>> Courts of law are; ‘Parents Patriae’; Parent to the nation.
Courts of law have and time and again rose to identify the needs of community of employees, defended them from hardships at the hands of employers and provided relief to employees and protected their employ-ability.
Courts of law have delivered relief by delivering trendsetting judgments to such employees that are not covered by umbrella of Labor Laws and have defended their rights and employ-ability.
>>> The persons that are not covered by the definition of ‘Workman’ as in Industrial Disputes Act, ‘Employee’ as in Shops and Establishments Act are a harried lot.
They do not enjoy protection from umbrella of Labor laws.
In today’s scenario, employer does prefer to bind employees by harsh conditions of agreements/contract of employment crafted in a manner that are tilted towards employers.
Then such agreements are flaunted with impunity by employers and their attorneys and employees are subdued.
Courts of law also examine service conditions signed by employees by their free will with employers.
Some common issues that bother employee’s are:
--- Relieving Letter: It has become a set precedence that each prospective employer applicant employee asks to submit: Relieving Letter’ from past employer(s).
‘Relieving Letter’; has become a document that is unavoidable requirement to remain; ’Employable’.
‘Relieving Letter’; signifies that employee was employed with establishment and has separated (by resignation or termination) and nothing is due against employee. It may have mention of conduct of employee.
Some of the employers might have mentioned conditions in contracts of employment/appointment letter/service rules/HR policy/exit policy/FnF policy/employee handbook, etc that employee has fulfill to get ‘Relieving Letter’ and even conditions under which ‘Relieving Letter’ shall not be issued by employer.
--- Jurisdiction of Courts: Employers are known to mention in contracts of employment/appointment letter the Jurisdiction of Courts and the location inserted by employer might be location of Registered/Corporate office of the establishment/employer.
The location may not be location of employee and or location office where employee is located.
--- Completion of Tasks: Employers are known to mention in contracts of employment/appointment letter that employee shall have to complete the tasks before getting relieved.
It might be completion of projects on which employee was working.
--- Service of Full Notice Period: Employers are known to mention in contracts of employment/appointment letter, that if employee has initiated separation by notice of resignation , employee shall have to service full notice period and acceptance of notice pay in lieu of notice period, shall be at the discretion of employer.
Whereas, employer might have reserved the right with it, to terminate employment of employee, by tendering notice pay in lieu of notice period.
Although the contract of employment should promote equitable discretions still since employee has signed the acceptance of such terms and conditions in contracts of employment/appointment letter, the employers press such conditions against employee.
The employers keep different period for exit and joining.
While an incoming employee may be asked to join within say..30days.............and outgoing employee may be asked to leave only after serving full notice period of say.................90days.
The employee faces double prejudice; one from current employer and other from next employer.
--- Exit Formalities: Employers are known to insert in contracts of employment/appointment letter/service rules/HR policy/exit policy/FnF policy/employee handbook, etc that employee shall have to clear the outstanding from market/customers.
It is a complicated issue as employee is not directly responsible to pay the bills the establishment has raised in the name of its customers/clients.
--- Handover of charge and assets: To whom employee should handover charge and assets?
Employee should preferably mention in notice of resignation, subsequent communications, and final resignation that to whom he/she should handover charge and assets, under proper acknowledgment, within and up to last Working day/date as per notice of resignation/resignation.
Employee should build irrfutable written record
--- The employee should try and collect job advertisement, job application, interview call letter, selection letter, offer letter, appointment letter, service agreement/bond if any signed with employer, salary slip of all months, PF a/c slips of all years, ESIC card, Form 16 of each year, copy of notice of resignation and final resignation, proof of its dispatch/delivery, acknowledgment and acceptance of notice of resignation and final resignation, acknowledgment of handover of charge/assets, correct Full and Final statement, Form 16 of last year as per correct Full and Final statement, NOC/NDC, appraisal policy/matrix/forms/reports, FormI for payment of Gratuity, payment of Bonus, expense reimbursement statements, attendance record, rewards/awards/incentives/performance linked bonus etc etc …………..
