Non Solicitation Agreement Story of Rajesh

Amit Kumar Dutta Student EXPGP 2010-13 (U210002)

Rajesh joined Samridhi Financial Services Pvt. Ltd in the year 2011 as an Assistant Manager- Operation and was initially posted in at Allahabad. Samridhi Financial Services Pvt. Ltd is largest micro finance company in India. They have started their micro finance operation in July 2002 from West Bengal. The main objective of Samridhi is to provide financial service to the socially disadvantage section of the society for their economical up liftmen. To fulfill such objective Samridhi is delivering micro finance service to poor women. At present Samridhi has operation in 18 states in India with a port folio of more than 300 cores. Before joining Samridhi Rajesh was in Arohan, a well known Kolkata based MFI operating in West Bengal, Assam & Bihar. He worked there for 3 years as an operation executive posted in Kolkata office. During this period Rajesh learns about the micro finance which makes him passionate about the industry. As a part of his duty he went to different slam areas and discovers the life of poor people. He was very happy with his job as he felt that in addition of doing his duty he was contributing something to his society which could not be easy in any other industry. Rajesh has a dream to work in a rural sector and thus he joined Arohan after completion of his MBA from IRMA. Like other young professional he wants to grow his carrier further. However in Arohan it became impossible because of its slow growth. In addition of that he wants to sift to his native place, Allahabad, due to his family. He was very concern about his parents who were residing in Allahabad. He was the only child of his parents and feeling guilty as he was not able to look after his parent. One day when he was sitting at Haltu branch and thinking about his parent he saw an advertisement in the local news paper where Samridhi was asking for a Regional Manager for its UP operation based from Allahabad. He thought god has provided the opportunity to solve his problem and he applied for the Job immediately. After 10 days he got a phone call from Samridhi for interview at their Saltlake office. Rajesh had not informed the matter to his immediate boss as he knows that there was a Non-Solicitation agreement among the NBFC MFIs and no NBFC

MFI can hire employees of other NBFC MFIs even though there is no such clause in his appointment letter. Further in his curriculum vita he has not mentioned about his experience in Arohan. He talked with one of his friend who was in a NGO MFI and presents him as an executive working in such NGO. He appeared for the interview in December 2010 and the interview was very successful. Finally on 15th December 2010 he got the offer letter for joining. Rajesh informed his immediate boss that he would not be continue his service in Arohan because of his mothers illness and requested him to waive his one month notice period. His immediate boss, Sujit Patra, was a gentlemen and very happy with his performance and he was not wanting to release him. However ultimately he released him on several request and waived his one months notice period. Rajesh Joined Samridhi on January 2011 at Allahabad and become a critical person within a short period of time. Higher management was very happy with his performance and after 6 months probation period confirmed his employment with a pay hike of 10%. On 25th August 2011 Rajesh got a call from his immediate boss, Abhilash Pathak, and he had been asked to report immediately at Regional Office by next day. Rajesh went to the Abhilash Pathaks cabin on next day. Avishek Pathak asked him to put resignation and leave the organization on immediate basis. He also waived his one months notice period. Rajesh was very surprised and he asked his boss about the reasons for such action as he knows that there is no such issue with his performance. His boss replied that he dont have any option because of non solitation agreement between NBFC MFIs. He shows him the letter issued by MFIN* and the required supporting in relation to the violation of non solicitation agreement. Further the management of Samridhi is also not happy with Rajesh as he did not disclose his previous employment in Arohan and there is a specific instruction from the higher level that if he doesnt want to resign then he would be terminated from the job. Abhilash Pathak suggests Rajesh to put his resignation otherwise he has to terminate him from the job and in that case it will be a constraint for him to get further job. As there was no best option available to him other than resignation he has put his resignation on 26th August 2011. However still now it is a mystery for Rajesh how it had been revealed that he was in Arohan before joining Samridi.
* MFIN (Micro Finance Institutions Network) is the self-regulatory organization for the Indian Microfinance industry.

