• Employer withholding F&F and giving negative BGV comments despite clean relieving letter

1. I worked in a very small MNC branch in Pune (ABC Technologies Pvt. Ltd.) for about 8 months (Jan 2021 – Aug 2021). In Aug-2021 ABC gave us some data of an "old customer (i.e. no live projects)" to do some work. Due to some manual error the data was made public by posting in GitHub from my account which the old customer came to know and escalated next day morning by email. My manager suspended me, citing an “old customer escalation” and after few days I was asked to resign (which I did). Later, I came to know that the customer had even sent a legal notice to ABC which they mutually resolved, and nothing further happened on that front. No loss or damages had to be paid by ABC.
2. After about 2 weeks on 15-Sep-2021, ABC issued me a formal relieving cum service letter with standard wordings and a good-will ending (wishing good luck for future endeavours). They emailed this letter voluntarily.
3. After that, I joined another reputed IT MNC in October-2021 and worked there for 2.5 years without any issues & ABC was quite all along. I had submitted the relieving letter of ABC to them as part of background verification (BGV), and it was accepted. I also took a home loan from SBI submitting the letter of ABC. 
4. For these almost 3 years after my exit, ABC never raised any claim of damages, breach, or dues. No notice or legal action was sent to me during that period. Their last email was relieving letter. However ABC did not do Full & Final (F&F).
5. I changed job in early 2024 and suddenly when my current employer conducted a new BGV, ABC gave "negative feedback" saying that I had breached confidentiality and that my F&F settlement was not processed and I was terminated. This caused me severe mental distress and almost cost me my current project. I also lost my mother few months back so it was extremely traumatic for all sides as I was grieving.
6. I emailed this traumatic thing to ABC who asked me to re-initiate BGV from current company & subsequently made the BGV “green”. However they are still "withholding my F&F" and their "internal records show me flagged", which means future employers may again face the same negative feedback. After "green BGV" when I requested them to clear everything they told "breach of confidentiality obligations".
Queries:
1) Aren't ABC legally barred by "estoppel" years later ? Didn't they do illegal act ?
2) Shall I go to ABC office to discuss? What questions can I ask them ?
3) The appointment letter of ABC had an arbitration clause where the company director appoints the arbitrator. Can't I not directly approach labor commission, to direct ABC to clear everything, because ABC's acts Violates principles of natural justice & is unfair labor practice? 
4) Is ABC's conduct considered bad-faith/predatory tactics? 
5) ABC asked me to re-initiate BGV & cleared. Is it not acceptance of their mistake ? 
6) From above description kindly let me know what points can I apply legally as there is no fault of mine.
Asked 3 months ago in Labour

8 answers received in 1 day.

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18 Answers

  1. Estoppel / Delay – Since ABC gave you a clean relieving letter in 2021 and raised no issue for ~3 years, their sudden negative BGV now can be argued as estoppel and bad faith.

  2. F&F Settlement – Withholding F&F after giving relieving is an unfair labour practice. You can send a legal notice demanding release of dues and rectification of records.

  3. BGV Conduct – Giving contradictory/negative comments after issuing a relieving letter amounts to defamation and unfair trade practice. The fact they later gave “green BGV” strengthens your case.

  4. Arbitration Clause – If your appointment letter has arbitration, you may need to invoke it. But you can still approach Labour Commissioner / Industrial Court for unfair labour practice, since this relates to wages/F&F and fairness in employment, which are statutory rights.

  5. Bad Faith / Predatory Tactics – Yes, their conduct shows bad faith. A company cannot give a relieving letter and then 3 years later allege misconduct without due process.

  6. Next Steps

    • Send written demand / legal notice to release F&F and stop giving negative BGV.

    • If no resolution, approach Labour Commissioner or file a civil claim (damages for defamation + recovery of dues).

    • Keep record of relieving letter, emails, and “green BGV” as evidence.