These may suffice as good as Relieving Letter, Service certificate and many employers may absorb deserving candidates on the strength of these documents.
>>> Persons that are not covered may umbrella of labor laws may still have the option to join and be a member of Forums/associations/unions of such employees.
Such unions might be affiliated with trade Unions.
Such Forums/associations/unions can render support, help and guidance.
Employee should retain access to an able counsel specializing in service matters for in time/beforehand consultation so to defend his/her long term interest and become properly informed.
The employees that are not properly informed are prone to exploitation.
>>> The following judgment is excellent and trendsetting.
In the following case the court of law has defended employee from adversities and has provided full relief and retained the employee as: ‘Employable’. The employee had resigned at a notice of 2 days, and was denied relieving letter:
1. By this order, the preliminary issue in the suit concerning the territorial jurisdiction of this Court to try the suit as well as the question of grant of an ad interim injunction are being dealt with.
2. The Plaintiff was appointed by the Defendant L & T Finance Limited by a letter dated 19th June 2006 as an Assistant Manager in their Corporate Product Financing Division at New Delhi. Significant among the terms and conditions of employment were following:
"Place of Work:
You will be assigned to work at our office in New Delhi at present. However, you will be liable to be transferred to any of the company's establishment in India or outside, as and when required by the management.
Termination of Employment:
The above offer of employment is for continuous employment. However, it may be terminated at any point of time by either party giving two monthâ€Ÿs notice in writing. The company has right to pay two monthâ€Ÿs salary in lieu of such notice to you. The company shall also have the right to adjust any leave due to you and/or recover from you such amounts towards notice pay for the shortfall in the period of notice.
Dispute Any dispute between yourself and the company concerning with or relating to or arising out of this employment, shall be subject to the jurisdiction in Greater Mumbai only."
3. The said letter was issued from the Corporate Product Financing Division of the Defendant at Bandra (East), Mumbai. At the foot of the first page of the appointment letter, the address of the registered office of the Defendant at Ballard Estate, Mumbai was indicated.
4. On 12th February 2007, the Plaintiff was informed of the confirmation of his appointment with the Defendant with effect from 3 rd January 2007. The updated Human Resource Manual & Procedure of the Defendant as on 13th October 2008 has been filed by learned counsel for the Defendant. The two clauses relevant for the purpose of present case are follows:
"Abandonment If unauthorized absence exceeds eight working days (consecutive), the management at its sole discretion, strike off the name of the employee from the rolls of the company on ground of abandonment of employment and advise him/her accordingly. If within 15 days from receipt of such advise, the employee presents himself/herself and offers an explanation/reasons of absence, the management has an option to review the matter and confirm or otherwise stand by its earlier decisions.
Exit Policy An employee who wishes to resign from the services of the company will be required to give the notice of resignation as per terms of appointment or subsequent amendments thereof. An employee will have to serve a minimum period of 2 month as notice period or agreed as per the term of employment.
If the employee desires to be relieved earlier than the notice period, management at its sole discretion may decide to waive the notice period or otherwise the employee is required to surrender the equivalent salary (Basic Salary) applicable for the notice period waived. If the company asks the concerned individual to leave before the notice period, then the company will pay the equivalent salary (Basic salary) for the remaining notice period.
Management at its sole discretion may sanction leave to the employee during his/her notice period provided such leave exists to the credit of the individual.
In case an employee leaves within 1 year of service, no unclaimed leave will be either encashed or compensated against the settlement of notice period. However, in case of an employee leaving after completion of 1 year of service, the unclaimed leave may be either encashed or compensated or settled against notice period at the discretion of the arrangement. The encashment would be as per leave Rules (i.e. only Basic salary).
The company may at its sole discretion terminate the employment without notice and/or salary in lieu of notice, if in the opinion of the company, the continuance of his/her employment is detrimental to the interest of the company. In the event of such termination, all benefits/perquisites/ allowances shall stand forfeited.
