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Amol Gangele (M)     05 April 2017

Past-employer unpaid dues-for not signing noncompete agmnt

Hi All,
I worked for almost @15 years with an Indian company having offices outside India also. 
It was my first company and I joined a GET. With my hardwork and extraordinary performance, I could climb the ladders of my career in this company and enjoyed very good reputation with the company and customers. 
After working for so many years, in Sept 2015 I decided to leave this company due to some family reasons (treatment needs for by Special Child) and submitted by resignation to the Company. 

I was having a handsome leave balance due to so many years of my service and was promised by my Superior and HR that it would be adjusted with my Notice period. My senior forwarded my resignation to HR mentioning my last date in the company. 

On the last day, after completion of my separation formalities and handing over all the company materials etc. when I approached the concerned HR personnel they showed me one format of the agreement termed as NDA (non disclosure agreement) however it mentioned everything about the Non-Compete clause which said I can not join the Competition of that company for 2 years (this company had many business lines and I was only working in one of these but still they wanted me to agree that I can not join the competition of the company in any of its current business lines), further it said I can not join any of the current of prospective customers of this company. 

Since I was shown this document on the last day at the end of office hours of that day and I was not in agreement with the above clauses, I refused to sign the same. Then I was told that if I do not sign this then I will not get the settlement done and will not also get the relieving letter (incidentally it also mentions all these clauses ) and the experience letter and the dues will not be cleared. It was like getting a sign on a bond at the last day. Though in general the appointment letter (@15years old) still has the similar clauses.

Since I had to join another Multinational company (so called competitor to the first company) immediately and they accepted the email sent by my superior to HR as proof of my relieving they could allow me to join. 

I then tried to contact the company HR personnel over phone and email and requested for the full and final settlement with my last month salary, PF, Gratuity and all other expenses like the payble annual bonus/Graciela. The company had a co-operative society of the employees and I had some shares worth @ INR 25000. This was also not paid. Further I was looking after the international marketing and my Expenses claims worth @INR 50,000 were also not paid to me.

After the second company where I worked @ 6 months, I joined another company and was paid all my dues and got a nice relieving letter from this second company (showed the difference between a professional Multinational company and the first Indian company for which I spent @15 years of very passionate service).

Now after @ 1.5 years still the dues are pending and I want to know what is the recourse to get this back. What happens with PF, Gratuity? 

As I understand they can not hold this legally. Please suggest how to proceed in such matter.



Learning

 20 Replies

Kumar Doab (FIN)     05 April 2017

Atleast I am not aware of any law that can force an employee to sign such covnant to get paymentof earned,FnF wages.

Has the company asked you in writing to sign such clauses/agreement; NDA/Non Compete?

Is it stated in any T&C/Rules/Policy issued to you and signed by you say; appointment letter/service rules etc that at the time of leaving you will have to sign such covenant?

You have given a very long rope to employer.

While Non Compete may not be enforceable, Non Disclosure can bother.

 

Kumar Doab (FIN)     05 April 2017

Similar queries have been discussed many times at LCI and can be searched in Search option and corresponding rules/ACT/judgments can be downloaded. 



Many authors/querist have posted such queries and have resolved without need of any litigation.

HR person may not be necessarily be employer in your case. He /she may be a Manager and stakeholder and may be in a position to help you.

So remain gentle and amiable.


Or HR person as per his masters policy for him/her may not be inclined to get any concession/waiver.


Therefore if required escalate to good offices of appointing authority.

Kumar Doab (FIN)     05 April 2017

While posting such queries employee should post basic information e.g;

 

What is this establishment: Commercial, Industrial?

 

 

What is its line of business; say Banking, IT?

 

 

The employee is located in which state?

Does Company have an office in this state?

The reporting office, Redg. Office, HO is located in which state?

 

 

How many people are employed in establishment?

 

 

What is employee’s designation and nature of duties on record?

 

 

How many persons report to employee?

Does employee has any power to sanction (not just recommend) leave/increment/appoint/terminate/appraise etc etc?

 

 

 

Can anyone cancel/amend employee’s recommendations?

 

 

The employee has worked for how many months?

 

 

The employee was under probation or confirmed?

 

 

Do standing orders (Model/Certified) apply to establishment and designation of employee?

 

Is it stated in appointment letter that employee’s service conditions shall be governed by …………policy/rules of the company? Was copy of any such policy/rule provided before signing appointment letter?

 

 

Is it stated in appointment letter that employee agrees to abide by …………..policy/rule of the company and any such/new rules/policy introduced in future?

Shall next employer absorb employee ONLY on the strength of copy of acknowledgment, proof of dispatch, delivery of resignation? OR it can cancel offer if service certificate, relieving letter is not submitted by employee? Or it can terminate later if service certificate, relieving letter is not submitted by employee?

 

 

Does employee have copy of salary slip of all months, Form16 of all years, PF number and a/c slips of all years, ESIC card etc etc?

 

Does employee have copy of all HR policies applicable to employee/service rules, exit policy, employee handbook etc etc ?

Do you have copy of copy of acknowledgment, proof of dispatch, delivery of resignation service certificate, relieving letter?

