How to Handle Unfair Resignation Practices and Bad Performance Letters in Small Companies?

Hi all,

I am writing for my friend who works for a small software company in Bangalore. The company is run by non-technical management, and hence the policies are entirely different. He wants suggestions on the following topics:

1. If an employee resigns, the management will ask him to stay back. If the employee refuses and wants to go ahead with the decision, the management will warn him or relieve him by giving a bad performance letter. This happens even if the performance of the employee is excellent in the company.

2. They are also asking for 2 months' gross salary (can this be gross?).

Do we have any rules to avoid or face the above-mentioned happenings?

Whether an offer letter was given to your friend? If so, is there any clause in it for the payment of 2 months of wages in case of resignation/removal without prior notice. If no such thing is there, your friend is not liable to pay any amount. If such a clause is there, your friend is liable to pay the amount only if he has not served prior notice.

Furthermore, he can go to the court about the threatening nature of the management. The Supreme Court and other courts have given judgments that employees have the right to join any company, and employers cannot restrain them. In the event the employer threatens him, ask him to go to court using Article 226.

The two-month notice period is mentioned in the offer letter, so we can't do anything about it. But considering the first point, is it enough to just inform them about Article 226?

If a two-month notice clause is present, he can give notice and resign to avoid payment. If he intends to resign before he has to pay the amount, after giving notice, it is his right to take a relieving letter. Is it really essential for him to have the relieving letter? In which company does he want to join? If it is a PSU, it is mandatory. If it is a private company, it is not mandatory as experience can be counted using the appointment letter and payslip. If it is deemed mandatory, then he can sue in court that the employer is harassing him without issuing the relieving letter using Article 226 of the constitution, for which he has to consult an advocate.

Article 226 of the Constitution of India discusses the "[b]Power of High Courts to issue certain writs." Nowhere in the Constitution of India does it mention a relieving letter from an employer to an employee.

Employment contracts should typically outline procedures for employee separation, including a minimum notice period. It is a good and fair practice that employers expect every employee to adhere to, to help manage the business effectively. A smooth transition from one job to another is always recommended, and this practice should be upheld. However, there is currently no legislation addressing this issue.

There is no legal basis for the return of already disbursed salaries; such practices are deemed unfair. Issuing a "Bad relieving order" can significantly tarnish the reputation of the company issuing it. If faced with such a situation, it is advisable to present the facts to the new employer without worrying about its impact.

Chennai.
Ibrahim

If the employer says he won't relieve the employee and threatens the employee that even if they leave, they will be given a bad relieving letter, what can we do?

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Dear Ibrahim,

I want to clarify the matter. Why is a writ issued? Suppose you have been terminated unfairly and you are a management employee. Ultimately, you cannot go to ALC and raise an industrial dispute. Hence, the legal recourse that is available is to urge the High Court to issue a writ of mandamus to give directions to management to maintain the status quo and set aside the dismissal order until the legality of termination is judged. You can refer to numerous such cases in the judgments delivered by courts. The Constitution has empowered the High Court to issue writs of Mandamus, Prohibition, Certiorari to order certain parties to do or not to do something until judgment is delivered.

In the instant case, the subject employee is not getting a relieving letter, and the employer is threatening him that he will issue a bad relieving letter. In such a scenario, the only option available is to go to the High Court to get the necessary direction. I think this may clarify your doubt. 😳

Hello Arindam,

I agree with Ibrahim to an extent.

If an employee is not ready to continue working in any company, the employer cannot enforce an individual to stay there.

However, please understand the reason why a company lays down policies on notice period. When an employee is assigned work, he/she is being depended upon for completion of the same tasks.

If he/she decides to leave the organization, he/she is leaving work unfinished. The company does need some time to find a new resource to take over unfinished work and come up to mark.

Many times, companies incur heavy costs on training employees in the initial days of their work and "pay" the employees to get trained, the cost of which can be evened out only over a span of few months depending on the productivity of that individual!

Moral of the story, you are important to the company no matter what the representative of the company says.

If your friend is not keen on serving the notice period, he can buy out his notice period.

And as Ibrahim rightly said, if your friend receives a bad relieving order, he can be honest about it at his new place of employment. I'm sure the recruiter will understand.

Regards,

Nayana C

Dear Mr. Avimtnl,

You are confusing yourself between government employment and private employment. I am a law graduate practicing HRM. Please clarify all your doubts with some legal experts. Kindly correct your facts before publishing in the forum as it may mislead our colleagues. :)

Regards,
Chennai Ibrahim