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arinjal bose (asst mgr)     09 February 2013

Impt regarding not serving notice period & getting absconded

Dear All,

I am currently working in a leading Pvt sector Bank.

As per my Appointment letter which I have signed during my joining the bank on 2008 it  has been mentioned as

Clause-11

- "In case you decide to leave the Bank's Services after confirmation, you will be required to give 90 days Notice.The bank in its sole discretion may decide to waive off / reduce the notice period depending upon the exigencies.In such cases, you have to pay to the bank the gross salary for the notice period so reduced or waived off."

Clause-12

"Joining Competitor:- In the event of termination of your services or your resignation from the service of the bank, you shall not join any banking or financial service company for a period of 6 months from the date of  termination / resignation".

 

Now I have got a government Financial Institution job & in which I have to join within 15 days. That means I will not be able to serve the notice period of 90 days. My current Employer is not ready release me before 90 days.

So If I am getting announced as absconded what will be the implication - the bank can only termionate me or can do anything else ? If they declare me as absconded then whether I will get the experience certificate or not ? Hopefully, for absconding employees, there will be no issue to get the Provident Fund amount.

(For Info, I don't have any bond for serving so many years like that & having also no dues like loans or other benefit from the Bank)..

My 2nd question is the Clause-12 is how much valid ? (For info the signing on appointment letter & related clause was taken on Bank letterhead copies & not on stamp papers..)....

Request your immediate views..



Learning

 4 Replies

Kumar Doab (FIN)     10 February 2013

Such matters are best resolved by applying rapport, goodwill and exceptional levels of persuasion, persistence, negotiation, reasoning skills while in employment.

Kindly consult elders in the family, competent and experienced well wishers, labor consultant, lawyer/law firm specializing in service matters and proceed under expert advice.

Given below is heart felt opinion only.

Some employees by the nature of their position, or rapport acquire some kind of handle on employer. If you have such a handle you may apply it and resolve the situation in your favor.

You are under probation or a confirmed employee?

You may go thru clause on probation/confirmation of service in your appointment letter/standing orders of the bank.

(a) Bank has stated in appointment letter issued to you that:

- there exits a clause on payment of penalty by way of notice pay in lieu of shortfall in notice period, however bank has stated that the bank reserves the right to accept or reject notice pay in lieu of notice period………..

As Bank has stated that notice period or notice pay is to be tendered employee can tender notice of resignation or notice pay in lieu of notice in case termination is initiated by employee. Likewise bank can tender notice of termination or notice pay in lieu of notice in case termination is initiated by bank.

Has the bank stated in appointment letter that it can terminate your service by issuing notice of termination or notice pay in lieu of it?

Has the bank mentioned that you that you also reserve the right to accept or reject notice pay in lieu of notice period, in case termination is initiated by bank?

If no, the bank can not adopt double standards. The contract of employment should be equitable.

 

-“The bank in its sole discretion may decide to waive off / reduce the notice period depending upon the exigencies. In such cases, you have to pay to the bank the gross salary for the notice period so reduced or waived off."”

It implies that if you have tendered a notice period of say 3 months bank can accept your resignation before the expiry of notice period and even in such a case you shall have to compensate the bank by tendering a payment of notice pay that too @ Gross pay.

This seems to be arbitrary, unreasonable……

The question arises: Is such a practice legal or is this practice illegal, unfair, bad, unethical…….and punishable????

Notice pay in lieu of shortfall in notice period is ideally Basic + DA .Employer encashes paid leave, disburses bonus, OT, Gratuity……on Basic + DA.

It is felt that if employee has tendered notice of resignation with notice period/effective date of resignation/last day in office mentioned in it, the resignation can not be accepted before expiry of notice period mentioned by employee.

 

Supreme Court of India

Nand Keshwar Prasad vs Indian Farmers Fertilizers .

 

(It is prerogative of employee if employee accepts the notice pay in lieu of notice period and resolves the matter amicably or does not agitate.)

 

The conditions in the letter of appointment issued to you are heavily tilted towards the bank and thus may not stand the test of law and bank may not be able to convince the court of law.

 

- Does your bank have employee’s union and are you a member of bank union or union for bank employees?

Does your bank have a “Woks committee”, “Grievance redressal committee”?

Does your bank negotiate the service conditions and have certified standing orders?