All the loans availed by the employee are to be settled before the date of resignation takes effect. Necessary clearances on handing over the company assets should be obtained from the respective authorities."
5. On 4th August 2008, the Plaintiff resigned from the services of the Defendant by sending an e-mail……
"From: Gupta Vishal Sent: Monday, August 04, 2008 11:27 AM To: Ahluwalia Jaspal Singh CC: Kalra Anil; Ramesh V; Samant Biswajit D.; Singh Niraj Kumar Subject: Letter of Resignation Dear Sir, This is to formally inform that I will not be able to continue my service for L & T Finance Limited as Assistant Manager - TEG, for Delhi - NCR region. For personal reasons I would like to resign from the aforesaid post. I wish to be relieved by closing hours of 5/8/2008.
….. I would request you to please relieve me of my official duties on 5/8/2008. I am willing to compensate the organisation as per policy in lieu of my notice period….
6. In response to the above e-mail ……………replied by e-mail ….. to the following effect:
"RE: Letter of Resignation ….. August 04, 2008 at 11.42 AM To: Gupta Vishal CC……
you are required to resolve the Non Starter Cases done by you after which only you will be relieved from the services of the Organisation.
7. On 5th August 2008, the Plaintiff received an e-mail at 5.59 pm ………….. attaching an Exit Interview Form, Clearance Form and the details of the amount to be recovered from the Plaintiff……………………………… the recovery of the amount due for two monthsâ€Ÿ salary in lieu of notice, the LTA Recovery and the General Purpose Loan Recovery, a total sum of Rs.2,20,318/- was indicated.
8. It requires to be noticed that in response to the e-mail dated 4th August 2008………….. stating that "as per the report from the system, two cases are been shown as non starter cases in which legal action has been already initiated." On 6th August 2008 …………………. sent an e-mail to him that "Vishal, you are required to resolve these cases and ensure No Loss is incurred, till that time your release from the organisation is withheld." The Plaintiff has placed on record the report of non starter cases as on 15th October 2008 which shows that there were two cases of commercial vehicles financing pertaining to one Birender Singh and the other Sanjay Singh. Birender Singh had given some post- dated cheques, some of which had been encashed and some dishonoured. It is stated that legal action has been initiated as regards the dishonoured cheques.
9. It is not in dispute that on 14st August 2008 the Plaintiff issued to the Defendant a cheque in the sum of Rs.2,20,318/- and this was encashed by the Defendant on 21st August 2008. It is, however, contended by the Defendant that this amount has been placed in a sundry account.
10. The controversy in the present case is that the Plaintiff has not been issued a relieving letter by the Defendant as a result of which he is unable to take up employment with any other organization. According to the Plaintiff, he received an offer for appointment from Axis Bank but was unable to join as he could not produce the relieving letter from the Defendant.
11. Faced with a difficult situation where the Defendant refused to issue a letter relieving him from its service, despite his clearing the dues, the Plaintiff wrote to ….. Head (HR) of the Defendant on 2nd September 2008 an e-mail as follows:
"From; Gupta Vishal Sent : 02 September 2008 11:27 To: Kalra Anil CC: email@example.com Sub: Re: Letter of resignation_Vishal Gupta Dear Sir, This is in reference to my mail sent to you on 25/8/2008 in which I intimated that the cheque of Rs.2,20,318/- in the name of L&T FINANCE LTD as my settlement amount is cleared from my bank account, but till date I have not been relieved from the organisation. If organisation is not relieving me, I am ready to join the services of the organisation (L&T Finance Ltd) and also I request you to kindly refund the settlement amount recovered from me through cheque no. 233075 of UTI Bank LTD.Waiting for your reply at the earliest.
12. In response to the above e-mail, …… wrote to the Plaintiff on 18th September 2008 as follows:
"To Vishal Gupta Asst Manager-EPG-TEG P.S. No. 735310 Location: New Delhi Dear Vishal, Refers to your request of 2nd September 2008 for resignation, we would like to put the following on record:
1. You have already been informed that you have done irregular lending in 2 cases where no repayment has come so far and customers and assets are not traceable.