 

Shubham Goyal
Advocate, Delhi
2054 Answers
14 Consultations

Better visit ABC office personally 

 

2) ask them to clear all your dues 

 

3) you have never been terminated .you can sue the company for damages 

 

4) you can invoke arbitration clause approach court to appoint sole arbitrator 

 

5) they have accepted their  mistake 

Ajay Sethi
Advocate, Mumbai
99754 Answers
8141 Consultations

You can approach labour commissioner. The said conduct is illegal 

Prashant Nayak
Advocate, Mumbai
34494 Answers
248 Consultations

1. If you have been officially relieved then you should have the relieving letter, you may go through the contents that if the employer had mentioned about the F&F settlement in it or not, if not then you can demand the same, though you are late in approaching them for settlement of dues to you.

2. You can make a personal visit to the office and get all your issues resolved.

3. If you don't get proper response from the employer and if you come under labor category you can very well approach labor commissioner for remedy and relief.

4. No, they have done their duty, you failed to follow it up subsequently.

5. It may be considered as their admittance but in no way that would come for your help to solve the present crisis unless you initiate steps to clear them.

 

T Kalaiselvan
Advocate, Vellore
89956 Answers
2490 Consultations

ABC Technologies cannot legally withhold your full and final (F&F) settlement or provide negative feedback years after they gave you a formal relieving letter with standard/good-will wording and no pending claim. Issuing a clean relieving letter and wishing you well creates a strong case of estoppel: the company, after giving formal closure, cannot later claim breach and damage your reputation or career unless fraud was concealed or discovered later—which is not your case.

1. Estoppel and ABC’s conduct:
Yes, estoppel applies here. ABC’s clean relieving letter and silence for nearly 3 years legally and ethically bar them from raising subsequent allegations or withholding your F&F on old grounds already addressed. Issuing ‘green’ BGV after intervening further reinforces that any prior negative feedback was unjustified, and continuous negative flagging or communication can be argued as defamation and unfair labour practice.

2. Meeting ABC:
You may visit and clearly demand:

  • Full and final settlement—insist on written reasons for any withholding.

  • Written closure on your employment record and removal of negative flagging.

  • Confirmation that your prior communication and green BGV now make your record clear.

If they refuse, insist they provide all reasons and communications in writing, as you may use this as evidence.

3. Arbitration vs Labour Commission:
Even if there’s an arbitration clause appointing their director, statutory employment rights (F&F, defamation, unfair labour practice) fall under the Labour Commissioner’s and Industrial/Labour Court’s jurisdiction, especially if your salary at exit was below the threshold for “workman.” Case law (Bombay HC, Kingfisher Airlines; Booz Allen & Hamilton SC) supports the position that labour disputes and F&F claims are NOT ousted from labour forums merely by arbitration clauses.

4. Bad faith and legal points:
ABC’s sudden negative feedback, years after positive documentation, shows bad faith and is recognized by courts as unfair. Malicious BGV sharing without substantiation is actionable as defamation. You may:

  • Send a legal notice demanding F&F and cessation of negative BGV practices.

  • Approach the Labour Commissioner for unpaid dues and unfair labour practice.

  • Seek damages for reputational harm through a civil suit.

5. Green BGV as acceptance:
Their willingness to “clear” your BGV upon request is a tacit admission that negative remarks were not based on a fair process; it implies the earlier stance was unsustainable.

6. Key legal principles in your favor:

  • Promissory estoppel after a formal relieving letter and time-bar.

  • Unfair labour practice and natural justice.

  • Right to full settlement post-legal exit and relief from blacklisting.

  • Employers cannot defame/formally blackball an employee years later when no fraud or loss is proven.

Next steps:

  • Send a demand/legal notice for clearance of all records and F&F settlement.

  • If not resolved, file a complaint with Labour Commissioner/Industrial Court for F&F dues and unfair practice, and consider defamation action if detrimental statements persist.

ABC’s conduct is not only unethical, but likely unlawful. Their initial relieving letter and subsequent actions create strong legal grounds for your claims.

