Can My Ex-Company Legally Hold My Relieving Letter Over a Client's Unpaid Bill?

Hi, I need urgent help with my case. I was working as an Assistant Manager Sales in a Freight Forwarding company and onboarded a client, which is a public limited company. We imported a few machines for the client, and our bill was about 22 lakhs. The client paid half, and about 10.5 lakhs are still outstanding. The client has approved all the bills and has not refused to pay but keeps giving further dates for payment and not honoring them.

In the meantime, I have switched jobs as I got a better opportunity. I thought the client would pay the money, and I would be relieved. However, the client has not paid, and my ex-company, although accepted my resignation and gave me a nice farewell, is not providing the full and final settlement and relieving letter. I need the relieving letter as it is required in the new company.

During the business dealings with the client, the contract was between my ex-company and the client, and I was just in sales. I never signed an agreement stating that my relieving would be on hold in case of outstanding payments.

What does labor law say?

Can they hold my relieving, or can I fight for it? There is no fault of mine, and I am being penalized just because I thought giving some business to the company was part of my job responsibility. Please help.

Dear Rahoul, no labor law would be of any help in the situation you described as your employment was not in the capacity of a workman under the ID Act, 1947. Your argument about your lack of role in the sale deed is reasonable and tenable too. In such a situation, the inaction of the company to issue formal relieving orders to you after accepting your resignation and physically relieving you of your services in the organization amounts to a breach of the implied exit term of the contract of employment. Against this, you can only institute a civil suit. However, it would be time-consuming as you have just switched your job to another company, and the need of the hour is a formal document of relief from your previous employer.

Therefore, a tactical approach to the issue is more preferable than confrontation. It's better to seek an audience with the CEO of the company and convince him about the need for formal relieving orders. Similarly, explain the entire episode to your present employer and, if possible, request a waiver of the submission of a formal relieving order from the previous employer in light of the other employment documents available. There is a possibility that a prudent employer can understand the fallacy of a wrong decision made by another employer.