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Amaranath (OE)     08 July 2012

Need advice

I received a new rule of my company from HR. The rule says "No employee can join the direct or in-direct client of our company for 1 year after resigning". Is this rule valid in India? Our company has direct contract with 3 copanies, and through one of our client we are working from another company. All companies are in UK.

one of our client is MNC company which has branches in many countries and we are working for UK branch and this UK branch is our direct client. The same company has branch in India too.(for ex:- xyz uk pvt ltd and xyz India pvt ltd).

Now if I join india company will it be considered againest the new rule of our company?

as per my knowledge Indian companies have to work as per indian rules and UK companie has to work as per UK rules and both companies might have same name but cannot be considered as same. Is this correct?

Generally who will be considered as indirect clients?

Any suggestions on my query is very valuble to me.



Learning

 1 Replies

Kumar Doab (FIN)     09 July 2012

Have you accepted the new rule in writing? Since you have reservations and are probably looking for future association with direct/in direct client companies you may not accept the new rule and may submit in writing under acknowledgment, that the new condition to not to be associated with direct or indirect competitor is not acceptable to you, and keep a copy. In case of any conflict the written record shall come to your rescue.

After consultation with your lawyer you may even mention that you shall not disclose any confidential information to the competitors. Company shall have to prove that you had access to sensitive information or you downloaded sensitive information.

You should understand that time has come to separate before the new clauses become applicable. Companies are known to press that the communications sent to employee become applicable even if employee has not accepted and thus burden the employee with litigation and bad practices such as notices to employee and future employers, adverse comments in reference check, blocking FNF settlement, gratuity, PF, relieving letter, service certificate, from 16 etc.

You may go thru the attachments:

Appointment letter Law of negative covenants in employment contract

And

Non Compete Clauses and The Indian Contract Act, 1972

posted at LCI.

 

 

 In case of a dispute you may have to approach a competent and experienced service lawyer and courts have to take a qualified decision.

To the best of understanding the restraint is applicable till the employee is employed with the employer. Post employment restraint should not be applied.

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. 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 shall be against 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. Beni Prasad has uploaded the attachment

https://www.lawweb.in/2012/04/injunction-restraining-employee-from.html

in forum at following thread:

Forum Home > Labour & Service Law > Employment > Injunction restraining employee from joining alternative co.

At following link:

https://www.lawyersclubindia.com/forum/Injunction-restraining-employee-from-joining-alternative-co--55012.asp


Attached File : 142469673 appointment letter law of negative covenants in employment contract.pdf, 142469673 non compete clause not enforceable in india.doc downloaded: 165 times

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