News and developments
‘Reasonable lock-in period in employment contracts are valid in Law’: Delhi High Court
Background
The petitioner is a company that appointed three employees under a Service Employment Agreement with clauses governing covenants such as lock-in period, compliance, termination with notice, consequences of termination, dispute resolution, confidentiality, etc. The respondent employees did not abide by their respective service agreements and resigned prematurely, i.e., before the lock-in period expired. Responses to the notice of demand and invocation of arbitration sent by the petitioner to resolve the issue were not satisfactorily received or replied to.
Issues for Consideration
Primary issues for consideration before the single judge bench of Delhi High Court were as follows –
Author: Shreyas Mehrotra
Footnotes [1] Lombardi Engineering Limited v. Uttarakhand Jal Vidyut Nigam Limited (2023) SCC OnLine Sc 1422 [2] Kaushal Kishore v. State of U.P. (2023) 4 SCC 1 [3] Brahmaputra Tea Co. Ltd v. Scarth [4] Niranjan Shankar Golikar v. Centuary Spinning & Manufacturing Company (1967) SCC OnLine SC [5] Percept D’ Mark (India) Private Limited v. Zaheer Khan (2006) 4 SCC 227 [6] Affle Holding Private Limited v. Saurabh Singh MANU/DE/0152/2015 [7] BLB Institute of Financial Markets Limited v. Ramakar Jha (2008) SCC OnLine Del 1075
-
- Whether a lock-in period in employment contracts is valid in law or if the same is violative of fundamental rights as guaranteed in the Constitution
- Whether disputes involving employment contracts with a lock-in period are arbitrable as per the Act 1996
Author: Shreyas Mehrotra
Footnotes [1] Lombardi Engineering Limited v. Uttarakhand Jal Vidyut Nigam Limited (2023) SCC OnLine Sc 1422 [2] Kaushal Kishore v. State of U.P. (2023) 4 SCC 1 [3] Brahmaputra Tea Co. Ltd v. Scarth [4] Niranjan Shankar Golikar v. Centuary Spinning & Manufacturing Company (1967) SCC OnLine SC [5] Percept D’ Mark (India) Private Limited v. Zaheer Khan (2006) 4 SCC 227 [6] Affle Holding Private Limited v. Saurabh Singh MANU/DE/0152/2015 [7] BLB Institute of Financial Markets Limited v. Ramakar Jha (2008) SCC OnLine Del 1075