Wrongful Termination and Unpaid Dues by a Mental Health Startup

Wrongful Termination and Unpaid Dues by a Mental Health Startup

If you are stuck in such a situation, here is what to do.

Ms. Rina was recently engaged with “Serene Pathways,” a burgeoning startup in the mental health sector based in Aravalli Nagar. Within a couple of days of joining, she found the work environment becoming hostile. The founder, Ms. Kavita, would harass her mentally, calling incessantly throughout the day for work updates, even when the agreed-upon deadline was the end of the day. Ms. Kavita’s communication was often laced with scolding and unreasonable demands.

Rina observed that this exploitative behaviour was not limited to her; a 20-year-old hired for a tech role was also subjected to similar treatment. Furthermore, Ms. Kavita had plans to hire two 17-year-old unpaid interns to develop a marketing strategy, raising ethical and legal concerns.

Attempting to address the issues professionally, Rina sent a formal email to Ms. Kavita suggesting improvements to the organizational workflow. The situation escalated when Ms. Kavita demanded that Rina, who was not in a managerial role, define her own Key Performance Indicators (KPIs). When Rina provided realistic and achievable numbers, she was met with further mental pressure and criticism. She documented this exchange in a polite email.

The very next day, Rina was abruptly removed from the organization without any prior warning or a formal notice. This was a direct violation of her employment contract, which stipulated a mandatory 7-day notice period. When Rina questioned this, Ms. Kavita bizarrely claimed the termination was done to “protect Rina’s mental health.” Subsequently, Rina did not receive her due compensation and even received threatening emails when she pressed for payment. Ms. Kavita has since closed all communication, stating that no payment will be made.

The company is now defending its position by citing a “performance-based pay” clause in the contract. However, the contract does not specify that payment is contingent upon completing a certain task, especially when the company itself initiated the termination. Rina was removed; she did not resign.

Advice in such cases

If you find yourself in a similar predicament, it is crucial to act systematically to protect your rights.

  • Gather all your documents, including your employment contract, offer letter, all email communications, and any chat records. This evidence is the foundation of your case.
  • The first formal step is usually to send a legal notice through an advocate. This notice will detail your claims, including unpaid salary, damages for wrongful termination, and mental harassment, and give the employer a specific timeframe to comply.
  • Consult with Lawyer: The very basic and important step to start is talk to Lawyer / advocate. You should not hesitate in paying his consultation fee i.e. might be in range of Rs. 10,000 to 50,000 depends case to case. He is helping you in this situation of come out. He is expert in the domain and can help you explain the procedure which you might have never explored. A good lawyer can get the issues resolved much faster than you think.
  • If the legal notice does not yield a positive response, you can file a complaint before the Labour Commissioner or initiate a summary suit in a civil court for the recovery of your dues.

Applicable Sections of Law

Several Indian laws can be invoked in such a scenario:

  • Indian Contract Act, 1872: The employer’s failure to adhere to the 7-day notice period is a clear breach of contract. You can sue for damages arising from this breach.
  • The Payment of Wages Act, 1936 / Industrial Disputes Act, 1947: These laws provide mechanisms for the recovery of unpaid wages. The appropriate law depends on your job role and salary bracket. Wrongful termination without due process is also challengeable under the Industrial Disputes Act.
  • Bharatiya Nyaya Sanhita, 2023 (BNS): If the threats received via email are serious enough to cause alarm or force you to do something you are not legally bound to do (like forfeiting your salary), it may amount to criminal intimidation under Section 316 of the BNS.
  • Specific Relief Act, 1963: This can be used to enforce the terms of the contract or seek compensation for its non-performance.

If you are the complainant

As the person filing the complaint, your actions are critical.