2. We hereby give you a months time i.e. upto 30 th October 2008 to find out the customers to whom you have done the lending and also the assets for which you have done the lending.
Please note that if the above is not organized by 30 th October 2008 the company will initiate the appropriate civil/criminal action against you.
13. The Plaintiff then sent an e-mail on 15th October 2008 to ……………………….pointed out that his requiring to resolve the non starter cases was not a condition mentioned in the offer letter. He maintained that his employment stood terminated when he paid two monthsâ€Ÿ salary in lieu of notice which was accepted by the Defendant. As regards the documents collected by him from the borrowers in the two „non-starterâ€Ÿ cases, he mentioned that the current address proof and photo proof in both cases were duly forwarded to the Defendant. He further informed that Birender Singh was still available at the same place mentioned in his loan application. In the same e-mail, the Plaintiff informed the Defendant of the other address of Sanjay Singh He called upon the Defendant to immediately issue him a relieving letter.
14. Thereafter, on 4th November 2008, the present suit was filed. The prayers, inter alia, are for a declaration that the Plaintiff is entitled to a letter relieving him from the Defendant with effect from 4th August 2008; for a permanent mandatory injunction directing the Company to issue a relieving letter and other reliefs including refund of an amount of Rs.32,890/ paid by the Plaintiff to the Defendant as salary in lieu of notice; reimburse his out of pocket expenses and compensation for the loss of job with Axis bank. He also sought damages for the loss of mental peace and for the mala fide actions of the Defendant…..
15. …………….. On 28th April 2009, the following order was passed by this Court:
…………. there appear to be some element of settlement and it is deemed expedient to give the parties an opportunity for the same.
The plaintiff seeks interim order directing the defendant to issue the employment relieving certificate to the plaintiff. It is stated that the said certificate is necessary for the plaintiff to take employment elsewhere. The counsel for the defendant has stated that the plaintiff had, in fact, abandoned the employment of the defendant and contrary to the agreement with the defendant and has otherwise not given all the information required to be submitted as to the business transacted by the plaintiff on behalf of the defendant and owing to which the defendant is suffering losses. The counsel for the defendant has stated that if the plaintiff were to cooperate with the defendant and give the requisite information to the defendant, the defendant would consider issuing the relieving certificate without prejudice to its rights and contentions.
The counsel for the defendant has also contended that this court does not have the territorial jurisdiction to entertain the suit.
To explore the possibility of the settlement it has been agreed that the plaintiff shall visit the office of the defendant at Moti Nagar, …………….. and give all the information which is in his power and possession ……………… If the plaintiff is required to go to the office of the defendant on subsequent dates also, the plaintiff shall do so.
List on 15th May, 2009 for further consideration. If no settlement is arrived at, the arguments on the application shall be heard on that date."
16. Pursuant to the said order, the Plaintiff went over to the Defendantâ€Ÿs office on two …………………. What happened during those meetings is differently described by the Defendant and the Plaintiff.
According to the Plaintiff, instead of asking him about the two non-starter cases, the Defendant asked him about various other cases and therefore, they were not acting fairly. According to the Defendant, the Plaintiff was not cooperating with them and declined to give them the details regarding the nine loan defaulters whom he had introduced.
The Defendant has placed on record the copy of a letter dated 11th May 2009 addressed by it to the Plaintiff listing out the 15 cases of defaulting parties to whom loans were advanced by the Defendant on the recommendation of the Plaintiff.
17. Despite learned counsel for the parties taking adjournments for exploring the possibility of a settlement, it was reported finally that no settlement was possible. The Defendant was prepared to give a letter stating that the Plaintiff had ceased to be an employee of the Defendant on account of abandonment of services; that his name stood struck off from the rolls and that the certificate was being issued without prejudice to the rights and contentions of the Defendant in the present suit. This kind of a qualified relieving letter was of course not acceptable to the Plaintiff.
The parties were therefore heard at length on the application for ad interim injunction as well as the question of territorial jurisdiction of this Court to try the suit.
