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kumar (xxx)     15 April 2011

Action against Top IT Company

Hi,

I would like to know from the experts of this forum, what kind of action can be taken against a top IT gaint in India.This company is very large conglomerate. They recruit many people( freshers / experienced ) and they send many people overseas to handle their client projects based on their client's request and not based on the employee's decision.

All the employee who go for overseas has to sign an overseas agreement on a stamp paper. Most of time this happens at the last minute and the company always states to the employees as ' it's just a formality'. This agreement is also signed by an sureity person. Most of the time it will be another employee signing for his friend or a family member  signing for his son/daughter. This a legal document but the terms and considtions of this document is not explained to the employees.

Once the employee reaches onsite he has to perform various tasks. Example: If the employee is a developer apart from his development at client place he/she should do 1. project management 2. recruitment 3. sales 4. onsite / offshore management 5. satisfy clients etc. 6. bring new openings etc.

All these employees work close to 12/14 hrs day and they work during odd hours / national / festival holidays  whereas their overseas counterparts( external consultants) work for 8 hrs and get good salary. No promotions or hikes available for these employees.

Once the employee decides to quit, the company gives 2 options for the employee.

1. Go back to India and serve 3 months as per the service agreement.
2. Pay the liquidated damage as per the overseas agreement.

Option1 : Employee is having a family and their kids are going to school. How come they can go back to India in the middle of the year and serve 3 months?

Option2 : This liquidated damage amount is not mentioned in the overseas agreeement. Also the employee is not gone for training he/she is working at overseas and the company is making huge profit from this person any pay them very less salary.

Since both the options are not favourable to the employee he/she moves out silently. This company take that as an advantage and they do not provide any experience certificate or PF back to the employees.

Once the employee is gone every year this company send letters to the employee or the sureity person asking them a huge amount as liquidated damages and only then they can perform full and final settlement. .

Each letter states different amounts and classification is such as notice pay recovery, forex charges and adminstartion charges etc. Also they add xx% interest on the liquidated damage amount for the employee resignation date. 

According to my understanding,

1. If a person resigns and cannot server adequate notice period. He/she must pay the notice pay recovery amount which will be 3 months basic + DA.

2. If the employee resigns the company should provide all the experience certificate and if their is breach it must be handled separately.

Whereas this firm is asking for huge amount. Assume that If the employee's yearly salary is 10 lakhs the liquidated damage amount is 6 lakhs.

Could someone explain me whether we can take any legal action against this company.

Regards

Kumar



 5 Replies

Kumar Doab (FIN)     15 April 2011

Wise people have said: Solution lies in the problem itself.

1. Don't act in haste. Don't be desperate for job. Before you sign on the dotted line, consult your family, well wishers, experienced and competent people in your acquaintance, competent lawyer/law firm. It is better to avoid trouble in the beginning than to repent later. Don't be daring and adventurous in your line of business.

Know your lawful rights. Be polite, gentle, persuasive, and firm.

2. It is better to retain a lawyer. The retention fee shall cost less than loss that one may suffer. When you know you are in a business where there are legal traps, and you shall get trapped, in the end you shall have to seek counsel. 

3. Contracts of employment, offer letters, appointment letters, agreements etc, have become work of craft.

They are crafted by the master craftsman. Like any other employee they also have set objectives to deliver.

Work of craft is always understood with patience, and lot of time needs to be devoted. Show these documents to one who understands the nuances of this craft and obtain proper advice, before you jump for it.

4. Never agree to make the family or another employee a surety. Why they should get trapped in legal traps along with you.

5. The terms and conditions should be understood by the person who has to agree to it. It is his duty, even if it is seen at the last minute. While the offer is made, verbally or in writing, submit a letter under proper receipt that all terms and conditions may be supplied so as to reach me at least 10 days in advance.

The person who has prepared a heavily weighed agreement shall not explain it. Hence the statement “It is just a formality.” Be smart, gentle, and polite. Learn to negotiate. If you have the skill, you shall be in demand. Keep on adding to your qualifications, knowledge, and skill. Stay ahead.

Learn to say NO. There are books on “How to say NO" " Learn to say NO"

In today’s business climate companies do not marry employees and vice versa.

6. Read the contract carefully and it should be clear what you shall do, in your assignment. If you agree you shall have to do it. You are safe if you object before you sign.

7. Record in writing and keep written record, form what time to what time you had to work everyday, and on which national , festival, holiday, you worked. Be smart and ensure you get instruction, to work on these days.