Service conditions are stated in standing orders of the company, appointment letter/contract of employment. If standing orders are applicable and extended to the designation of the employee the service conditions stated in standing orders can not be negated in appointment letter. If notice period is 1 month in standing orders bank should keep it as 3 months in appointment letter.

The employer should display standing orders near entry/gate on notice board (check and confirm) and provide certified copy of standing orders to employee against nominal charges say Rs.10/.

If standing orders are applicable but certified standing orders are not framed model standing orders should apply.

Model Standing Orders: 13.         Termination of employment

.--(1) For terminating employment of a permanent workmen, notice in writing shall be given either by the employer or the workmen - one month’s notice in the case of monthly-rated workmen and two weeks’ notice in the case of other workmen: one month’s or two week’s pay, as the case may be, may be paid in lieu of notice.

(So of you are a permanent employee notice period of one month or notice pay in lieu of it should apply.)

(2)     No temporary workman whether monthly-rated, weekly-rated or piece-rated and no probationer or badli shall be entitled  to any notice or  pay in lieu thereof if his services are terminated.

(So if you are probationer no notice period should be applicable.)

You may write to good offices of your appointing authority, MD, Chairman with a copy to Head-HR and request to supply you the certified copy of standing orders if these are framed or model standing orders as applicable to the bank and affirm to pay the amount of payment fixed by company and also service rule book for employees, HR policy, severance policy, exit policy etc…..

You may also add that bank should affirm in writing if no standing orders are applicable to it and your designation and you may proceed as per reply of the bank or if bank maintains a studied silence.

Banks are covered under SE Act and bank should display act near entry/gate on notice board (check and confirm).

e.g. SE Act Delhi:

2. Definitions: (5)  “commercial establishment” means any premises wherein any trade, business or profession or any work in connection with,….. and premises in which business of banking, insurance….

30.  NOTICE OF DISMISSAL:

 (2) No employee who has put in three months’ continuous service shall terminate his

employment unless he has given to his employer a notice of at least one month, in writing.

(Implying for service less than 3 month’s notice period/pay should not be applicable, and for service more than 3 months notice period/pay of 1 month is applicable.)

The Inspector/Chief Inspector can be approached for violation of rights. You may obtain the latest version from Dept. of labor website of your state or buy from market.

IESO Act, Model Standing Orders, SE Act may be available at the Dept. of Labor website of the state or the latest version can be bought from the market.

(b) What is the ground for inserting service agreement/non compete clause in appointment letter.

Has the company invested any amount on any specialized training adding to your specialized skill, qualification? Have you been privy to some critical/sensitive information?

It shall be appropriate to show the standing orders, appointment letter and all other relevant docs, email, records etc. to a competent and experienced labor consultant/service lawyer specializing in such matters.

In the meantime you may go thru the informative article at following link at LCI and attachments and you may find these useful.

https://www.lawyersclubindia.com/articles/Non-Compete-Clauses-and-The-Indian-Contract-Act-1972-4621.asp

The non compete/non disclosure clause may very well be enforceable during employment. But after separation it may be difficult to enforce.Let your lawyer opine on it.

Company may claim that you have accepted the clause on notice period, notice pay, service agreement/non compete clause and you are under contractual obligation of contract accepted by you to abide by these service conditions and there is nothing illegal in demand of the company.

Company may claim that Specific Relief Act is. You shall need to counter it. Your lawyer can help you can explain the merits to you in such a case.

Your lawyer may opine that Bank has crafted a contract contrary to provisions of the enactments and laws applicable to the bank and law of the land and contract crafted by the bank is void to that extent.

The rules/service conditions/contract of employment should not be inequitable, unconscionable, unenforceable, arbitrary, unlawful, illegal, void……….

Designation alone does not decide employee is a workman or not. Your lawyer may ask you a set of structured questions and may opine that you fall within the category of workman or you may get some relief under SE Act/IESO Act/ID Act or you may have to agitate in civil court.

(c) “So If I am getting announced as absconded what will be the implication - the bank can only termionate me or can do anything else ? If they declare me as absconded then whether I will get the experience certificate or not ? Hopefully, for absconding employees, there will be no issue to get the Provident Fund amount.”

“My 2nd question is the Clause-12 is how much valid ? (For info the signing on appointment letter & related clause was taken on Bank letterhead copies & not on stamp papers..)....”

PF can not be attached. It is felt that your bank might be having its own trust to manage the PF. You should obtain the bank rules/policies on PF in its printed form.

