Hi, We are a small-sized IT company with 50 employees. When recruiting new staff, we ensure they sign a minimum 1-year employment agreement with us. This agreement is on plain white paper (not company letterhead, not bond paper). We require them to initial each page and provide a full signature and left-hand thumbprint on the last page.
Today, two employees, who have completed 7 months of their agreement, expressed their desire to leave the company. I reminded them of their commitment to serve the minimum 12-month contract they agreed to upon joining, but they do not plan to stay that long.
I have a few questions regarding this situation:
- Is the plain paper employment agreement a legally binding document?
- Can I withhold the work experience certificate from them?
- If their new employer contacts me for a background check, what information can I disclose?
Thank you in advance for your assistance, experts.
From India, Hyderabad
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Today, two employees, who have completed 7 months of their agreement, expressed their desire to leave the company. I reminded them of their commitment to serve the minimum 12-month contract they agreed to upon joining, but they do not plan to stay that long.
I have a few questions regarding this situation:
- Is the plain paper employment agreement a legally binding document?
- Can I withhold the work experience certificate from them?
- If their new employer contacts me for a background check, what information can I disclose?
Thank you in advance for your assistance, experts.
From India, Hyderabad
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Contract of employment or appointment order is a document that shows all the terms of appointment. It is, in fact, a legal document that tells us about our relationship with the employee. A letter of appointment, duly acknowledged by the employee, will be a legal document showing a contract with an offer by the employer and acceptance by the employee, irrespective of whether it is registered or prepared under the official letterhead of the company. However, it is not necessary that all terms in the letter should be legally binding on either party. In other words, there should not be any condition that is illegal or that circumvents the general laws of the land. A contract of employment that prevents the fundamental right of taking up any employment of choice is void. It is not void because it is on plain paper but because it lacks legality. Therefore, you cannot take any legal action against the employee who left before completing the prefixed term of one year.
Secondly, you can withhold the service certificate. But by doing so, do you really benefit? Thirdly, it is up to you whether or not to give a good reference on a background check. Here also, it may not benefit you, but at the same time, by your good reference, the concerned employee may gain a lot.
Regards,
Madhu.T.K
From India, Kannur
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4526Secondly, you can withhold the service certificate. But by doing so, do you really benefit? Thirdly, it is up to you whether or not to give a good reference on a background check. Here also, it may not benefit you, but at the same time, by your good reference, the concerned employee may gain a lot.
Regards,
Madhu.T.K
From India, Kannur
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Yes, these agreements are legal because, as per the Contract Act, even oral agreements are accepted. The Contract Act does not specify any formalities regarding whether the agreement should be on bond paper or letterhead. However, in the case of certain agreements like partnerships, mortgages, etc., you need to be registered with the registrar's office in your area.
As for your second query, you cannot bind someone to work exclusively for you. You can only claim for damages, and through adjudication, you can recover damages up to the amount spent on acquiring any skills, training, etc., but not the total agreement amount.
From India, Delhi
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As for your second query, you cannot bind someone to work exclusively for you. You can only claim for damages, and through adjudication, you can recover damages up to the amount spent on acquiring any skills, training, etc., but not the total agreement amount.
From India, Delhi
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Employment Agreement.pdf
Employment Agreement.doc