How to Prevent "Salary as Leverage" and "Process as Punishment" During Employee Resignation: A Compliance and Ethical Dilemma - CiteHR

On December 26, 2025, The Economic Times reported a Reddit-shared account where an employee said his resignation attempt spiralled into what felt like punishment. According to the story, he informed HR over a phone call that he wanted to leave because he could not manage extensive travel and was facing health issues. Within a day, he said HR emailed instructing him to report in person for a medical assessment by a company-approved doctor, which he interpreted as an attempt to complicate the resignation. He also alleged his salary began getting delayed and new conditions appeared. The employee said he was on probation, had been placed on sabbatical leave, and that he had not signed an employment bond, notice period clause, or formal acknowledgement binding him to extended service. He described a punishing commute and serious health symptoms, and said he simply wanted pending salary and clean exit documents to focus on recovery.

This is the kind of workplace story that makes other employees stop speaking up. Because the emotional message is clear: if you try to exit, the system may trap you. When salary becomes a lever, it is not just financial stress; it is psychological captivity. The forced-medical-assessment element adds another layer of fear: that your body will be used as a compliance weapon, that you will be labelled "unfit", that your exit will be delayed until you give up. And the most corrosive part is the audience: every colleague watching learns what happens to someone who tries to prioritise health over demands. That is how toxic cultures replicate - not through speeches, but through consequences.

From a compliance lens, wage payment is not a "nice-to-have". The Payment of Wages Act, 1936 contains clear expectations on timely wage payment, and it also contemplates prompt payment of earned wages upon termination by or on behalf of the employer. Even on probation, wages already earned are not optional. Separately, medical assessments should be tightly governed: role-relevance, consent/notice, confidentiality, and minimal data handling. Under the Digital Personal Data Protection Act, 2023, health-related information is personal data and must be processed with clear purpose and safeguards; sloppy handling here is not just unethical, it is a future regulatory nightmare. For HR leaders, the control lesson is simple: resignation processes must be standardized and non-retaliatory. Design an exit policy where payroll cannot be "paused" as leverage, where medical checks (if any) are policy-based and documented, and where final settlement timelines are tracked like statutory compliance. Exits are where organisational character is most visible.

Source: @EconomicTimes, @IndiaCode

When a company makes exit painful, what is it really protecting - business continuity, control, ego, or fear of precedent - and what does that do to the moral credibility of HR?

What guardrails would prevent "salary as leverage" and "process as punishment" during resignation - auto-triggered F&F timelines, escalation to an ombudsperson, documented medical-assessment rules, or external audit of exits?


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The situation described is indeed a complex one, straddling both ethical and legal boundaries. It's important to remember that the core issue here is the employee's right to resign and the employer's duty to facilitate a smooth and respectful exit. When this process becomes punitive, it not only harms the departing employee but also creates a toxic work environment.

From a legal standpoint, the Payment of Wages Act, 1936, mandates timely payment of wages, including during the notice period and upon termination. Even if an employee is on probation, wages already earned are not optional. Any delay in payment could be seen as a violation of this Act.

Medical assessments, on the other hand, should be relevant to the role, conducted with consent, maintain confidentiality, and involve minimal data handling. The Digital Personal Data Protection Act, 2023, classifies health-related information as personal data, which must be processed with a clear purpose and safeguards. Any mishandling of this data could lead to regulatory issues.

To prevent such situations, companies should:

1. Standardize the resignation process: Ensure it is non-retaliatory and respects the employee's decision to leave.
2. Implement a clear exit policy: This should include non-negotiable timelines for full and final settlement, and a policy for medical checks (if required) that is documented and communicated to all employees.
3. Establish an escalation mechanism: If an employee feels their resignation is being complicated or delayed, they should have a clear path to escalate the issue, such as an ombudsman or a higher authority within the organization.
4. Conduct external audits of exits: This can help identify any patterns of punitive behavior and ensure compliance with all relevant laws and regulations.

In conclusion, it's crucial for HR to maintain its moral credibility by ensuring a respectful and fair exit process. This not only protects the rights of the departing employee but also sends a positive message to the remaining staff, reinforcing a culture of respect and fairness.

From India, Gurugram
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