Refusal to Accept Resignation Equivalent to Forced Labour, Rules High Court

In a significant ruling reinforcing the rights of employees under constitutional and contractual protections, the Kerala High Court has held that an employer cannot arbitrarily refuse to accept an employee’s resignation if it is submitted in accordance with the terms of the employment contract. The Court observed that such refusal, in the absence of any contractual violation or disciplinary grounds, would amount to compelling an individual to continue in service against their will — a situation comparable to forced labour prohibited under Article 23 of the Constitution of India.

 

The judgment was delivered by Justice N. Nagesh in a petition filed by a company secretary challenging the action of a public sector undertaking (PSU) that had declined to accept his resignation. The petitioner contended that despite complying with the conditions stipulated in his employment agreement, including the requisite notice period, the PSU refused to relieve him from service and directed him to continue performing his duties.

 

The Court made it clear that when an employee tenders resignation in accordance with the terms specified in the employment contract — including adherence to the notice period and other conditions — the employer is ordinarily bound to accept it. Refusal to do so, without any valid legal justification, would be unlawful. The Court emphasized that only in circumstances involving serious misconduct or where disciplinary proceedings are pending that could result in financial loss or other grave consequences for the institution, can the employer justifiably withhold acceptance of resignation.

 

It was noted that in the present case, there was no allegation of grave misconduct, nor was there any pending disciplinary proceeding that would warrant such action. The PSU had rejected the resignation on the grounds of its own financial difficulties. However, the Court categorically held that financial hardship faced by an organization cannot be a legitimate ground to compel an employee to continue working against his consent.

 

Observing that no employer can force a company secretary or any other employee to work against their will in the absence of contractual breach, the Court directed the PSU to accept the petitioner’s resignation. The organization was further instructed to relieve him from service within two months and to clear all outstanding dues, including salary arrears, leave encashment, and other admissible benefits.

 

The ruling underscores the principle that employment is a consensual relationship governed by contract and constitutional safeguards. By equating arbitrary refusal of resignation with forced labour, the Court has reaffirmed the fundamental right of individuals to choose their employment and to exit it in accordance with lawful terms.