Remedies against harassment by Recovery Agents
by: Adv. Kishan Dutt Kalaskar 2021-02-18 07:12:13
by: Adv. Kishan Dutt Kalaskar 2021-02-18 07:12:13
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Remedies against harassment by Recovery Agents
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Gardening leave refers to the period in which the employee is given a termination letter with the notice of termination. In this period, the person is not allowed to work at the workplace; neither the employee is allowed to work from home or from any other location. The salary will be awarded to the employee during the notice period, however restricting him/her to work for his current position in the company or for any other new position. During the period of garden leave, the organization makes sure that the communication between the employee and staff is minimized. Moreover, this period also overviews that customers and clients have no connection with the employee who is under the garden leave.
There are two types of Garden leave. They are:
Duties and Rights under Garden Leave
The need for Garden Leaves
Garden leave is beneficial in many ways. Some of them are:
Therefore, it is always considered a better option that once the notice of termination is served to the employee, he/she is kept away from the working of the business.
Non-compete Agreements
Such agreements are favoured as they are used as a strategy by the organizations and the companies to prevent their employees from leaving their company. Such kind of agreement restricts an employee from joining a company which is directly in competition with his current company. For example, a person working as a delivery boy for “pizza hut” leaving his current job for working as a delivery boy with “dominos”. This kind of agreements makes sure that no crucial information is shared among the organizations. Furthermore, this type of agreements prevents the employee from sharing trade secrets and confidential information.
Article 19 of the Indian Constitution states such agreement as restrictions on the employee’s freedom of trade and business. Therefore, in India, garden leave and non-competent agreements are considered as restrictive covenants. Section 27 of the Indian Contract Act, any restriction put on the person for his/her involvement in his/her choice of business is void.
Case Law
Niranjan Shankar Golikari v. Century Spg & Mfg Co. Ltd.,
(1967) 2 SCR 378.)
Under this case, the apex court of India explained the difference between the Non-competent agreements and the garden leaves. The court emphasized that the employer of a company has the right to put restrictions on the employee during the contract term, but after the termination restrictions are put on the non-disclosure to another company. However, the employer cannot restrict the employee from joining any other company which is dealing in the same or similar trade.
Percept D’Mark (India) Pvt. Ltd. v. Zaheer Khan & Anr.
(AIR 2006 SC 3426.)
The court, in this case, came out with the verdict that non-competent agreements which are extending beyond the agreement are unenforceable.
Conclusion
Though garden leave clauses aim to protect the circulation of sensitive information of the employer, it should be made sure that they are in restraint of trade and in contravention of Section 27 of the Contract Act. The time period should be kept in mind while drafting a contract for any employee. Garden leave should only be permitted till the date of termination (i.e. during the reasonable notice period), as after that the contract is not enforceable. Therefore, while the employer may set out a garden leave clause in the employment contract, it should only be implemented during the notice period and not beyond that. Hence, it is advisable to hire a professional before such contracts are drafted to avoid any legal consequences in future.
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