Dear Seniors,
I was working with ITC Ltd. - Hotels division and recently quit my job. I had signed a Service Agreement on a Non-judicial stamp paper with the Company in Aug 2012 for 3 years (1 year of training and 2 years of service) for INR 5.34 lacs excluding interest.
I worked at the firm for 2.5 years exactly and quit my job after serving a notice period of full 3 months and signed off my handover. I left the Company 6 months prior to the date of Agreement expiry.
I had also given my Exit Interview in which I had cited the reason for resignation as \"Lack of congenial work environment\", \"Poor work-life balance\" and \"Higher Studies\".
My salary and all dues have been cleared by the Company. However, I have now received a letter from the Advocate of ITC Ltd. asking me to pay up the entire INR 5.34 lacs + INR 1.05 lacs interest.
Can somebody please advise on the validity of this letter? When I had joined the Company, I was told that the working hours will be from 9am-6pm, though I was made to do overtime everyday amounting to 11- 13 hours daily. This is the reason I had given a premature resignation and decided to pursue higher studies.
This reason was also given very clearly during my Exit Interview, the document of which remains with ITC.
Please advise on the implications of the letter and further action to be taken from my end. I have been asked to pay up within 15 days (letter dt. 20 April 2015)
Also, what does Agreement on a Non-judicial stamp paper signify?
From India, Moradabad
1I was working with ITC Ltd. - Hotels division and recently quit my job. I had signed a Service Agreement on a Non-judicial stamp paper with the Company in Aug 2012 for 3 years (1 year of training and 2 years of service) for INR 5.34 lacs excluding interest.
I worked at the firm for 2.5 years exactly and quit my job after serving a notice period of full 3 months and signed off my handover. I left the Company 6 months prior to the date of Agreement expiry.
I had also given my Exit Interview in which I had cited the reason for resignation as \"Lack of congenial work environment\", \"Poor work-life balance\" and \"Higher Studies\".
My salary and all dues have been cleared by the Company. However, I have now received a letter from the Advocate of ITC Ltd. asking me to pay up the entire INR 5.34 lacs + INR 1.05 lacs interest.
Can somebody please advise on the validity of this letter? When I had joined the Company, I was told that the working hours will be from 9am-6pm, though I was made to do overtime everyday amounting to 11- 13 hours daily. This is the reason I had given a premature resignation and decided to pursue higher studies.
This reason was also given very clearly during my Exit Interview, the document of which remains with ITC.
Please advise on the implications of the letter and further action to be taken from my end. I have been asked to pay up within 15 days (letter dt. 20 April 2015)
Also, what does Agreement on a Non-judicial stamp paper signify?
From India, Moradabad
You decided to quit for mainly higher education and other causes.
What all terms and conditions do your employment letter impose?
I am sure the letter would speak about notice pay,probation period,notice period.
If it goes into legal battle the court may ask you to pay but probably not the whole amount.
Did you bring to notice of company regarding non congenial work environment or about daily over time?
Was any of this communication in writing?
You ave a legal battle ahead if the company really presses on with their demand.
From India, Pune
What all terms and conditions do your employment letter impose?
I am sure the letter would speak about notice pay,probation period,notice period.
If it goes into legal battle the court may ask you to pay but probably not the whole amount.
Did you bring to notice of company regarding non congenial work environment or about daily over time?
Was any of this communication in writing?
You ave a legal battle ahead if the company really presses on with their demand.
From India, Pune
Dear Friend,
You have well served, after training period you did serve for 1.5 years, also, you have served three months notice period got settlement in a proper way. Let what ever be the agreement, you resignation was for higher studies, poor working conditions .. during the resignation the authorities should have looked into by good notification or good for remaining service period or agreement period. Please go through the agreement again whether there is any clause mentioned that the entire amount is required to be paid before resignation or quitting of service in own interest. In the absence of the clause the legal authorities cannot do more damage to you, even if it exist you may be asked to pay the balance amount for the rest unserved position, or three months salary else otherwise they may claim. Since, even though you did quit the service by giving proper letter, it was due to poor work-life balance too involved you can withstand your claim of resignation in confidence and the organisation (ITC) have to answer for the poor performance. Give a appropriate/suitable reply to the legal cell of the company.
best of luck .........Fear not for those who comply to the procedure ....They bound to fall apart ....
From India, Arcot
You have well served, after training period you did serve for 1.5 years, also, you have served three months notice period got settlement in a proper way. Let what ever be the agreement, you resignation was for higher studies, poor working conditions .. during the resignation the authorities should have looked into by good notification or good for remaining service period or agreement period. Please go through the agreement again whether there is any clause mentioned that the entire amount is required to be paid before resignation or quitting of service in own interest. In the absence of the clause the legal authorities cannot do more damage to you, even if it exist you may be asked to pay the balance amount for the rest unserved position, or three months salary else otherwise they may claim. Since, even though you did quit the service by giving proper letter, it was due to poor work-life balance too involved you can withstand your claim of resignation in confidence and the organisation (ITC) have to answer for the poor performance. Give a appropriate/suitable reply to the legal cell of the company.
best of luck .........Fear not for those who comply to the procedure ....They bound to fall apart ....