Draft Copy of Arohans Appointment Letter

Annexure - I

Name Address

Date:

Dear Name,

With reference to the discussions you had with us earlier, I am glad to inform you that you have been found suitable for a position with Arohan Financial Services Limited (hereinafter the Company), a company registered under the Companies Act, 1956 with its Head Office situated at Kolkata.

The Company is pleased to offer you position. You will be attached to our . Office, ... You will be on probation for a period of six months. After satisfactory completion of your probation, the Company may confirm your services specifying place of posting. The probation period can be extended at the sole discretion of company. This offer remains valid only if you join duty on or before date, year. The terms and conditions of your appointment are appended below: 1. You will receive a Basic Salary of Rs. .. per month. 2. In addition you would be entitled to a House Rent Allowance of 40% of your basic salary. 3. You will be entitled to a Conveyance Allowance of 10% of your basic salary, to cover cost of all such travel, for which it may not be possible to raise a travel expense bill. 4. You would be entitled to a Medical Allowance of 10% of your basic salary. 5. You would also be entitled to Mobile Phone Allowance of Rs. .. per month. 6. As the Company believes in professional growth of individuals working with it, you will be entitled to a Professional Development Allowance to the extent of 20% of your basic salary, towards purchase of books, periodicals, journals, attending professional training programs, and membership of professional associations.

7. You will be entitled to a Leave Travel Allowance to the extent of 10% of your basic salary in a block of two years, with concession in accordance with the provisions of the Income Tax Act applicable at the time of taking the leave. 8. The Company would make required contributions for the Provident Fund (12% at present) and for the Employees State Insurance (4.75% at present for people with a gross monthly salary less than Rs.10,000/- only), as per the provisions of the law. You are also required to make an equal contribution to your EPF, which will be deducted, from your monthly salary. These contributions are subject to change as per the directives from the Government. 9. The Company will make deductions for Income Tax, and any other tax as may be required by law including for all non-exempt allowances, professional tax, provident fund and any other deductions, as applicable, at source at the time of payment of salary. 10.The Company plans to have a Gratuity Scheme. You will be entitled to payment of gratuity at the time of severance of your services from the company. Gratuity is payable after completion of at least five years of continuous services. It will be paid at the rate of 15 days of last salary drawn, for every year of service completed with the company. 11.You will be on probation for a period of six months, during which period your services can be terminated at a notice of one month. You may resign from the services of the Company on the same terms. 12.After satisfactory completion of your probation, the Company may confirm your services specifying place of posting. The probation period can be extended at the sole discretion of the Company. 13.Upon confirmation of service, the period of notice for severance will be three months. The Company may terminate your services by giving three months notice or salary in lieu thereof. You may resign from the services of the Company on the same terms. 14.Upon the termination of your employment you will return to the Company all papers and documents, which may at that time be in your possession relating to the business or affairs of the Company or any extracts there from. You will also refrain from divulging in any manner, any information pertaining to the affairs of the Company to any outside persons or organizations. 15.You will be eligible for performance pay after completion of your probation period as per the companys policy. 16.You will abide by the service conditions of the Company as in force from time to time.

17.You will carry fiduciary responsibility on behalf of the company and towards this will sign covenants of fidelity and application of due diligence, as required by the Company. 18.You will, at all times during your employment, devote your whole time and attention to the business of the Company. You will not be entitled to accept, whether directly or indirectly, any part-time or other assignment, job or business of any kind whatsoever, so long as you are in the employment of the Company. 19.Your services are transferable to the Branches or other offices of the Company or any of its associated organizations, within the territory of the Indian Union and due to this transfer your service conditions will not be affected. The Company may assign you different responsibilities from time to time and may change your designation, job description and place of work at its sole discretion. 20.The age for superannuation is 60 years. 21.Any amendments in this appointment letter are valid only if given to you in writing under the signature of the undersigned, or an officer duly authorized by the Company. If you are agreeable to the aforesaid terms and conditions, please return the duplicate copy of this letter with your signature at the bottom of each page, signifying your acceptance.

We welcome you to Arohan! Yours sincerely,

Sachin Kumar GM Human Resource

I accept the terms and conditions as specified above and in token thereof, affix my signature at the bottom of each page of this appointment letter.

Date:

Place:

Signature & Name