I work for an employer and have been with them for the last 3 years. They asked us to sign an employment service agreement which states that we cannot resign within 2 years of employment. If we do resign, then we are required to pay them 3 months' salary. They have taken post-dated blank cheques from us.
It's almost going to be 3 years of service this August. I aspire to move or relocate to Canada and have been attending interviews with a few lined up.
I want to officially resign, but currently, it's uncertain as I don't have a job secured yet. I want to understand the legal implications and what actions I may have to face if I resign with a one-month notice period, in case I secure a job in Canada. I am planning to visit Canada in July 2023 and have already taken official leave for 20 days.
From India, Mumbai
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It's almost going to be 3 years of service this August. I aspire to move or relocate to Canada and have been attending interviews with a few lined up.
I want to officially resign, but currently, it's uncertain as I don't have a job secured yet. I want to understand the legal implications and what actions I may have to face if I resign with a one-month notice period, in case I secure a job in Canada. I am planning to visit Canada in July 2023 and have already taken official leave for 20 days.
From India, Mumbai
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You have been working with this company for the last three years. Your contract of employment stipulates that you should not leave the company in 2 years. If you resign within 2 years, you will have to pay 3 months' salary. I am afraid, how do these conditions apply to you because you have already crossed the mandatory service of two years?
A condition of service that you should not leave in 2 years is illegal, but there can be a notice period enforceable by law. Though no employer may go for a legal fight with an employee leaving, you cannot overrule the possibility of your background verification/exit formalities going negative once you decide to leave. Therefore, it is always good if you leave on good terms only. Anyway, since you have started your search for a Canadian assignment, go ahead with it.
From India, Kannur
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4769A condition of service that you should not leave in 2 years is illegal, but there can be a notice period enforceable by law. Though no employer may go for a legal fight with an employee leaving, you cannot overrule the possibility of your background verification/exit formalities going negative once you decide to leave. Therefore, it is always good if you leave on good terms only. Anyway, since you have started your search for a Canadian assignment, go ahead with it.
From India, Kannur
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Hi,
Wherever possible, try to get relieved properly. As you claim you are about to complete 3 years, discuss with your employer. Most likely, they will agree to a proper relieving process as you are nearing 3 years. Also, before you leave, please collect the 3 undated cheques, which are very important. We don't know the background of the service agreement you entered into and what type of supporting document you provided along with the undated cheques. Whether the service agreement or the submission of undated cheques is legal or illegal is secondary, but the employer can harass you by depositing the cheques with the bank, knowing that they will be dishonored. Therefore, please exercise utmost caution.
From India, Madras
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Wherever possible, try to get relieved properly. As you claim you are about to complete 3 years, discuss with your employer. Most likely, they will agree to a proper relieving process as you are nearing 3 years. Also, before you leave, please collect the 3 undated cheques, which are very important. We don't know the background of the service agreement you entered into and what type of supporting document you provided along with the undated cheques. Whether the service agreement or the submission of undated cheques is legal or illegal is secondary, but the employer can harass you by depositing the cheques with the bank, knowing that they will be dishonored. Therefore, please exercise utmost caution.
From India, Madras
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Thank you for the comments. I really appreciate it. I am also eligible for incentives earned for the last financial year, which is a pretty decent amount. Usually, they disburse this during July or August. It is the same time I am leaving for Canada. If required, I can share a copy of the agreement in this thread, which can give you an idea.
From India, Mumbai
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From India, Mumbai
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Can you please advise if they can hold my incentive or adjust it against the salary in case I don't serve the notice period during resignation? Is it a breach of law, and if so, are there any serious consequences?
From India, Mumbai
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From India, Mumbai
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Incentives as a part of service conditions cannot be forfeited unless there is a valid reason. In some cases, it will be specifically written that the incentive is payable to those who remain in service. This serves as an incentive to stay with the company and, therefore, can be forfeited if you are not in service at the time of its disbursement.
In the case of a workman category employee, they will receive the protection of the law and can approach the appropriate authority. However, in all other cases, the employer's decision will be final, and it cannot be challenged in any dispute redressal machinery such as a Labour Officer, Labour Court, or Tribunal. Therefore, this matter should be handled very carefully with patience. Only an amicable settlement will yield the expected results. With quantifiable performance in hand, you can rightfully demand the incentive.
From India, Kannur
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In the case of a workman category employee, they will receive the protection of the law and can approach the appropriate authority. However, in all other cases, the employer's decision will be final, and it cannot be challenged in any dispute redressal machinery such as a Labour Officer, Labour Court, or Tribunal. Therefore, this matter should be handled very carefully with patience. Only an amicable settlement will yield the expected results. With quantifiable performance in hand, you can rightfully demand the incentive.
From India, Kannur
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Hi,
Adding to the valid points shared by Mr. Madhu, unlike abroad, Indian employers, especially small and mid-size employers, pay less attention/importance to labor laws until things get legally complicated. Whatever good services are rendered by the employee, irrespective of the number of years contributed, once an employee submits their resignation, employers tend to develop some sort of resentment against the employee (I am not generalizing all employers - exceptions are always there). In such a scenario, expecting benefits like incentives that were not part of the salary, even without completing the proper notice period, will be a case of uncertainty. It depends on the employer.
One thing I just want to ask you, when you know that your employer will disburse incentives in the next couple of months, why do you want to make a hasty move now? If you haven't submitted the resignation and you have time for relocation to Canada, why not wait for a couple of months so that you will receive the benefits and also complete your agreement period. Just my suggestion. Based on your comfort, you need to make the decision.
From India, Madras
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Adding to the valid points shared by Mr. Madhu, unlike abroad, Indian employers, especially small and mid-size employers, pay less attention/importance to labor laws until things get legally complicated. Whatever good services are rendered by the employee, irrespective of the number of years contributed, once an employee submits their resignation, employers tend to develop some sort of resentment against the employee (I am not generalizing all employers - exceptions are always there). In such a scenario, expecting benefits like incentives that were not part of the salary, even without completing the proper notice period, will be a case of uncertainty. It depends on the employer.
One thing I just want to ask you, when you know that your employer will disburse incentives in the next couple of months, why do you want to make a hasty move now? If you haven't submitted the resignation and you have time for relocation to Canada, why not wait for a couple of months so that you will receive the benefits and also complete your agreement period. Just my suggestion. Based on your comfort, you need to make the decision.
From India, Madras
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