Ask for wages.

8. A professional company shall give hike, even if moderate.

9. You shall have only those options which are in your contract of employment.

10. Maintain records in proper manner, since you shall have to prove that you were not imparted any training, hence no training expenses.

11. Salary is described in appointment letter. If it is less, say NO. By now you would have started to learn how to say NO.

A bird in hand is better than two in bush. Once the dispute has started and you end up paying 6 lacks out of 10 lacks you are better at home with a CTC of Rs. 5 lacks.

12. PF can not be with held. If the employer does not endorse the forms, visit the office of PF commissioner and submit the form attested by say bank Manager and if you want lodge complaint www.epfindia.gov.in

Maintain records and be careful, if you work for % years or more employers should not able to prove you caused willful loss and block your gratuity.

13. Once you agree record and maintain copies of each expense, including air tickets, visa, visa fee, and airport pick ups ... everything and anything. You may need them later. Ask them to supply you detailed expenses in occurred.

14. If you agree to certain charges, % interest, etc and sign a pronote, you have agreed.

Form a union, internal counsel, and get affiliations and patronage of good and mighty people, who shall represent you and amplify your voice. Healthcare industry, got together, struggled, fought, and they obtained what is now called as “Sales Promotion Act"

Employees in your industry can also seek remedy to the exploitation you are facing.

If you have some serious trouble, go to a competent lawyer/law firm with what soever records you have, they shall defend you.

 

P.K.Murali (Advocate)     16 April 2011

Did you receive any such demand from your employer? If so, don't worry. First gather the followings:

Appointment letter, confirmation letter, service agreement copy and overseas agreement copy.

Your work assignment for overseas in writing.

Is there anything in writing about the two options given at your overseas site. If so, take a copy.

 your demand letter speaks more. Leave a copy of demand letter to your lawyer.  Gather each and every micro detail with material evidence about your job and how sincerely you worked hard and how you have been cheated.  Gathering every material evidence from your employer, will be helpful to you in winning this false claim.

if any of these above said copies not available with you, Please gather the same through RTI application via through concerned government authorities.  A lawyer will do this job neatly.

Finally, This is an excellent case for legal battle to a lawyer, who loves challenges. I mean, consult an experienced lawyer.

kumar (xxx)     16 April 2011

Hi Murali,

Thank you, for your reply. I have already replied to the employer with a help of a lawyer and waiting for their reply.

Meanwhile I would like to know whether this company can claim 20% interest on the breach amount from the date of breach. Do we have any clause in labor law that states how much interest can be charged against ex employee who has left  the firm many years back.

As you have mentioned I am not having all the copies of the agreement and hence I may need to use RTI to get the relvant copies. The case is not yet filed in any court.

But I see that this company had filed around 400 cases in India against ex employees. Most of the case status states'case disposed' and nature of disposal is'otherwise' and hence I can't find any judgements or orders against those cases.

Regards

Kumar

kumar (xxx)     16 April 2011

Hi Kumar Doab,

 

Thank you, for providing the information and wise advice. Next time I will make sure I get a legal opinion before I sign any agreements.

But in general even though we are educated and well experienced when it comes to this kind of agreements the employees does not give much importance. The reason for this is at that point in time these employees does not have any plans / circumstances to leave the employer at overseas. When things go wrong not as expected employees quit the organization. Most of us give reasonable notice and train the replacement person.

But the employer is taking this agreement and demanding for money which I feel is very bad. If there is a breach of agreement the damage amount should be an acceptable amount. You cannot ask 60-70% of your yearly salary from an employee. I believe ethically this is very wrong.

Regards

Kumar

Kumar Doab (FIN)     16 April 2011

 One should not get lured by the offer of foreign pastures. Though one may not have a plan to leave the overseas job, but one should always keep in mind the circumstances may become compelling.

If one has given reasonable notice and trained the replacement person, obtain and secure a written letter to this effect from the new incumbent and reporting authority/company. The documents should be secured and preserved like the precious items.

The offer letter, appointment letter, agreement etc should be thoroughly examined, word by word and its legal interpretations and implications be sought, from experienced and competent persons preferably a lawyer. If there is dispute documents shall be required to contest.

The aggrieved employee can always protest the unfair practices and denial of natural justice.

Try and form a union, retain a lawyer, and obtain the counsel of competent lawyer/law firm.

For your present problem, proceed as advised by learned Mr. P.K.Murali.

 

 


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