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Rajinder Kumar Arora (Advocate)     15 September 2021

Exit undertaking/agreement

May I request the Experts to kindly advise on the legal sanctity of any employer asking its ex-employee (who has left the employment for more than three months ago) to sign an exit undertaking/agreement prescribing non-compete/solicitation clauses beyond the tenure of employment, before releasing his F&F settlement amount? Any case law please? Thanks in advance.


 4 Replies

Rama chary Rachakonda (Secunderabad/Telangana state Highcourt practice watsapp no.9989324294 )     15 September 2021

Simply put, an employee exit process consists of the policies and procedures (exit formalities) that are followed when an organization is offboarding an employee. The steps are essentially the same whether the employee leaves voluntarily or involuntarily. Only 29% of organizations have a formal exit process

Rajinder Kumar Arora (Advocate)     15 September 2021

Thanks, Sir! But, the practice of exit undertaking does not exist in the Company nor was it mentioned at the time of cessation of employment. It is now only after 3-4 months of quitting that the employer is asking the ex-employee to sign an exit undertaking containing several restrictions, which are likely to hamper employee's future career. Company is perhaps trying to usurp payment against F&F settlement, which, under the law, it should have been paid within two days of employee leaving the job.

Shubham Bhardwaj (Advocate)     15 September 2021

Dear Mr Arora, I have gone through the facts provided by you. At this stage you dont need a case law but the remedies. So here are the remedies. (1) File a complaint under section 405/406 Indian Penal Code for Criminal Breach of Trust. The amount that is lying with your employer did not belong to him at any point of time. Rather, it was your salary/income which was kept with the employer either due to operation of some law (such as PF etc) or pursuant to a written contract. Therefore, if he is not paying it, he is clearly liable to be proceeded against u/s 405/406 IPC. File the complaint in local police station and take a receipt. I am sure the police will not do anything but if they do you win. Because the matter would be compromised by your employer out of fear. If police does not do anything, file Application under Section 156(3) Cr PC to JMIC. Court will summon them to face charges. (2) File summary suit under Order XXXVII CPC for recovery of amounts. You will be needing a skilled lawyer to pull this off. In case you need any assistance with drafting of complaint to police or Application under section 156(3) Cr PC, contact me through personal message (PM) option on the website. Regards Shubham Bhardwaj (Advocate) District & Session Court, Chandigarh Punjab & Haryana High Court, Chandigarh Disclaimer- Opinion is only for guidance.
1 Like

Rajinder Arora   29 September 2021

Guidance/opinion sought from other experts also, if they may kindly render! Thanks.

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