Kochi: In a significant ruling favouring employees, the Kerala High Court has held that employers cannot refuse to accept a worker’s resignation on the ground of financial difficulties, and that forcing someone to remain in service against their will amounts to bonded labour, which is prohibited under Article 23 of the Constitution.

Justice N Nagareesh delivered the verdict while hearing two writ petitions filed by the Company Secretary of Traco Cable Company Limited, a state-owned public sector undertaking.

The petitioner submitted his resignation after his salary remained unpaid for an extended period. However, the company declined to accept it, citing its financial condition and his key role as Company Secretary. The Board of Directors decided not to relieve him, stating that no other qualified person was available and that his services were crucial to the company’s revival efforts.

The company also issued memos warning of disciplinary action. While the case was pending, a show-cause notice was served on the petitioner, accusing him of unauthorised possession of a company laptop.

Challenging both the rejection of his resignation and the disciplinary steps, the petitioner approached the court.

The High Court noted that the position of Company Secretary is a statutory role under the Companies Act and is responsible for ensuring compliance with the Companies Act, 2013.

It further observed that the petitioner could not take up employment elsewhere unless the company forwarded the required forms to the Registrar of Companies. Without this, his professional membership would remain tied to the respondent company.

The Court stated that once an employee submits a resignation, the employer is duty-bound to accept it and relieve the employee, subject only to conditions mentioned in the employment contract, including any notice period.

It held that unless there is a breach of contractual or notice requirements, an employer cannot refuse to accept a resignation.

The Court ruled that denying resignation without a valid justification amounts to bonded labour under Article 23 of the Constitution.

It also clarified that financial hardship or administrative inconvenience cannot be used as grounds to compel an employee to continue working.

“Financial issues or financial emergency cannot be a reason to force a Company Secretary to work for an incorporated Company against his will and without his consent.”

The Court observed that the disciplinary proceedings initiated after the filing of the writ petition appeared to be intended to pressure the petitioner.

Based on these findings, the High Court allowed the petition, quashed the memo, and directed the company to accept the resignation and relieve the petitioner from service at the earliest.