Yuganshu Sharma
Advocate, Delhi
944 Answers
2 Consultations

Meet them personally 

 

2) amicable settlement is best option 

 

3) what is amount due and payable to you 

 

4) if it is substantial tjen only invoke arbitration clause 

 

5) burden of proof is upon ex employer to prove  allegations made by then 

Ajay Sethi
Advocate, Mumbai
99754 Answers
8141 Consultations

1. From your contents it appears that the company had not condoned your act of posting the client's matter in public due to which the company and the client had issues, though solved it amicably at a later stage. However, though the company had not meted out harsh treatment to you by terminating your services, instead had relieved you from the job by taking resignation letter from you. In act you never asked the company about your F & F settlement until you had issues during BGV from the new employer. This clearly indicates that you knew the problems from your side hence you did not want to pursue the matter in furtherance, but since the company in order not to spoil your career had given a green BGV, you are trying to take advantage over it and demand for the same  As a matter of act you should be aware of the limitation also for claiming the settlement amount from the date of resignation to the date of claim.

3. You are mentioning about the company's damages but nothing prevented you from asking the details from the company when they were reluctant to settle the F&F dues. You issue a legal notice demanding the settlement amount, let them give reply by mentioning the details of the losses to the company from your side after which you ascertain the facts and think about escalating the issue further legally.

4. This is a practical issue to be considered in the final arguments when the company initiates inquiry or institutes a lawsuit.

5. First of all you may confirm if you fall under the labor category and also what will be the reason that you will approach labor court because the settlement of F&F canot be a major issue especially when the matter is at the belated stage, besides you have an option to file a recovery suit in the civil court.

 

T Kalaiselvan
Advocate, Vellore
89956 Answers
2490 Consultations

In the above case you can take action against them for the same by sending legal notice 

Prashant Nayak
Advocate, Mumbai
34494 Answers
248 Consultations

ABC gave you a clean relieving letter in 2021, so after 3 years they cannot suddenly allege “breach” — this is barred by estoppel and bad faith. Withholding F&F is an unfair labour practice, and contradictory BGV is defamation. You may:

  1. Send one polite email asking ABC to give proof of breach and actual damages.

  2. If they don’t resolve, file a complaint with the Labour Commissioner for release of dues and correction of records.

Arbitration is secondary — labour rights (F&F, wages) can go directly to Labour Commissioner.

 

 

 

Shubham Goyal
Advocate, Delhi
2054 Answers
14 Consultations

ABC Technologies must provide concrete proof of any breach—they cannot simply rely on generic statements like "breach of confidentiality" to justify withholding your full and final (F&F) settlement or flagging you indefinitely. The law requires that employers demonstrate actual damages or losses if they wish to penalize employees beyond contractual norms; speculative claims about perception or reputation are not sufficient and are not accepted by courts.

You absolutely have the right to reply to their email, politely demanding:

  • Specific details of the alleged breach (events, contracts, actual client, loss suffered).

  • Documented evidence supporting their claim, not vague boilerplate statements.

  • Copies of any active client contracts relevant at the time of the incident.

  • Written explanation for ongoing withholding of dues and internal flagging.

ABC is legally obligated to respond with transparency, and their reluctance to provide any details or evidence can itself be challenged for lack of fair process.

ABC cannot give you a “life sentence” or keep you flagged indefinitely without a formal process and proven violation. You can ask to see proof of any active client engagement or contract in place at the time, which would clarify their own role and obligation to safeguard the data. The burden of proving breach and damages rests entirely on ABC.

If ABC does not provide a substantive reply and continues to withhold your F&F dues, you should immediately:

  • File a written complaint to the Labour Commissioner or under the Payment of Wages Act. Labour authorities regularly handle F&F settlement disputes and can order payment with interest if ABC fails to comply.

  • Consider sending a legal notice citing your rights, estoppel by the prior relief letter, and demanding completion and closure of your employment.

  • Begin documentation for a civil action if your reputation suffers further due to ABC’s conduct.

You may attempt a final polite reply to ABC’s email requesting proof, as it may help your record and clarify matters, but legal action is strongly supported by current law and precedent if they remain uncooperative.

If you require further strategy, drafting, or representation, you are welcome to contact us for professional assistance. This advice is strictly based on your facts and current law.

 

 

 

 

 

Yuganshu Sharma
Advocate, Delhi
944 Answers
2 Consultations

- Since, the ABC already issued a relieving letter with positive remark then the said remark on later stage is against the law. 