If bank has included Gratuity in CTC sheet issued to you may stake a claim for Gratuity (even if you have not completed 5 years) and submit FormI under proper acknowledgment.

If bank has Superannuation in addition to Gratuity you may obtain the copy of the policy and lay a claim to it.

Model Standing Orders:

16.  Certificate on termination of service.--Every permanent  workman shall be entitled to a service certificate at the time of his dismissal, discharge or retirement from service.

 

NOTE. - There is a provision under  this  Act for issuing a service certificate at the time of  dismissal, discharge or retirement and every person is entitled to take such certificate.

(So you should get service certificate on last day in office, within two days.)

In your notice of resignation (by redg. post under acknowledgment) you may mention effective date of resignation/last day in office and affirm that the notice pay (@ Basic + DA) may be adjusted in FNF statement, paid leave be encashed/Gratuity /reimbursements/incentives/performance pay etc be paid in FNF statement, and acknowledgment/acceptance of notice of resignation be issued and supplied to you immediately by redg. post, and acceptance of resignation, correct FNF statement, payment of FNF dues by bank DD only, Form 16 as per correct FNF statement, PF number, PF a/c slips for entire period of service, PF pass book, service/work experience certificate, relieving letter be supplied to you on your last day in office by hand/redg. post….You may add that you should be informed in writing by redg. post to whom you should handover the charge/company property and designated replacement be advice in writing with a copy to you to supply you the proper acknowledgment on the spot. You may add that routine duties may be assigned to you which can be completed within and up to your last day in office. You may add that you have completed all tasks on hand and nothing is pending at your end.

Relieving letter is issued post all settlements by employee. Post resignation you have to return the company property, tender notice pay. You may attach a list of payables by you to company and list of payables by company to you and conclude that after adjusting notice pay also company shall owe the amounts payable to you.

You may also conclude that after handing over the charge/company property/notice pay even if vide adjustment in FNF statement nothing is due at your end hence relieving letter can not be stopped.

Alternatively you can enclose the cheque/DD as acceptable to you, payable bank towards notice pay and enclose it with notice of resignation and demand that its acknowledgment by redg. post, be supplied to you. However in such a case company may not reduce the FNF dues by amount of notice pay and may issue you Form 16 as per PF statement (without reducing it by notice pay.) Thus you may be subjected to some higher tax. If your next employer is buying notice period you may be subjected to double taxation.

Your company may coerce/force you to fill and submit resignation by resignation tool and may issue date of relieving 3 month’s from date of relieving.

You may obtain screenshot of resignation tool and submit representations subsequent to your notice of resignation submitted by redg. post and counter that in case of termination initiated by you last day in office/date of retirement is to be issued by you and not by company.

As you are contemplating to resign and expecting a dispute you may submit all communication by letter thru redg. post and demand reply by letter thru redg. post only. You may mention that postage prepaid as (purchased from PO) self addressed envelop(s) are enclosed for sending reply/documents by redg. post only to you.

You may be subjected to a drill of interactions, denials, tantrums, negotiations, allegations; rejections etc….before the bank relents. Bank may become adamant and recalcitrant too.

Bank may yield to your representations, legal notice by your lawyer, demand notice issued by you, conciliation proceedings by ALC, notice by Inspector under SE act….or Bank may become adamant and recalcitrant too, and you may have to agitate in appropriate forum.

Remain vigilant and do not leave any room for the bank to charge you on any count.

Although bank is custodian of records (including your official email id) later it may not provide copy of any record/document to you and may not even submit record which could be detrimental to it even in court of law. Hence keep copies of all relevant documents in your file.

You can be declared absconding if you have disappeared/out of contact/can not be approached………If you are replying to the bank and remain in touch with the bank how you can be declared absconding. Hence keep proof of dispatch, delivery of each correspondence, and deny that you are absconding.

Record the transactions (audio/visual) for appropriate use in appropriate forum at appropriate time.

Your lawyer may opine that "Absconding" is derogatory and objectionable.

The bank should issue notices, advt. in paper, before it declares you absconding and decides to terminate and thus adheres to principle of natural justice.

However who can stop an unscrupulous, adamant, recalcitrant employer from violation of rules and rights.

Bank may turn vindictive and may post adverse comments in your personnel file and reference checks if any. However bank and its personnel shall have to face the consequences and implications if employee is properly informed and determined.

At a suitable time you may request in writing under acknowledgment, the good offices to let you examine your personnel file maintained by it.

