How Do You Handle Employees Resigning Before Project Completion? Seeking Agreement Templates

Dear Friends, I am working in an IT company in Coimbatore. We are facing a situation where employees involved in projects resign before project completion, causing us significant losses and difficulties in finding replacements. As a result, management has decided to require new employees to sign an agreement stating that they can only be relieved or resign after the project completion.

Does anyone have a template for this agreement? Your assistance would be greatly appreciated.

Thanks & Regards, Geetha

Dear Geetha K,

The conditions of employment mentioned in the appointment letter are binding to the employee. Therefore, you do not have to enter any special agreement beyond the appointment letter. In the paragraph on "Conditions of Separation," you may insert the clause on "Continuation of Employment till the Completion of the Project."

However, please check with a legal expert on the validity of inserting this clause. Generally, in the appointment letter, a clause on the notice period is always mentioned. The purpose of the notice period is to give an employer breathing space to search for a replacement for the resigning employee. Now, what if the employee has worked for 4-5 years and has been assigned a fresh project? The project might complete after a year. Does it mean that the employee should deprive themselves of career advancement opportunities for the year? Therefore, adding a clause beyond the notice period, whether it is valid or not, remains to be seen.

This matter is related to labor but also falls under the purview of contracts. Therefore, while checking with the legal expert, please seek advice from a lawyer who handles cases under the "Indian Contract Act, 1872." Regular lawyers who handle labor law cases may not be sufficient.

Thanks,

Dinesh Divekar

Job Mobility and Employee Exit

Job mobility is the general rule. The exit of an employee after serving the notice period or buying out the notice period is the norm. Only if some special training is given involving company resources and funds can a bond be an acceptable process. However, your concern about the exit and its impact on projects is valid. The company needs to keep a standby for all such important and major projects. This will ensure that someone can always take over. Dependence on one employee and reaching a stage where their exit can embarrass the company would not be good for our company's growth.

HR Planning and Project Continuity

Therefore, HR planning for a suitable employee relevant to the project is mandatory. Keep receiving updates and presentations on ongoing projects from the technical side. HR can be a supportive partner by identifying replacements, etc. The exit of an employee cannot be stopped just because they are key to a project, which may be long-term in nature.

You cannot indefinitely bind an employee beyond the contractual notice period if they have resigned. No company can legally retain an employee if they have resigned and completed the notice period or offered to pay notice pay in lieu of serving the notice period.

Legal Implications of Employee Contracts

Section 27 of the Indian Contract Act prohibits any agreement that restricts business, livelihood, or profession. Hence, a contract to bind an employee itself becomes void.

The Apex Court, in various judgments, has opined that you cannot hold an employee in service. The employee is free to accept any lucrative offer. There is no illegality in joining a competitor company.