- You can send a legal notice to ABC 

Mohammed Shahzad
Advocate, Delhi
15796 Answers
242 Consultations

  1. Answer to you third question first; you are not within the purview of “labour” as defined in IDA. Different parameters are applied determination of labour, like amount of salary and nature of work. Outer limit of salary of labout is Rs. 20K. You can approach civil Court to resolve the  
  2. It is admitted that due to some manual error the data was made public by posting in GitHub from your account. This cannot be wished away.
  3. Limitation: as your fnf is not cleared, right of employer against you continues and limitation of three years is not attracted.
  4. Damage due to breach of confidentiality: actual proof of damage is not essential breach confidentiality is itself a violation of express clause.
  5. Your option is to settle with employer out of Court as breach is confidentiality is looked upon seriously by Courts.

Ravi Shinde
Advocate, Hyderabad
5121 Answers
42 Consultations

 

  • Yes, ABC is estopped from raking this up now; burden is on them to prove breach and damages.

  • Reply politely to their email asking for specifics, proof, and legal basis. This will be evidence in your favour.

  • Actual damages must be proven — vague “compliance” arguments don’t hold in law.

  • ABC cannot blacklist you indefinitely; that is illegal and an unfair labour practice.

  • If ABC does not clear your F&F or keeps harassing you, you should file a complaint with the Labour Commissioner in Pune. Arbitration cannot block your statutory labour rights.

for more details you can take my consultation

regards,

Adv. Arunkumar Khedia

(Bombay High Court)

 

Arunkumar Khedia
Advocate, Mumbai
92 Answers

1. You know the amount dues to be paid to you, you may issue a legal demand notice, iof they don't respond or comply then you can file a money recovery suit in the civil court.

2. What were you doing all these three years without asking for your dues ? nothing prevented you from claiming your due amount within the limitation period, if it is more than three years then it may be barred by limitation too, hence confirm the delay and find out if it is barred by limitation or not.

3.  Your limitation period for filing a money recovery suit will begin from the date of their reply hence you may take legal action to recover your amount.

4. If you had accepted the relieving letter then you have no case for illegal termination, as well as you do not have any reason to even claim damages at this stage especially when you hAd requested only settlement of F&F and never raised this issue in the past or till now.

5. The above answer suits this question too.

6.  You remained silent about all such issues so far but you seems to be aggrieved only when they had given a negative feedback in the BGV hence you may not have any reason to fight against them for the reasons you have stated in this question.

7. When your grievances itself is not maintainable what type of case laws do you require?

 

T Kalaiselvan
Advocate, Vellore
89956 Answers
2490 Consultations

You can send him a notice and file appropriate proceedings in labour court or civil court depending on your facts. You can also approach office of Dy labour commissioner and seek reliefs 

Prashant Nayak
Advocate, Mumbai
34494 Answers
248 Consultations

You can invoke arbitration clause for resolution of disputes 

 

if no arbitrator appointed approach HC for appointment of arbitrator 

 

3) it is an excuse  not to release your dues 

 

4) invoke arbitration clause and in your statement of claim seek payme t of your dies and compensation for mental torture undergone by you 

Ajay Sethi
Advocate, Mumbai
99754 Answers
8141 Consultations

  1. Arbitration must be invoked by either party; ABC cannot withhold F&F indefinitely without starting arbitration. Withholding dues without due process is illegal.

  2. Delayed claim without notice for 3 years is unethical and barred by estoppel.

  3. They cannot arbitrarily deny F&F after long silence without prior communication.

  4. Damages for mental trauma and estoppel can be claimed under tort principles and breach of contract in civil courts; exact amounts vary case by case.

  5. India recognizes tort law; relief sought via civil courts or labor courts depending on claim nature.

  6. Yes, repeated refusal causing mental distress can qualify as Intentional Infliction of Emotional Distress (IIED).

  7. Refer to cases on estoppel, unfair labor practices, and mental distress damages from Indian labor and civil law precedents.

Shubham Goyal
Advocate, Delhi
2054 Answers
14 Consultations

• ABC is acting unfairly & in bad faith.

•They carry burden of proof, not you.

•Silence for 3 years + relieving letter = estoppel.

•Withholding F&F = unfair labour practice.

•You can reply politely once (to create record), then escalate legally.

•Remedies: Labour Court, Arbitration (via HC), or Civil Suit for damages.

Adarsh Kumar Mishra
Advocate, New Delhi
195 Answers

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