Inspector under SE Act can summon the records from company.

33.    RECORDS

35.  INSPECTION OF REGISTERS AND CALLING FOR INFORMATION.

37.  POWERS AND DUTIES OF INSPECTOR.

41.  WILFULLY MAKING FALSE ENTRIES

43.  DETERMINATION OF EMPLOYER FOR THE PURPOSE OF THIS ACT.

(It is felt that in case of HDFC bank it is Regional Manager and a notice to this effect is displayed in the bank. Hence you may include this man in your representations and notices.)

You can obtain from Inspector or adopt RTI route.

Abandonment: Bank may claim that you have abandoned the employment however if you have everything on record in writing bank may not succeed.

If you are expecting harassment, exploitation, damage it shall be appropriate to approach your lawyer and prepare well so that you are not adversely affected.

You may go thru other highly informative threads initiated by employees at LCI e.g.:

 

https://www.lawyersclubindia.com/forum/today_topic_post.asp#.UOLrc_LZ1JI

Valuable advice of learned experts/members is sought.

 


Attached File : 821672949 delhi shops & establishments act, 1954.pdf, 821672949 model%20standing%20orders.doc, 821672949 background paper.pdf downloaded: 315 times
1 Like

Kumar Doab (FIN)     11 February 2013

Kindly read:

-- “If notice period is 1 month in standing orders bank should keep it as 3 months in appointment letter.”

As

“If notice period is 1 month in standing orders bank should not keep it as 3 months in appointment letter.”

--“ However in such a case company may not reduce the FNF dues by amount of notice pay and may issue you Form 16 as per PF statement (without reducing it by notice pay.)”

As

“However in such a case company may not reduce the FNF dues by amount of notice pay and may issue you Form 16 as per FNF statement (without reducing it by notice pay.)”

 Oversight is regretted.

 

 

RCB (Software Engineer)     13 February 2013

Dear Kumar Sir,

I am a sofware Professional. My company did not issue me the Experience Letter soon after leaving the job and they did make me to wait till the FNF Settlement to get the experience letter. The wait was for about three months and after loads of arguments they issued me an adverse Experience Letter by bringing a special clause in my Experience Letter "Unsatisfactory Behaviour"...They have also deducted notice period payout in my FNF...

Is the law points that you have mentioned above is applicable to Software Companies, who always harrass its employees with Notice Period, Notice Period Payout and Experience Letter?

Thanks for your help.

Kumar Doab (FIN)     13 February 2013

You have posted that:

--“My company did not issue me the Experience Letter soon after leaving the job and they did make me to wait till the FNF Settlement to get the experience letter. The wait was for about three months”

Service conditions are stated in standing orders of the company, appointment letter/contract of employment. If standing orders are applicable and extended to the designation of the employee the service conditions stated in standing orders can not be negated in appointment letter. If notice period is 1 month in standing orders bank should keep it as 3 months in appointment letter.The employer should display standing orders near entry/gate on notice board (check and confirm) and provide certified copy of standing orders to employee against nominal charges say Rs.10/.If standing orders are applicable but certified standing orders are not framed model standing orders should apply.

 

Some states had granted blanket exemption from the provisions of IESO Act to the IT companies. It is felt that some states did not. ( Yu may check the situation in your state.)

State of Karnataka has ended the blanket exemption granted earlier by it and thus all IT companies should have framed certified standing orders within 6 months. Till the certified standing orders are framed model standing orders should apply.

 

If standing orders were applicable to your company and you, you may refer to clauses e.g.

Model Standing Orders: 13. Termination of employment,  14.      Disciplinary action for misconduct.,  15.        Complaints., --16.        Certificate on termination of service.-, 17.    Liability of 17[employer].-- 18.           Exhibition of standing orders.--

The payment of wages and certificate of service should have been supplied to employee on last day in office or within two days.

 

SE Act is applicable to the IT companies. (You may refer to the SE Act applicable to your state.)

E.g. SE Act Delhi : Clauses :

2. Definitions. : (30)  “wages” means wages as defined in section 2 of the Minimum Wages Act, 1948 (11 of

1948);

3. Rights and privileges under other law,  etc., not affected.—Nothing in this Act shall affect any rights or privileges which an  employee in any establishment is entitled to at the date this Act comes into force or under any other law, contract, custom or usage applicable to such establishment or an award, settlement or agreement binding on the employer and the employee in such establishment, if such rights or privileges are more favourable to him than those to which he would be entitled under this Act.

