Stuck in a Job Contract: Can I Get My Relieving Letter Without Paying a Penalty?

Hi, I have left my current organization and joined a new one. I completed the 90-day notice period mentioned in the appointment letter, but the commitment document states a 3-year term and a 5 lakh penalty. I have served 25 months. Unfortunately, they have not fulfilled their obligations as outlined in the commitment document. I have not been assigned a project for the past year, and they are withholding 1.5 months' salary. The employer has not provided a relieving letter, mentioned the end of employment date in the PF account, or cleared the Background Verification (BGV) for the new organization.

Am I eligible to receive a relieving letter? After discussing my situation for the future, I accepted the terms and conditions with a 3-year commitment on official letterhead and conveyed the intention to leave the company before the completion of 3 years. I have only been with them for 25 months. Are there any legal actions that can be taken? They are demanding 5 lakhs from me for this.

Illegal Employee Retention Practices

Compelling an employee to remain with one establishment is illegal. Not relieving an employee who has completed the formalities is another illegality. Demanding 5 lakhs to relieve an employee is just like demanding ransom! But how can you question it? What will happen to you if you deny it and reach any appropriate authorities like Labour Officers? You will again get negative feedback in the background verification. Therefore, only an amicable settlement is the solution for such situations. Try to find a solution by means of conciliation in the presence of somebody who is acceptable to the management.

Steps to Address the Issue

To start with, talk to the MD of the organization because sometimes, this may be the act of your project leader or your reporting officer, and the MD may not be aware of these things.