Is It Fair for Employers to Add Surprise Conditions in Relieving Letters? Seeking Advice on Legal Notice Issue

Hi, I joined a company as a software engineer that did not give any importance to my talent and hard work. Actually, I was underpaid as well (quite less compared to even my juniors). I was working hard to prove my worth and made a good reputation with clients and other colleagues, but somehow my own company was ignoring my worth. I got disappointed and started looking for a different company, applying through various job portals. The client came to know about my resignation plans and offered me a job with them. I checked the appointment letter, and there was no clause stating that I cannot join the client's company. Also, I asked my client to verify from their side, and they confirmed there was no such clause. I accepted the offer, which was a good one.

I was serving the notice period when my existing company found out about my plans. On my last day, my existing company asked me to sign a relieving letter stating that I cannot join the client's company. They did this with bad intentions. I was not able to decide what to do as I had a family dependent on me. I eventually joined the client's company. However, my previous company discovered this and sent me a legal notice demanding 2 crores in compensation.

Is it justified to spring surprises through the relieving letter?

We are bound by the terms of the appointment letter/offer letter, not by the relieving letter. Employers can include whatever they want in the relieving letter to fulfill their malicious intentions.

The ironic part is that I was earning 5 lacs per annum when I was employed there, and they are now asking for 2 crores in compensation. All terms and conditions should be clearly outlined in the appointment/offer letter so that employees are well-informed and can make decisions with proper knowledge. Can anyone help me? I don't want to lose my current job as I have a good reputation here, and they recognize my worth.

Dear aggrieved member, this type of post comes up in this forum time and again. However, the Delhi High Court has given a ruling. You may click here to refer to the thread titled Delhi High Court Rules Against A Non-Compete Clause In The Employment Agreement.

Thanks,

Dinesh Divekar

Applicability of Offer Letter vs. Relieving Letter Terms

In connection to this thread, I am very grateful to Mr. Dinesh Divekar for his response. However, I have a slightly different query. Can a relieving letter be binding to an employee if non-solicit and non-compete conditions were mentioned in the relieving letter? The appointment letter/offer letter does not contain them at all, and an employee reviews the appointment letter before accepting the next job or assignment. From an appointment letter point of view, the employee is free to go anywhere. The non-solicit and non-compete conditions in the relieving letter came as a surprise to the employee, but he has to sign it to proceed smoothly. Otherwise, the company can influence the client company (the next company for the employee) to revoke the job offer. So, it's basically a question of the applicability of the offer letter versus the relieving letter terms and conditions.

Considering the verdict of the Delhi High Court, the conditions of the relieving letter are binding on the employee. In fact, even if the non-compete clause had been included, it would have become null and void in light of the court ruling.

I recommend that you accept the relieving letter now. Later, approach the Labour Office of the area under whose jurisdiction your company falls. Explain your problem to the labor officer and request him to send a letter to your previous employer directing them to issue a fresh relieving letter without the non-compete clause.

For now, go to the labor office and file a complaint against your previous employer. Let us see to what extent they are helpful to you.

Thanks,
Dinesh Divekar