From India, Arcot
As told by you under the contract the working hours were to be from 9am-6pm, though you were made to do overtime everyday amounting to 11- 13 hours daily. If you have proof of this then if the employer has paid you overtime, it has violated the material part of contract of service and thus no compensation is payable to the employer. Furthermore you are not liable to pay the amount demanded by the employer. You may like to read the thread "Need to get relieving or service certificate without paying bond money" referring to some relevant legal provisions.
Thanks
Sushil
From India, New Delhi
Thanks
Sushil
From India, New Delhi
ITC is a well respected and known company.
Their appointment letters would have covered extra working hours as they are in service industry also.
If contract says 9am -6PM it does not mean that extra working hours is not permitted or employee cannot be asked to work extra.
As long as employee is compensated for extra work,there is no issue.
Secondly the employee found extra hours difficult because he was doing higher studies.
No employer will bother about employee higher study requirement if it clashes with work requirement.
Proof on non congenial atmosphere is difficult to obtain.
Did employee bring instances of non congenial atmosphere to notice of management??
Work life balance is a personal way of looking at things.
If one is not happy with work life balance he should quit,because life in competitive private sector is tough.
In my opinion this case is not an open and shut case,
He may well land up paying bond money in part at least if it heads for court battle.
(Though off course personally I wish he does not have to face court battles or payment of any bond money.)
From India, Pune
Their appointment letters would have covered extra working hours as they are in service industry also.
If contract says 9am -6PM it does not mean that extra working hours is not permitted or employee cannot be asked to work extra.
As long as employee is compensated for extra work,there is no issue.
Secondly the employee found extra hours difficult because he was doing higher studies.
No employer will bother about employee higher study requirement if it clashes with work requirement.
Proof on non congenial atmosphere is difficult to obtain.
Did employee bring instances of non congenial atmosphere to notice of management??
Work life balance is a personal way of looking at things.
If one is not happy with work life balance he should quit,because life in competitive private sector is tough.
In my opinion this case is not an open and shut case,
He may well land up paying bond money in part at least if it heads for court battle.
(Though off course personally I wish he does not have to face court battles or payment of any bond money.)
From India, Pune
Action on behalf of company asking for full payment and interest despite having done full and final settlement, shows that reputed or unreputed company makes no difference. On the legal floor, whether atmosphere was congenial or not or he has to go for higher studies is also insignificant. What will be seen is in the light of legal provisions who has defaulted and whether compensation can be recovered. The queriest should not have named the company. If he would have been paid overtime then he would not have felt frustated. Now since notice has been received by him, he can at least refer to defences stated in the earlier stated thread.
Thanks
Sushil
From India, New Delhi
Thanks
Sushil
From India, New Delhi
My point is will the queriest fight legal battle or look around for another job?
Whether he got over time or not or was he in a position that he was not entitled to OT is not known to us.
The company was legally bound to pay and do full and final settlement and it has followed the law.
Now they have decided to enforce the service agreement which was knowingly and voluntarily signed by employee.
Prima facie the employee is liable to pay as per bond.
Only the Honble Court can decide whether Rs 5 lakhs+ interest of 1L is reasonable or excessive.
From India, Pune
Whether he got over time or not or was he in a position that he was not entitled to OT is not known to us.
The company was legally bound to pay and do full and final settlement and it has followed the law.
Now they have decided to enforce the service agreement which was knowingly and voluntarily signed by employee.
Prima facie the employee is liable to pay as per bond.
Only the Honble Court can decide whether Rs 5 lakhs+ interest of 1L is reasonable or excessive.
From India, Pune
Some case laws which may be of interest: Fertiliser and Chemical Travancore Ltd. v. Ajay Kumar and others, 1990 LLR 711 Toshnial Brothers (Pvt.) Ltd. v. E. Eswarprasad & Ors., 1997 LLR 500
From India, Pune
From India, Pune
No doubt in these decisions the effect of breach of contract and bond has been discussed whereby the full amount claimed is not payable but only the reasonable proportionate amount incurred on training etc will be payable which I had also pointed out in my earlier stated thread. But what I have tried to further submit is that the effect of provisions of Shops and Establishment Act, Payment of Wages Act and ID Act has not been argued nor referred to in those decisions. Thus it can be argued that these decision are per incuriam and thus not binding. These enactments are enacted subsequent to the Indian Contract Act and supersede the provisions of sections 73 and 74 of the Contract Act. The bond amount will not be deductible or payable from wages of employee or workman.
Thanks
Sushil
From India, New Delhi
Thanks
Sushil
From India, New Delhi
Community Support and Knowledge-base on business, career and organisational prospects and issues - Register and Log In to CiteHR and post your query, download formats and be part of a fostered community of professionals.
Resignation Letter.jpg
Resignation cum relieving letter.doc