way. If the principles of natural justice are strictly adhered to, dismissal from employment is not a simple matter.

Avoiding Legal Actions

As you hold a senior position, I recommend avoiding legal actions. If labor laws were that stringent, approximately a quarter of companies could face closure. The slow-paced judiciary tends to favor employers. "Bark is worse than bite" is an age-old adage. In the Indian judiciary system, the wait for a verdict is often more agonizing than the verdict itself. If you have not visited the labor court before, I suggest you visit to understand their archaic functioning.

Negotiating Notice Period with Employer

Therefore, you may negotiate with your employer for the notice period. Be persuasive in your approach. If your employer remains adamant, you may consider informing them that you will have to lodge a complaint with the Labor Officer (LO). Due to your seniority, the LO may not entertain your complaint, but your employer's company could come under scrutiny following your complaint.

Thanks,

Dinesh Divekar