Is It Legal for a Company to Demand Damages for Not Serving Notice Without a Bond?

Hi,

One of my close friends was working with a BPO six months ago for two months and had to quit because of medical reasons. Her supervisor called her to inquire why she was not reporting, and she explained that she was suffering from jaundice and could not come to work anymore. She mentioned that she could send her resignation via email as she was not in a position to attend work. However, her supervisor stated that he could not accept an email resignation, and informed her that he would mark her as absconding, asking her to relax.

After six months, she received a legal notice from the company yesterday, demanding Rs. 6000 for not serving her notice period and Rs. 1,00,000 as damages incurred due to her attrition. She did not sign any kind of bond during her induction, and there is no clause in her appointment letter.

According to labor law, could you please advise me if the company is correct in sending the legal notice?

Kindly provide me with proper guidance on this issue.

Karthik

Dear Karthik,

An employer can insist on notice pay provided the same was mentioned in the Standing Orders of the Company. If no standing orders are framed and if the company is not required to have standing orders under the Industrial Employment Standing Orders Act, then the matter of notice pay should be given in the appointment letter issued to the employee. If the notice period or payment in lieu is stipulated, then an employee is supposed to pay notice pay or give notice in advance while leaving the organization.

However, an employer is not supposed to ask for damages for not reporting if that employer had not incurred any financial loss due to his/her not reporting. In your case, your friend had worked only for 2 months, which is insufficient to make a loss to the tune of Rs 100,000! Damages matter when the employer had incurred heavy expenditure to TRAIN an employee to make him/her FIT to WORK in his establishment. And two months seem to be a very short period for such kind of training.

Normally, a soft copy of the resignation letter will not be accepted. He/she should have sent a signed (hard) copy of the resignation stating valid reasons.

I suggest that the letter sent by the company calling to pay damages will not stand without justification of actual damages caused to the company.

If the appointment letter is silent in respect of the notice period, then you can neglect the letter received now.

Moreover, the purpose of the notice period is to find an alternative staff to place in the place of those leaving. If one employee is not reporting (rather absconding), the employer should feel her absence from day one of her absence itself and NOT AFTER SIX MONTHS.

I do not know if there is any law permitting an employer to summon for not reporting. Therefore, you can reply saying that you had resigned on medical grounds and you do not presume that any loss had incurred due to your resignation. I do not think that the employer will move the case to court, and if they do, you can face it as these are very common.

All the best.

Madhu.T.K

Hi Anil,

It's very nice to see your way of explanation. I am also trapped in a similar condition. I have resigned from my previous company, and the resignation has been confirmed via email (with dates specified). The employer had also given a date for my relieving. However, during my notice period, my father had a serious accident. So, I had to rush back home in a hurry. The process took some time, but I tried to inform the employer by email after a week. Unfortunately, I missed giving all the details in that initial communication. The following week, I sent him a complete description of my problem along with medical documents attached.

During this period, the employer sent me notices for my absence from work via courier. Three such notices were sent while I was tending to my father's well-being. When I became more stable, I sent the company materials back to the employer via courier. However, the materials came back marked as 'unclaimed'. Subsequently, I received a legal notice from the employer regarding my absence from work and a claim for three months of gross salary within 15 days. I need your advice as soon as possible.

Thanks in advance.

Rajeev

Dear,

Please go through the terms and conditions of the appointment letter. If she is a confirmed employee and the appointment letter mentions the notice period, and if she resigns on her own, then she is liable to pay the notice period. From the information provided, it is observed that she has not resigned, and the company has sent a legal notice. Please confirm whether the company has terminated her service through that legal notice. If so, then no notice period is required to be given. Even in the case of termination, the company cannot terminate her without holding a domestic enquiry. In the case of unauthorized absence, a domestic enquiry is a must before termination, even if she had worked for 10 days.

Regards,
Ak Malhotra

Hi Madhu, Quite a Similar Case, was working for a very reputed Media Company. While joining we had one month notice period (can be settled against earned leaves if any). After a year, a new policy was enforced which says... - No Earned Leaves Will be Settled even if one day short notice is given. Even the salary which to be paid would be full salary and not the basic (All companies I have worked previously asked for basic salary in lieu of notice period) After two months of my resignation, the HR Head is threatening Legal Actions and Talking to my Current Employer if I don't pay the full salary amount. (Though I have received an accepted copy of resignation from my Boss) I look forward to your suggestion. Please help. regards, Deepak

1) An employer has no right to say that they cannot accept a resignation letter by email.

2) An employer has the right to claim "pay in lieu of notice period" and "damages" provided the same is mentioned in the service agreement.

3) The amount claimed should not exceed whatever is mentioned in the service agreement.

4) You can ask for an explanation for the delayed claim if you are residing at the address provided with your last employer and the notice was served at the same address.

5) If you were unable to attend the office due to a medical reason, you should have sent the doctor's advice/report. The consequence of your failure is what you are facing now.

Hello,

I have the same issue. I am working in a company as a PHP developer. However, after one month, the boss asked me to resign as he is not satisfied with my work. I submitted my resignation, and he requested me to return after 10 days for my salary. When I went for my salary after 10 days, he refused to pay me. Three days later, he sent a notice claiming that I had visited the company and damaged their furniture and software. He demanded Rs. 100,000 as compensation within 15 days. What should I do? Please reply soon.

Thanks,
Shiva