Submit your resignation
2) serve the notice period
3) after resignation you can join the client company
4) any agreement in restraint of trade is void
Non-compete agreement
Hi, Recently I joined one service based company in india through virtual on boarding. There is clause that I should not join the client company for three years. I received a offer from client(india)company after 25 days of joining service based company. Point 1: In my present company I have not started any work nor involved in any projects. Point 2: I was unaware that it was my client. Please let me know can I resign without notice ( because only 25days complete after joining ) and join the client company . Will it be a breaching the non-compete agreement. Please also advise how to proceed if I want everything smoothly. Thanks in advance
Asked 4 years ago in Labour
First answer received in 10 minutes.
Lawyers are available now to answer your questions.
8 Answers
- Your first step is to properly resign either by serving notice period or buying it. Once you obtain your relieving letter, you are a free bird. It is your right to earn your livelihood by lawful means guaranteed under Article 21 of the Constitution of India by joining any employer. A non-compete agreement is legally known as “clause in terrarium” that is only to terrorize a party to the agreement. It is not intended to be implemented. Such clause is interpreted in favor of employee by the Court as the employer is in dominating position. Such clause is not even workable as an employee cannot be forced to wait for three years to join employment with the employer suitable for his job.
- Joining just for 25 days and not receiving any project will not help. Your only solution is resign buying notice period and joining any employer. Your ex cannot legally harm you.
Dear sir,
1. you can file for resignation and serve a nice period.
2. After you receive your letter, there is no boundation upon you to go by the terms of the previous company.
3.You can join the company and the clause in the agreement is not enforceable as it is an unreasonable restraint. and any agreement restraining trade is void under the Contract Act.
Thank You
Resignation from your current company is to be pursued with proper proce4dures, i.e., by serving the requisite notice period or to pay compensation in lieu of the unserved notice period.
Non-compete provisions for the term of employment are not regarded 'restrictive covenants' under Indian law.
However, having such provisions applicable after a person leaves the organization is against the Indian Contract Act, and, therefore, not enforceable.
In India such a clause is governed by the codified provisions of section 27 of the Indian Contract Act, 1872 ("Contract Act"), whereby every agreement by which anyone is restrained from exercising a lawful profession, trade or business of any kind, is to that extent void.
The Supreme Court of India, while dealing with such a contractual issue in Superintendence Company of India (P) Ltd. v. Sh. Krishan Murgai, raised the question that whether a post-service restrictive covenant would fall within the mischief of section 27 of the Contract Act. The court held that a contract, which had for its object a restraint of trade, was prima facie void. Even the Delhi High Court in Foods Ltd. and Others v. Bharat Coca-cola Holdings Pvt. Ltd. & others observed,
"It is well settled that such post termination restraint, under Indian Law, is in violation of Section 27 of the Contract Act. Such contracts are unenforceable, void and against the public policy. What is prohibited by law cannot be permitted by Court's injunction."
Therefore you need not worry about the non compete clause that you have signed with the company after resignation.
Technically speaking this is a breach. As you are only 25 days into the company it is obvious that you cannot lnow all the client companies. But once you know you cannot say that you didn't know about it from the beginning.
Moreover you have to serve the notice period as you have signed the contract.
What you can do is don't inform tagt you wish to join that company.
You should just resign and ask that no work be assigned to you.
1. Well every NCA has blanket applicability. Therefore unless you had the scope of any confidential trade secret of your previous employer , joining of its client subserviently would not come under the restraint clause of your NCA.
2. Therefore if there was no sharing of secret information of your previous employer there is no need to resign from your present job.
- As per Specific Relief Act, if any employee quits before the notice period, the Employer can only recover the Notice pay, and the Company cannot force to serve the entire notice period.
- Further, the resignation decision is the employee’s decision, and the employer cannot sue for breach of contract, if the employee leaves without serving contractual notice.
- Except, recovery of the said amount, company cannot harm you for the same
- Further, no employer can refused to return the original certificates or to issue relieving letter .If they are doing so, their act is illegal, unjustified and against the fundamental rights of the employee.
- Further, section 27 of the Indian Contract Act prohibits any agreement in restraint of trade and profession.
- Hence, better serve the notice period only as per your offer letter
1. You can join the client company if there is no injunction passed against you by any court.
2. Such non compete clauses are in face of right to practice trade, business or profession guaranteed under the Constitution of India, hence courts do not ordinarily enforce it.
3. You are bound to serve the notice period though.
