How to Handle a Resignation When Outstanding Payments and NOC Are Unresolved?

Dear sir, Our sales employee has sent a resignation email, but we didn't accept it because we instructed him to clear the outstanding amount of Rs. 4,00,000 and obtain an NOC from the dealers. However, he hasn't done so and continues to send resignation emails, along with threats to the organization to complete his employment procedure. We have managed to receive goods worth Rs. 3,00,000, but there is still Rs. 1,00,000 pending from his side.

Issue with Offer and Appointment Letters

We are facing an issue as we provided an offer letter with a probationary period of 1 year, but after the completion of 1 year, we did not issue an appointment letter with the necessary clauses.

For your information, the offer letter does not include any clauses. How should we proceed to address his employment issues and recover our outstanding amount?

Thank you.

Considering the info/data made available in your post, points to ponder/clarify are:

Confirmation of Probationary Period

1. No "Confirmation Letter" on completion of the probationary period of the said employee was issued/put through, either of i) satisfactory completion of the probationary period or ii) extension of the probationary period as per S Rules/S Orders. Our settled law is that the probationer shall be deemed as confirmed even when/if no letter is issued by the employer.

Disciplinary Action Steps

2. For not discharging his allotted duties, the employer should proceed with disciplinary action steps beginning with issuing, by Registered Post AD, show-cause/explanation letter/charge-sheet addressed to the employee's local postal address and permanent home postal address, seeking a written explanation against the acts of misconduct stated in the notice/letter/sheet. Order an inquiry in accordance with principles of natural justice, commence, conduct & conclude inquiry (may be ex-parte as the case may be) proceedings. Issue inquiry findings to the said employee and thereafter consider representation, if any submitted against the inquiry findings, and decide on appropriate disciplinary action/proportionate punishment, including recovery of any amount in possession of the said person.

Handling Resignation

3. Not accept the resignation tendered by the said employee till the disciplinary action steps get concluded.

Regards, Kritarth Team, Bengaluru, Help-Centre Office 9.3.2019

Dear friend, I am unable to think that it is the sole responsibility of a salesman to clear all the dues of credit sales effected by him on behalf of the establishment before approval of his resignation. He is not doing credit sales on his own; he would have certain norms to be strictly followed prescribed by the employer regarding credit facilities to the dealers. If any dealer defaults on any payment, there are lawful ways and means to recover the dues from him. How can you shift the entire liability to the salesman who acted in good faith in the normal discharge of his duties?

Unless the credit sales themselves are bogus or done by the salesman on his own in violation of the express instructions of the employer, where do the questions of criminal breach of trust and cheating come in? I think you are exaggerating the shortfall in the DCB of sales in the normal course of distribution of goods through dealers just to reject his resignation and to retain him at any cost.

Besides, a probationer remains a probationer until he is officially declared by his employer to have satisfactorily completed his period of probation. There is no deemed completion of probation nor any automatic confirmation unless there is such a specific deeming provision in the contract of employment.

My suggestion would be not to stretch things out of proportion when there is no such specific clause of clearing the collection of pending dues as a precondition for accepting the resignation of a salesman. The question of disciplinary action is out of context.

Sales and Company Procedures

Was the sales process completed by the employee according to company norms? Did the purchasing company acknowledge receiving the goods, and do your books of account reflect the transaction and payment of GST, etc.?

Purpose of NOC from Dealers

What is the purpose of obtaining an NOC from dealers? The company needs to review its procedures. If payments were overdue, what actions were taken by the company? A salesman cannot be held responsible for recovering money. At best, he can liaise with his customers, that is, company customers. Your procedures for confirmation, etc., need review.

Employee Resignation and Outstanding Dues

It would be best to directly interact with customers to recover the money. If this employee wants to leave, let him go. Only perform the necessary checks for dues, and ensure the return of company assets like laptops and mobiles.