Kerala High Court – Resignation by an employee must be accepted by the employer subject to the conditions mentioned in the service contract and refusal to do so would amount to bonded labour

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The Kerala High Court has stated that an employee’s resignation must be accepted by the employer subject to the conditions stated in the service contract, and that refusal to do so would amount to bonded labor. The court made this observation while granting relief to the company secretary of a public sector undertaking (PSU). The secretary was not being allowed to resign.

Justice N. Nagaresh stated that if there was no violation of the notice period or other conditions stated in the service contract, the employer cannot reject the resignation.

Proposed Disciplinary Action
The judge stated that exceptions may be made if disciplinary action is proposed for serious misconduct or for causing financial loss to the organization. The court stated that in any other circumstances, if the employer refuses to accept an employee’s resignation, it would amount to bonded labor, prohibited under Article 23 of the Constitution of India.

Challenge to Show Cause Notices and Memoranda
The order came on a petition filed by a company secretary challenging the show cause notice and memoranda issued by a public sector company directing him to continue working despite his resignation. The public sector undertaking (PSU) had rejected his resignation and asked him to explain why disciplinary action should not be initiated against him.

Refusal to Accept Resignation
The PSU refused to accept his resignation, arguing that his services could not be terminated due to the PSU’s financial situation. Dismissing the PSU’s action, the court held that financial difficulties or emergencies cannot be grounds for compelling a company secretary to work against his will and without his consent.

Violation of the Right to Resign
The court held that under these circumstances, the proposed disciplinary action against the petitioner (company secretary) could only be seen as an attempt by the respondents (public sector company) to violate the petitioner’s right to resign from service. It also noted that the public sector undertaking has not paid the petitioner’s salary since October 2022.

Resigned after father’s death
The court noted that the petitioner resigned after the death of his father in 2020. The petitioner’s mother had been suffering from neurological and mental illnesses for several years. Therefore, the court stated, the petitioner had no option but to seek another job.

The court directed the PSU to accept the petitioner’s resignation, relieve him from service as soon as possible, and in any case, within a period of two months, and pay him the arrears of salary and other benefits to which he is legally entitled.