An untimely resignation would require the bank to undertake a prolix and expensive recruitment process involving open advertisement and a fair competitive procedure, lest the appointment falls foul of the constitutional mandate under Articles 14 and 16,” observed the bench of Justices P S Narasimha and Joymalya Bagchi.
He added that the same principles apply even in cases involving consultants, where there may not be a formal employer–employee relationship.“Where there is no clear employer–employee relationship—such as with freelancers, gig workers, volunteers, or informal hires—lock-in clauses are generally not enforceable, as there is no formal contract establishing duties, consideration, or a service relationship.
Earlier principles regarding the reasonableness of liquidated damages will still apply, she noted, adding that the damages cannot be so excessive as to compel an employee to remain with the employer.“Employees cannot be penalised for choosing to move to another employer,” she added.
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