18. As regards the preliminary issue of territorial jurisdiction, it is submitted on behalf of the Defendant that if the suit itself was not maintainable then the question of grant of an ad interim injunction would not arise…………………. in view of the specific clause in the appointment letter that any dispute between the Plaintiff and the Defendant "concerning with or relating to or arising out of" the employment was "subject to the jurisdiction in Greater Mumbai only", the suit filed by the Plaintiff in this court was not maintainable. ………….. even for the purpose of Section 20 (a) and (c) CPC, the corporate office of the Defendant which issued the appointment letter was in Mumbai, the refusal of the acceptance of the resignation letter was also at Mumbai and therefore, the cause of action arose only within the jurisdiction of the Court in Mumbai.
It is further submitted that the granting of any relief of mandatory injunction directing the Defendant to issue a relieving letter to the Plaintiff would tantamount to granting the final relief itself and this was impermissible in law.
19. It is then submitted on behalf of the Defendant that when the employee had a poor track record and had abandoned its services, the Court could not compel it to issue a relieving letter simpliciter. It is repeatedly pointed out that at least 15 of the borrowers whom the Plaintiff had recommended for loan had defaulted. The full details of the borrowers were not available with the Defendant. Considerable losses were suffered by it on account of the conduct of the Plaintiff. There was no question, therefore, of the Defendant being asked to issue a relieving letter to the Plaintiff unconditionally. It is submitted that in any event a decision on this aspect would require the case to go for trial. At the same time, it was contended by the Defendant that there was no question of the Plaintiff being taken back in its service particularly when the Defendant had lost confidence in the Plaintiff. Therefore, this was a case where no relief could be granted at this stage even by asking the Defendant to take the Plaintiff back in service.
20. On the other hand, it is contended by the Plaintiff that the observations made in A.B.C. Laminart Pvt. Ltd v. A.P. Agencies (supra) do not categorically hold that the ouster clause would also apply in the contracts of employment and that the said judgment was given in the context of a commercial contract.
21. As regards the submission regarding the territorial jurisdiction of this Court, there is an ouster clause in the contract in terms of which only the courts in Greater Mumbai would have jurisdiction……………….. the Court in Delhi has no jurisdiction.
22. The decisions of the Supreme Court in regard to „ouster clauseâ€Ÿ have invariably been in the context of commercial contracts. ………………………
However, the following observations in the said judgment appear to indicate that the convenience of the parties is also a factor that would have to be borne in mind, and that the jurisdiction of the court cannot be said to be completely excluded:
23………………… Again following the list of judgments from ABC Laminart Pvt. Ltd v. A.P. Agencies, it was held ………………….could be distinguished on the basis that they were delivered at a time when the decision in ABC Laminart Pvt. Ltd v. A.P. Agencies
24. In the considered view of this Court the decisions on the „ouster clauseâ€Ÿ in the context of a commercial contract have to be held to be distinguishable in their application to a case of a contract of employment. In the employment contract, an employee would not be able to insist that the disputes, if any, are to be referred only to one court and not the other. The employee usually accepts the employment with all the attendant terms and conditions or not at all. In the present case, the letter of employment no doubt states that it is a transferable job. Still, the Plaintiff was to work primarily for the Delhi office of the Defendant. He, in fact, rendered services only in Delhi office. He submitted his resignation at Delhi. For an employee no longer in service to be asked to go to Mumbai for instituting and pursuing litigation would render the remedy expensive and inefficacious for such employee. It would work harshly against him. Moreover, in a situation like the present one where the prayer is essentially for a direction to the Defendant to issue a relieving letter, to direct the employee to go to a different city only because of the ouster clause seems to be unfair and unjust…………………. As regards the comparative hardship, the Defendant has an office in Delhi and there will be no difficulty for it to appear before this Court and defend itself
25. As far as Section 20 CPC is concerned, in terms of clause (b) thereof, the Defendant has an office in Delhi. The letter of appointment was received in Delhi. The email correspondence referred to hereinbefore shows that the Plaintiff's resignation letter was sent from Delhi and the refusal of the relieving letter was communicated to the Plaintiff in Delhi. The result is that the Courts in Mumbai (because of the clause in the appointment letter) and this court, on account of the substantial part of the cause of action having arisen here, have jurisdiction to try the case. The observation in ABC Laminart in para 21 that the intention of the parties to completely oust the jurisdiction of the court in Delhi will have to be tested in the above background. The use of the word "only" in the instant case to qualify the ouster clause cannot be read as conferring exclusive jurisdiction on the court in Mumbai.