Are you a member of any employee’strade unions?

 

Did you submit FormI under proper acknowledgment?

Did you submit PF forms under proper acknowledgment?

 

Amol Gangele (M)     05 April 2017

Originally posted by : Kumar Doab
Atleast I am not aware of any law that can force an employee to sign such covnant to get paymentof earned,FnF wages.

Has the company asked you in writing to sign such clauses/agreement; NDA/Non Compete?

Is it stated in any T&C/Rules/Policy issued to you and signed by you say; appointment letter/service rules etc that at the time of leaving you will have to sign such covenant?

You have given a very long rope to employer.

While Non Compete may not be enforceable, Non Disclosure can bother.

 

Thanks for your reply.

The appointment letter (14-15 years old date) mentions that the employee can not join Competition or Customer for 2 yrs after leaving the company. But it does not say that one has to sign any such covenant at the time of leaving.

The company has not asked this in writing, but I have a phone call recording with this mention.

I always told them that I am ready to sign NDA but not with the Non - compete clauses.

I wanted to resolve it amicably thats why not taken up with legal notice or so.

Can you guide me how to claim these dues now? 

Kumar Doab (FIN)     06 April 2017

You have not replied to all points pointwise.

You may also mention what was last salary/month with Breakup?

The PF a/c is with EPFO or with approved trust of the establishment?

It has already been mentioned that: While Non Compete may not be enforceable, Non Disclosure ( and even Confidentiallity/Trade Secrets etc )  can bother.  

While your understanding is reverse.

 

Amol Gangele (M)     08 May 2017

Dear All,
After sending the reminders, I got below reply,
"
This has refer to your below captioned mail regarding settlement of your dues which is subject to following: 
"Our Company has filed a Suit for permanent injunction and damages in the Court of Hon’ble Civil Judge Senior Division, against you for the breach of terms of employment". 
We are releasing these payments without prejudice to the Suit and other rights and remedies available to Our Company under law, equity or otherwise.
Please revert.
"
Please let me know what should be the action from my side. 
The above explained situation holds true and I guess I can not be considered for the breach of terms of employement by joining competition. I have not received any notice from them and how to know if it is true?

Kumar Doab (FIN)     08 May 2017

Approach a very able counsel/law firm specializing in such/service matters at your location with copy of all communications.

Your counsel can defend you in court.

Are the  summons  delivered?

Kumar Doab (FIN)     08 May 2017

Originally posted by : Amol Gangele
Dear All,
After sending the reminders, I got below reply,
"
This has refer to your below captioned mail regarding settlement of your dues which is subject to following: 
"Our Company has filed a Suit for permanent injunction and damages in the Court of Hon’ble Civil Judge Senior Division, against you for the breach of terms of employment". 
We are releasing these payments without prejudice to the Suit and other rights and remedies available to Our Company under law, equity or otherwise.
Please revert.
"
Please let me know what should be the action from my side. 
The above explained situation holds true and I guess I can not be considered for the breach of terms of employement by joining competition. I have not received any notice from them and how to know if it is true?

 

Your counsel may opine to claim interest/damages for deliberate delay.

 

Kumar Doab (FIN)     08 May 2017

Has it supplied the service certificate,relieving letter?

Amol Gangele (M)     08 May 2017

No not yet.

Amol Gangele (M)     08 May 2017

No Sir, Not yet.

I am approaching a Counsel to check the Suit details etc and to defend me.

Regards,

Kumar Doab (FIN)     08 May 2017

At least I have not suggested to approach any counsel.

 

It shall be appropriate to discuss with local counsel specializing in Labor/service matters of unshakable repute and integrity, at your location, and understand options and merits in your case.  

 

Labor/service matters is altogether different field of law and there a few counsels that specialize in it and are well known.

Usually such cases are referred to them and should be referred to them.

Counsels worth their salt that practise in other matters usually do not meddle into such matters and refer to counsels that specialize in it.  

 

You can inquire about such counsels at LaborCourt/CGIT, Civil Courts, CAT, HC,SC…..  

 

Your own elders of the family, well wishers, employees’/trade union leaders, Family lawyer, DBA officials  etc etc can also help you to find such counsel.

 

Employees’/trade union leaders can also help you.
 

Kumar Doab (FIN)     08 May 2017

Avoid persons loitering at On line portals like LCI posing as Experts to allure unsuspecrting querist, fishing for business.

 

There are endless numbers of threads at LCI also by querist that have been fleeced at LCI.

 

If you are confident that you are well versed and can handle your matter as PIP ( party in Person), go ahead.  

 

Amol Gangele (M)     08 May 2017

Furthermore, this Company deducts Gross salary for adjusting the Notice period from Employee but paying only Basic Salary when the COmpany has to pay to the Employee. Is there any rule for this? Can we force them to adjust the leaves for the Notice Period?

In my case I have served 1 month of notice from the 3 months notice period and was told that the balance 2 months of Notice will be adjusted with my credit Leaves. However at the time of sharing the F&F settlement they have deducted the 2 months gross salary and credited only the basis salary for the leaves balance. This was I am at loss. Is there any law for this?


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