INTRODUCTION
Exit documentation is often viewed as a simple administrative task, marking the end of an employment relationship. However, it serves a much more important purpose. These documents not only record the terms of separation but also influence how others perceive an employee's professional reputation in the future. Poorly written or careless language in exit letters can lead to serious legal and reputational issues for both the employer and the employee.
This makes it important for employers to be careful and precise, especially when stating the reasons for termination. Private companies in India usually have the right to terminate employees without stating a cause. However, this freedom does not allow them to include unfounded or defamatory statements.
In a significant judgment1 underscoring the importance of preserving an employee's professional dignity, the Delhi High Court has held tech giant Wipro liable for civil defamation after it included unsubstantiated and stigmatic language in a former employee's termination letter. This article will discuss this particular case and key points for employers to consider while preparing exit documentation.
BACKGROUND
The petitioner worked at Wipro from 2018 to 2020. He challenged the contents of his termination letter dated 5 June 2020, which called his conduct “malicious” and mentioned a “complete loss of trust” in the employer-employee relationship. The petitioner argued that these statements were harmful to his reputation and sought compensation as well as the removal of the offending content. In reply, Wipro denied any responsibility, claiming that the remarks were not “published” or shared with third parties. The company also pointed to the petitioner's supposed lack of professional commitment, mentioning previous warnings and a Performance Improvement Plan (PIP) that came before his termination.
KEY OBSERVATIONS
Based on the facts and circumstances, the court made the following observations:
- No credible evidence to show poor performance: The Court found that Wipro's allegations in the termination letter were directly contradicted by internal performance reports, which consistently described the petitioner as a high-performing and competent employee. With no credible defence presented by Wipro, the Court ruled that the accusations were demonstrably false and defamatory.
- “Publication” of remarks: Here, the court held that in the context of employment, where a former employee is compelled to share a termination letter with prospective employers, the original author of the letter (Wipro, in this case) cannot claim that the remarks were not published. The Court emphasized that such disclosure is not just foreseeable but inevitable, especially during background checks or reference verifications.
- Reputational damage: The court observed that the use of the term “malicious conduct” in the termination letter, without substantiation, inflicted reputational damage on the petitioner and jeopardized his future employability.
Accordingly, the court awarded the employee compensatory damages for the reputational harm caused and directed Wipro to remove the defamatory language in the original termination letter and issue a fresh termination letter, free of defamatory content.
POINTS FOR ORGANIZATIONS
Based on the ruling in the case, here are the key takeaways for organizations to consider while preparing exit documentation:
- Avoid unsubstantiated remarks: Avoid using any negative language or remarks in cases where termination of employment is without cause as the same may be legally challenged and struck down if there is an inadequacy of evidence to prove the veracity of such negative language.
- Assume foreseeable disclosure: As highlighted by the court, employees will be required to submit their exit documentation to a prospective employer, especially during background checks. Hence, subject to a lack of a disciplinary inquiry, maintain a neutral tone in the exit documentation and avoid making any adverse remarks.
- Consistency with internal records and documentation: Ensure that any adverse remarks, if necessary, made to the exit documentation align with the internal record showing evidence that led to the adverse remarks.
CONCLUSION
The Wipro case serves as a clear reminder that exit documentation is not just a formality but a legally significant record with real-world effects. Employers must find a careful balance between protecting their interests and respecting an employee's right to dignity and reputation. By making sure that termination letters are based on facts, neutral, and free from unsupported claims, organizations can maintain fairness while steering clear of unnecessary legal disputes.
Footnote
1. Abhijeet Mishra vs Wipro Limited, 2025:DHC:5253
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
