Can My Employer Demand a Month's Salary for a Relieving Letter After Contract Expiry?

Hi all, I am working as a physiotherapist in an outsourcing company. I had a contract for 1 year, which was further extended to 2 years. Now, I want to resign from the company without serving a notice period as I have been accepted by another private institution. The company is refusing to issue me my relieving letter.

Note:
My contract was supposed to end in March 2022, but there was no further extension provided to me. They are demanding one month's salary to be paid before issuing me a relieving letter. Please advise me on whether I am required to pay this amount if my contract has already expired.

If you were 'employed' for one year under a fixed-term contract and that was allowed to continue after that scheduled one year without any communication regarding renewal, the employer cannot compel you to pay notice pay or to remain in service for the required notice period. But if the employer is holding your relieving order, what can you do? The maximum you can do is to approach the Labour department and seek their assistance. If the employer defends by saying that you, being a physiotherapist who was assisted and reported by a junior physiotherapist and a few nurses, would not come under the definition of a workman and cannot file a complaint under the ID Act, what will you do? You will have to file a civil case, which is a lengthy process.

Therefore, you can do any of the two things. One, you can talk to your new employer and say that you require one month's time to join, failing which you will not get a service certificate. If the new employer has no objection, you can serve the notice period in the old system, complete the formalities of handing over, and join the new company after that. If, on the other hand, the new employer says that he does not require any relieving order but is comfortable with what you have declared in the CV, you can join immediately and forget the relieving order from the old employer. The old employer may send you letters demanding notice pay, etc., which you can just ignore. It is not going to make any difference since there is no communication that says that the contract of employment has been extended for any further period 'under the same terms and conditions'.

Thank you for the response. Can anyone help me with the contract? I need to know if I am required to serve the notice period since the last date of the contract is already over.

Again and again, I don't understand why people don't give the full details when they initially make a post.

Originally, I was inclined to believe that the agreement is notionally extended when you continued working. But the agreement very clearly states that if no extension is given, the contract is terminated.

However, since you continued to work and the company continued to pay you, it would mean (in the eyes of the law) that a new contract of employment is entered into (contracts need not be in writing, it can be oral or by action). Therefore, you are a normal employee and need to follow the norms. Thus, the standard notice period will apply.

Alternatively, some will say the new agreement would be in line with the previous one and in that case also, you need to give notice as specified. Incidentally, the contract says you need to give 15 days' salary, not 1 month's salary.

A third approach may be to consider that the new contract is not in line with normal employment but employment at will, and therefore, you can leave at any time without notice.

Which is the correct approach is a discussion between lawyers before a judge. The question is now: what can you do if you do not want to get into a long drawn legal battle whose outcome you are unsure of? You need to sit down with the management. Show them the contract that specifically says that if the contract is not explicitly extended, it is terminated and that you no longer need to follow its terms. The rest depends on your negotiation skills; we cannot comment or advise on it.

It may be in your interest to pay the 15 days' notice pay as specified in the contract and get your relieving letter. Remember that in the future, you may join a company that will ask for Background Verification, and in that case, they will come back to your current employer. You do not want them to give a bad review, do you?