26. For the above reasons, it is held that the ouster clause in the letter of appointment of the Plaintiff cannot preclude this Court from entertaining the present suit. The preliminary objection of the Defendant to the maintainability of this suit on the said ground is hereby overruled.
27……………………. the conduct of the Defendant in refusing to take the Plaintiff back into service becomes relevant……………………….. During the course of arguments, the learned Senior Advocate for the Defendant repeatedly stated that since it had lost confidence in the Plaintiff it would not permit him to join duties. As far as the Defendant was concerned, the Plaintiff was no longer in their service and yet, they would not issue him a relieving letter simpliciter. To this Court, it appears that the point of refusal of the Defendant to take back the Plaintiff into service while at the same time refusing to grant him a relieving letter is not legally tenable.
28…………..Even as regards the non-starter cases, the Plaintiff appears to have given the information to the Defendant. ……
29. The stand of the Defendant is not consistent with the terms of the contract of employment. It accepted the payment made by the Plaintiff for two monthsâ€Ÿ notice period as well as the outstanding loan amount which was a condition of the Plaintiff being relieved from service. It is not in dispute that this cheque, which includes the loan amount, was encashed. Therefore, there are no monetary dues as far as the Plaintiff is concerned. There being no other term of service that requires to be fulfilled for issuing a relieving letter, the refusal by the Defendant to do so seems unjustified. The stand of the Defendant that the Plaintiff has „abandonedâ€Ÿ his service is also not borne out by the correspondence. In fact, the Plaintiffâ€Ÿs offer to join back service has been refused by the Defendant.
30. The only question that remains is whether a mandatory interim injunction by this Court can be issued at this stage to the Defendant. The rule that a Court cannot grant an interim relief that would amount to grant of the final relief at the interlocutory stage is not an inflexible one. It would depend on the facts of every case…………………………. It cannot ipso facto be applied to the instant case where the dispute arises out of a contract of employment, and where the dispute is limited to the employer refusing to issue to the employee, who has resigned, a relieving letter/certificate. If, for the relieving letter, the Plaintiff has to wait for the conclusion of the trial, the whole purpose of the Plaintiff coming to the court would be defeated. The denial of a relieving letter by the Defendant in the instant case has already prevented the Plaintiff from accepting any other offer of employment.
33. In the instant case, a direction to the Defendant to issue a relieving letter is not the only relief being sought by the Plaintiff in the suit. Therefore, in issuing such a direction, the suit itself does not become infructuous. All that the Defendant is required to do is to issue the Plaintiff a letter stating that he is no longer in their service. Any other qualification to such statement might render the cessation of the services of the Plaintiff stigmatic. In such an event, the resort to a clause of termination simpliciter by the Defendant would be futile and the Defendant will have to acknowledge that the Plaintiff is still in their service and proceed against him disciplinarily. This it refuses to do. Viewed from any angle, therefore, a case is made out for issuing an interim mandatory injunction to the Defendant to issue to the Plaintiff a simple relieving letter stating that he is no longer in their service. The balance of convenience in issuing such an interim injunction is clearly in favour of the Plaintiff.
34. Accordingly, an interim mandatory injunction is issued directing the Defendant to issue to the Plaintiff a relieving letter within a period of seven days stating that he is no longer in their service. The said letter will not state that the Plaintiff has abandoned the service or any other qualification that prevents the Plaintiff from taking any other employment.
Delhi High Court
Vishal Gupta vs L & T Finance Limited on 9 September, 2009