---It is felt that you have not entered into any agreement with your company to work for a specific period and you are not leaving before completing this period.
Generically speaking the question you have raised is as simple as “can you continue to work in the same segment with another employer after you resign from current employer i.e. post termination of contact of employment.”
The answer as per various publications and court judgments can be a confident Yes.
However let a competent and experienced labor consultant/service lawyer well versed with such matters look into the documents and your inputs on the matter and opine finally. Let your lawer evaluate the merits in clauses on the Non-compete/Non-solicitation/Non-disclosure/Protection of Confidential information under Indian IPR laws……etc in your appointment letter/contact of employment and thereafter you may proceed under expert advice of your lawyer labor consultant/service lawyer.
Are you privy to your employer’s sensitive, proprietary, confidential information?
Is the works, processes, tasks, assignments, projects …………(what not and whatever) carried out by you on day to day basis or till date patented by employer or invented by your employer or the techniques being used by you are innovation of your employer?
Are you handling any trade secrets, business, secrets, business connections of your employer? Also the clients being handled by you are brought to your company by you or passed on to you by promoters of the company? Are these clients/business connections handled, nurtured, cultivated, converted by you or by promoters of the company?
What loss your company shall face if you leave them and join another company in the same segment?
If you are working with some technology say DOT SPHERE now for current employer and you may work with same DOT SPHERE later for next employer would it amount to divulgence of trade secrets?
The answer seems to be NO. However you may keep your well thought answers ready; your responses shall be your defense.
Kindly take precautions and do not share any information in writing which might be termed sensitive, confidential for current employer and it may pounce on the opportunity to trouble you.
As per various publications various courts in India and Supreme Court have ruled that:
“the non-compete covenants used in agreements can be categorized into in term and post term covenants. In an employment contract, the basic interests of the employer which are required to be protected include trade secrets and business connections and other such confidential information. In case of restraints in contracts of employment the nature of business and employment is relevant in assessing the reasonableness of restraints. An employee owes a duty to the employer to not disclose to others or use to his own advantage the trade secrets or confidential information which he had access to during the course of employment and he could be restrained from or sued for divulging or utilizing any such information in his new employment. But once again, he cannot be prevented from taking up the employment. Also, the employer cannot prevent the use of employee’s knowledge, skill or experience even if the same is acquired during the course of employment. Restrictive covenants are different in cases where the restriction is to apply during the period after termination of the contract than in those cases where it is to operate during the period of the contract.
Negative covenants operative during the period of contract of employment when the employee is bound to serve the employer exclusively are generally not regarded as restraint of trade and do not fall under Section 27 of the Indian Contract Act,1872. A negative covenant, one that the employee would not engage himself in a trade or business or would not get employment under any other employer for whom he/she would perform similar or substantially similar duties, is not a restraint of trade unless the contract is unconscionable or excessively harsh or unreasonable or one sided”
“the principles embodied in Section 27 of the Act and the individual's fundamental right to earn a living by practicing any trade or profession of his or her choice.”
“in the clash between the attempt of employers to protect themselves from competition and the right of employees to seek employment wherever they choose, the right of livelihood of employees must prevail.”
“a contract, which had for its object a restraint of trade, was prima facie void…… under Section 27 of the Indian Contract Act, 1872, a service covenant extended beyond the termination of the service was void.”
“employer has right to terminate the contract of employment on the ground of misconduct; hence, it cannot be said that the employee had absolutely no right to resign from the employment on account of better prospects or other personal reasons. It was observed by the court that merely because for some time the employer might face some inconvenience, the employee concerned cannot be forced to come back for the pleasure of the employer or to satisfy the ego of the higher-ups of the contemplated competition in the market.“
“a service covenant extended beyond the termination of the service is void. It was held that an employee could not be restrained for all times to come to use his knowledge and experience which he gained during the course of employment either with the employer or with any other employer. It was also held that the principles laid down by the English Courts on common law and equity will not be applicable in view of Section 27 of the Indian Contract Act.“
“If it is not going to benefit the employer in any legitimate manner, the court would not injunct the employee from exercising his skill, training and knowledge merely because the employee has agreed to it.”
Niranjan Shankar Golikari v. The Century Spinning and Manufacturing Company Ltd
V.F.S. Global Services Ltd. v. Mr. Suprit Roy
Superintendence Company of India vs Krishan Murgai
Star India Pvt Ltd. V. Laxmiraj Seetharam Nayak
Sandhya Organic Chemicals P.Ltd v. United Phosphorous
Lalbhai Dalpatbhai and co. v. Chittaranjan Chandulal Pandya
---- Kindly obtain the copy of certified standing orders of your company. This may be available at HR page of intranet, or with concerned HR personnel. Standing Orders are to be displayed at the gate/notice board.If these are not available or circulated submit a written request to the good offices of your appointing authority, MD, Head-HR, to supply these to you by redg post immediately mentioning that these are not available at HR page, gate and with HR personnel Mr/Ms…… and are not circulated to you till date (and other employees if it is true), It is felt that such a clause may be in violation of the certified standing orders of the company.
Take care of non disclosure principle. Do not disclose salary of employees, manufacturing formulae etc. in writing or on any kind of record.
--- Mr. Mahesh has given valuable advice. Kindly follow it.
This seems to have become a trend in IT companies especially that a relieving letter is demanded and reference check is sought by the prospective/new employer and a clause on the same is mentioned in appointment letter.
It shall be appropriate to inform your next employer in writing even if by email that your current employer is declining to issue acceptance of resignation, service certificate, FNF statement, relieving letter and that you won’t be in a position to provide these and can provide only copy of notice of resignation and final resignation and their proof of dispatch by redg. post and POD ( which you can obtain from PO one internet generated free of cost and other certified copy of run sheet of postman against a fee of Rs.10/), and if willing the company may employ him.
There are threads in LCI mentioning withdrawal of offers once past employer started making complaints to new employer.
Hence protect your interest completely from possible situations.
`