19.  TIME AND CONDITIONS OF PAYMENT OF WAGES.

20.  DEDUCTIONS WHICH MAY BE MADE FROM WAGES.

21.  CLAIMS RELATING TO WAGES.

30.  NOTICE OF DISMISSAL:

COMMENTS

(c) Acts and omissions constituting misconduct :

For the purpose of section 30, for the term, “misconduct” reference be made to Rule 13 of the Delhi Shops and Establishments Rules but the list is not exhaustive in view of the word ‘includes

33.    RECORDS

35.  INSPECTION OF REGISTERS AND CALLING FOR INFORMATION.

37.  POWERS AND DUTIES OF INSPECTOR.

COMMENTS

(b) Duties of the Inspector :

(h)  that the wages and other dues are being paid to employees in time as required under the Act;

(i)  that in dispensing with the services of an employee the provision of the Act and Rules have been complied with and no  dues payable under the Act or Rules have been withheld;

 

41.  WILFULLY MAKING FALSE ENTRIES

43.  DETERMINATION OF EMPLOYER FOR THE PURPOSE OF THIS ACT.

 

Then Payment of Wages Act is applicable:

THE PAYMENT OF WAGES ACT, 1936

2. Definitions.-

3*[(vi) "wages" means

 (d) any sum which by reason of the termination of employment of the person employed is payable under any law, contract or instrument which provides for the payment of such sum, whether with or without deductions, but does not provide for the time within which the payment is to be made;

The date, period and time for payment for payment of wages is well explained in IESO Act, Model Standing Orders, SE Act, THE PAYMENT OF WAGES ACT, 1936…….

The 3 months time taken by your company may be declared unreasonable and you may approach your lawyer to understand the merits and proceed under expert advice.

--“ The wait was for about three months and after loads of arguments they issued me an adverse Experience Letter by bringing a special clause in my Experience Letter "Unsatisfactory Behaviour"...They have also deducted notice period payout in my FNF...”

Apparently the approach of the concerned company personnel in chair was vindictive, zealous, and it appears the decision taken is with grudge and there seems to be a willful and intentional approach to damage future employability, prospects and career of employee.

Such individuals are not fit to be left to loose around in civilized society.

Company should have given fair opportunity been it minor or major misconduct before declaring and then stating "Unsatisfactory Behaviour" in a document which future employers shall demand to see and employee shall have to show to be eligible to get employed.

Refer to procedure and process as per :

(SE Act : 30.  NOTICE OF DISMISSAL:,

Model Standing Orders: 14. Disciplinary action for misconduct.,)

Moreover it is felt that the format for certificate of service (or work experience certificate) does not contain column on conduct. It simply states Name, location, designation, period of service…..

Such unscrupulous employers and HR personnel innovate and invent tactics and techniques to circumvent the Acts, Laws…….and devise their own formats….

The idea lurking in wicked mind is to stand on the toes of employee and send tremors for other employees so that employees can be driven like goats and sheep.

It is vaguely remembered that in some thread initiated by you had mentioned that this offender in HR had stated that your conduct after resigning was not good, Or suitable to his taste.

To service his own ego he has inserted damaging comments in work experience certificate for the period of employment.

While during period of employment apparently no stinker, show cause notice, comments for any episode of "Unsatisfactory Behaviour" was issued and supplied to you.

  Is the above correct.
if yes you need the counsel and support of a competent and smart lawyer to charge this offender and appointing authority, MD, CEO, Chairman, HR Head, to their knees and thus call back the adverse comments and issue you the service certificate with good comments ( avoid without comments).

You should demand that god offices should let you examine your personnel file maintained at HO.

The Inspector Under SE Act  can call for records,

33.    RECORDS

35.  INSPECTION OF REGISTERS AND CALLING FOR INFORMATION

            41.  WILFULLY MAKING FALSE ENTRIES

And thus can be obtained thru RTI by you from Inspector or your lawyer may call for the records in court of law.

If you did not serve full notice period notice period as per provisions in standing orders and appointment letter can be adjusted in FNF statement/settlement.

However it should be @ Basic + DA as employer disburses Bonus, Gratuity, leave encashment, OT at his rate.

Designation alone does not decide employee is a workman or not. Your lawyer may ask you a set of structured questions and may opine that you fall within the category of workman or you may get some relief under SE Act/IESO Act/ID Act or you may have to agitate in civil court.

 

 

 


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