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Sathisha (Proprietor)     14 May 2012

Contractual agreement with employee & employer

Dear Experts.

I am working in a interior company from past six years, before joining to the said company, i am agreed for two year contract. Now i got an offer from the similar industry with better offer & position. Now i am having some doubts. Kindly clarfy?

  1. Is it right to accept similar company offer?
  2. Is it right to join the next date after releaing the previous company?
  3. Is there any breach of contract as per employment act?
  4. If yes what action can take the previous company ?
  5. If a senior person after notice period without reliving letter join with the new company in the next day is there any rules as per breach of contract act?
  6. What is the meaning of breach of contract?
  7. Is there any condition to join with similar company after two year or three years etc., ?

Assume that i am broken the breach of contract, what action can take to leagly.

Kindly clarify & guide me.

Regards

Sathisha

 



Learning

 5 Replies

Anjuru Chandra Sekhar (Advocate )     15 May 2012

Your contract period is only for two years.  You have already put up six years service.  So there is no problem in leaving the company.  If you join the new company after notice period, it is not breach of contract.  However whether the new company has any objection to admit you withot relieving letter from the old company, is a point to be considered.  But in no way the old company has any action to take against you. 

pradeep (na)     15 May 2012

1. Yes, every one is doing that. After all a new employer would like to utilise your experience in the similar field. Only thing you should be careful to reveal any sensitive information (if in possation of) of the old employer to new one if they are competitors in market.

2. Yes, even you can join the same day A/N, if you are released in B/N.

3. No

4. NA

5. It depends on new company, whether they will accept you without releasing from previous employer.

6. The terms and conditions in the appointment letter of your present company and various documents signed and submitted by you at the time of joining may constitute a contract between you and company. So not standing by any those may be termed as The breach of contract.

7. No. Even if you have any contractual bond to serve that company for a specified period, you can leave the company before completion of bond period by paying the bond amount.

Kumar Doab (FIN)     15 May 2012

You may study your appointment letter and check if you have signed on Non disclosure, Non Compete clause. Company might have added that employee shall have to sign e.g. non disclosure clause at the time of termination of employment contract.

Depending upon the language you may prepare your defense. You may not put anything by a statement on record while working with new employer which can be used against you by old employer as revealing their trade secret, sensitive information.

 Relieving letter is issued post all settlements. Settlements due at the end of employee are, to complete tasks on hand, return company property/handing over the charge (under proper acknowledgment), advance/loan/imprested cash ( which company can adjust in FNF statement also if amount is sufficient to adjust), any other item on record.

Relieving letter is more of a trend, practice which states that employee does not owe any thing to the previous employer.

Company can sit over the relieving letter. Acknowledgment of notice/resignation/company property, acceptance of resignation, FNF statement, settlement and payment of FNF dues, last salary slip, can serve as good as relieving letter.

 

It shall be appropriate to tender reasonable notice and avoid abrupt termination. Remain amiable, vigilant, and do not leave any room for company to charge you on any count.

Some companies press employee to sign a non disclosure agreement at the time of separation and apply coercion like if employee does not sign relieving letter shall not be issued.

Employee should inform the next employer that current employer (preferably in writing under acknowledgment) is unwilling to issue relieving letter and list of documents employee can supply. New Employer can accommodate the new employee without relieving letter. Be smart.

 

1 Like

Chandeep Singh (Final Semester student)     28 May 2012

The terms of reference of the service contract needs to be reviewed before giving a competent advise. Though, the circumstances you have designed in your request clearly reflects that you were supposed to be an employee for the period of 2 years only even though such 2 years can also be challanged on the notice of either party on ground of any misconduct or any provision contained in the contract contrary to labour laws. 

There is no employment Act in legislature. This is a clear cut case of Indian Contract Act, 1867. 

Breach of contract means, when either party does any act which is contrary to the terms and conditions of the contract.

In nut shell, you go ahead with your new job through a proper channel i.e. after serving a notice of specific period provided in the contract. Your present company cannot sue you.

 

Regards

Chandeep Singh

B.Com, LLB

Chandeep Singh (Final Semester student)     28 May 2012

The terms of reference of the service contract needs to be reviewed before giving a competent advise. Though, the circumstances you have designed in your request clearly reflects that you were supposed to be an employee for the period of 2 years only even though such 2 years can also be challanged on the notice of either party on ground of any misconduct or any provision contained in the contract contrary to labour laws. 

There is no employment Act in legislature. This is a clear cut case of Indian Contract Act, 1867. 

Breach of contract means, when either party does any act which is contrary to the terms and conditions of the contract.

But, here I would like to warn you that you cannot use designs or any intellectual property of the present company (including soft copies of various data and files).  Even though such designs are made by you under the tenure of employment. That property belongs to the company. Infringment of those, may made you liable under Design Act, Copy Right Act and other Intellectual property laws.

In nut shell, you go ahead with your new job through a proper channel i.e. after serving a notice of specific period provided in the contract. Your present company cannot sue you if you abide by its conditions.

 

Regards

Chandeep Singh

B.Com, LLB


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