High Court: Company Cannot Force Company Secretary to Continue After Resignation

In a significant ruling, the Kerala High Court has held that an employer cannot refuse to accept an employee’s resignation merely because the organisation is facing financial difficulties.

Justice N. Nagareesh delivered the judgement while allowing two writ petitions filed by Greevas Job Panakkal, Company Secretary of state-run Traco Cable Company Limited. The petitioner had resigned in March 2024, citing prolonged non-payment of salary since October 2022 and pressing personal circumstances, including the need to care for his ailing mother.

However, the company’s Board of Directors rejected his resignation, stating that his services were indispensable during the company’s financial crisis. The management also issued several memos directing him to resume duty and threatened disciplinary action.

The High Court ruled that an employee has the right to resign, and an employer is bound to accept it unless there is a violation of contractual notice conditions or pending disciplinary proceedings for grave misconduct. Financial distress, the Court clarified, is not a valid ground to compel an employee to continue in service.

Importantly, the Court observed that forcing an employee to work against his will could amount to “bonded labour,” which is prohibited under Article 23 of the Constitution of India.

The Court set aside the memos issued by the company, directed it to accept the resignation within two months, and ordered payment of salary arrears and other eligible benefits, subject to the company’s financial position.

The ruling reinforces employee rights in public sector undertakings and underscores that financial hardship cannot override an individual’s freedom to exit employment.