Facing Legal Threats from an Employee Without an Appointment Letter: What Are Our Options?

Employee Termination and Legal Concerns

My brother owns a franchise of a fashion designing institute, which is just one year old. He hired a counselor for student admissions and other office work. The employee worked until 17th March 2020 and applied for 15 days of leave as her mother was ill. There was a lockdown in Maharashtra starting 24th March 2020. After 15 days of leave, we messaged her asking if she could come on 15th April to join, as she was the only employee working. She denied, stating that transportation was closed and she couldn't come. We agreed. However, during this time, without informing the director, she was taking online classes, even though she was never asked to work from home. When my brother found out, he asked her why she did not inform him about the online classes. She replied unprofessionally. After discussions with the head of the franchise and my brother as the owner, we decided to terminate her due to unprofessional behavior and absenteeism in May 2020.

We are willing to pay her salary for March 2020 for the number of days she worked, which amounts to approximately 20,000 INR. However, she is now demanding 65,000 INR, which includes her March, April, and May salaries, leaves, and incentives. We disagree with her calculation and are willing to pay her actual salary. Now, she and her father are threatening us by saying they will go to court, which they claim will be dangerous for us.

Key Points

1. We never issued her an appointment letter as we are still in the process of putting policies in place.
2. She had submitted a written leave application, which she now claims she was forced to take.
3. We are prepared to pay her actual salary for the days she worked in March.
4. During a discussion, she took photos from an inquiry file without the director's permission, which contained confidential admission data.

Legal Concerns and Advice Needed

In this case, can she file a legal case against us in the labor court? If yes, on what grounds? How should we proceed for a smooth closure? Please provide your best advice. Thank you for your valuable time.

In this scenario, the absence of an appointment letter does not prevent an employee from filing a case against the employer. However, the lack of a formal appointment letter may impact the specific terms and conditions of employment that can be legally enforced. Here are some key points to consider and steps to take:

1. Legal Perspective:
- In India, labor laws protect the rights of employees, even in the absence of a formal appointment letter. The Industrial Disputes Act, 1947, and the Shops and Establishments Act of the respective state (in this case, Maharashtra) govern employment-related disputes.
- The employee may potentially file a case for unfair termination, non-payment of dues, or breach of contract, among other possible claims.

2. Recommended Steps:
- Documentation: Gather all relevant documents, such as the leave application, records of her work and attendance, and any communication related to her termination.
- Legal Consultation: Seek advice from a labor law expert or legal counsel to understand the potential legal implications and the best course of action.
- Negotiation: Attempt to resolve the issue amicably through negotiation or mediation. Clearly communicate your willingness to pay her actual salary for the days worked in March.
- Settlement Agreement: If possible, reach a settlement with the employee that outlines the terms of separation and any financial compensation to be provided.
- Data Security: Address the issue of data breach regarding the confidential admission data and take necessary steps to prevent any further misuse.

3. Smooth Closure:
- Clear Communication: Maintain open and transparent communication with the employee and her father to avoid misunderstandings and potential escalations.
- Compliance: Ensure compliance with all relevant labor laws and regulations to mitigate legal risks.
- Professionalism: Handle the situation with professionalism and empathy, considering the employee's perspective while safeguarding the interests of the business.

4. Final Note:
- While the absence of an appointment letter may complicate the legal aspects, it is essential to handle the situation sensitively and in accordance with the applicable laws to achieve a smooth closure and minimize potential legal repercussions.