  • Preserve all evidence meticulously. Take screenshots of chats and save all emails to a secure location. Create a timeline of events with dates and corresponding evidence.
  • Cease all informal communication with the employer once they have formally refused payment. All further communication should be through your lawyer.
  • Consult with Lawyer: The very basic and important step to start is talk to Lawyer / advocate. You should not hesitate in paying his consultation fee i.e. might be in range of Rs. 10,000 to 50,000 depends case to case. He is helping you in this situation of come out. He is expert in the domain and can help you explain the procedure which you might have never explored. A good lawyer can get the issues resolved much faster than you think.
Wrongful Termination and Unpaid Dues by a Mental Health Startup

If you are the victim

Being a victim of such workplace exploitation can be distressing. Your priority should be your well-being and securing your legal rights.

  • Focus on maintaining your composure and mental health. This is a professional dispute, and a calm, strategic approach is most effective.
  • Secure your evidence immediately. Do not rely on company servers or platforms for data; save everything on your personal devices or cloud storage.
  • Understand your rights by carefully reading your employment contract and seeking legal advice. Do not be intimidated by the employer’s claims or threats.
  • Consult with Lawyer: The very basic and important step to start is talk to Lawyer / advocate. You should not hesitate in paying his consultation fee i.e. might be in range of Rs. 10,000 to 50,000 depends case to case. He is helping you in this situation of come out. He is expert in the domain and can help you explain the procedure which you might have never explored. A good lawyer can get the issues resolved much faster than you think.

How the police behave in such cases

It is important to understand the role of the police in these matters. This is primarily a civil or labour dispute, not a criminal one. The police will generally not register an FIR for non-payment of salary or breach of contract. They will likely advise you to approach the Labour Court or a civil court. However, if your complaint includes credible evidence of criminal acts like serious threats amounting to criminal intimidation (Section 316 BNS), cheating, or forgery, the police are obligated to investigate. They may initially register a Non-Cognizable Report (NCR) and direct you to the court, but with a strong complaint backed by evidence, an FIR can be lodged for the criminal aspects of the case.

FAQs people normally have

Can my employer fire me without giving a notice period mentioned in the contract?

No. If the contract specifies a notice period, the employer must either allow you to serve it or pay you a salary in lieu of the notice period. Terminating you without either is a breach of contract, for which you can claim damages.

Can my employer refuse to pay me by claiming ‘poor performance’ after firing me?

An employer cannot unilaterally decide not to pay for work already done by citing ‘poor performance’ after termination, especially if there is no prior record of warnings or a performance improvement plan as per company policy. The terms of the contract are paramount. A vague “performance-based” clause cannot be used to deny payment for the period you have worked, particularly when they terminated the contract.

What can I do about the mental harassment I faced?

While mental harassment that is not of a sexual nature has limited direct criminal recourse, you can file a civil suit for damages. You would need to prove that the harassment caused you mental trauma, distress, and financial loss. The emails, messages, and any witness testimony would be crucial evidence.

Wrongful Termination and Unpaid Dues by a Mental Health Startup

What evidence is required?

To build a strong case, you will need the following evidence:

  • The signed employment agreement or offer letter.
  • All email correspondence, especially the termination email, discussions about KPIs, your formal complaint, and the employer’s threats.
  • Records of chats on platforms like WhatsApp or Slack.
  • Bank statements to show any previous salary payments or lack thereof.
  • Testimony from colleagues who may have witnessed the harassment or are also victims (like the tech employee).
  • A detailed log of events, calls, and instances of harassment.

How long will the investigation take?

This is not a police investigation in the traditional sense. The timeline varies depending on the legal path you choose:

  • Legal Notice: The employer is typically given 15 to 30 days to respond. The matter can be resolved quickly if they choose to settle.
  • Labour Court: Proceedings before the Labour Commissioner or Labour Court can take anywhere from a few months to a couple of years to reach a conclusion.
  • Civil Court: A summary suit for recovery of money is faster, but a full civil suit for damages and other reliefs can be a lengthy process, often taking several years.

Advocate Sudhir Rao, Supreme Court of India

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