Hi, all. I am an engineer who had joined a company (consultancy firm) in October, which has a bond for two years with a penalty pay of 3 lakh rupees. There wasn't any specialized training provided to me, only on the job training which was just overview of things and not much detailing. I now wish to leave the company since I want to remain in my core field and hence am planning a year drop to prepare for competitive exams. I would like to know about a few things as below: 1. The bond was made on stamp paper with a notary. Is the bond still enforceable? 2. If I am not willing to pay the bond amount, will I be able to get experience letter for 5 months? 3. The probation period is 6 months as stated in offer letter, and there is two months notice period for resigning after probation is over, so will my experience letter not be given due to probation. 4. If the bond is enforceable, will I have to pay the full amount? 5. If they refuse to provide experience letter, can I take a legal action against them even if I break the bond? I desperately took the job initially because being a fresher I wanted to explore the field of work different from mine. But seeing lack of technical learning there I want to leave the job and take a drop to prepare for competitive exams. Hence please guide me how to proceed.
1) if you leave the organisation your employer would seek to recover the bond amount from you
2) company would not give you experience letter if you fail to pay bond amount
3) you don’t have to pay full amount of Rs 3 lakhs only for the shortfall period
4) if company sues you take the defence no training was provided to you
5) litigation is long drawn and experience proposition
1) No its not compulsory to serve the Bond period or pay the amount to the company.
2) You can leave the job for better prospectus of you hight study and secondly company has not provided any specialization training on the job.
3) You are still in probation phase so you can leave the job and you will be not get experience certificate unless you pay them bond amount.
4) No, you can't force them to give experience certificate than you have to follow bond procedure which you have signed at the time of entering in agreement.
1. Yes the bond is enforceable the company can file a suit claiming the bond amount.
2. They shall not give experience letter and can proceed against you in the court.
3. Yes and company shall ask to clear dues before.
4. It can he contested before the court on actual damages ground.
5. You can seek the experience letter. Try to settle with the company serve some notice period so that you get to exit without payment of bond amount and there is no suit filed by the company.
1. Such bond is even valid even if it was not done on stamp paper . So this is very much valid.
2. If you ed not comply the terms of the bond then you may not get the release letter or the experience letter.
3. Yes if the terms of the bond is strictly followed.
4. Yes
5. No, you can not.
6. Talk to them and resolve amicably. You do not have much options except to make them understood your predicament.
1. It still stands.
2.This depends on the company to company some companies helping the employees and some becomes anger when a good employee leave them.
3. Probation period is not hurdle, if you are complying terms and conditions of the offer letter.
4. You are under probation, hence please comply only the terms and conditions of the offer letter, bond will come in force after the end of probation period.
5. Yes if they don't issue the same please move an application to the labour department.
The terms of the bond were are as follows as in quotation below: " In the event the employee commits a material breach of this bond, the employee shall be liable to pay a sum of Rs. 300000 only. It is hereby agreed and declared that the loss that will be suffered by the employer on this account cannot be ascertained in terms of money and the sum calculated as aforesaid is reasonable compensation for the breach that may be caused by the employee." Is this a one sided bond? And how should I convince by boss to relieve me without having to pay the bond amount?
See you need to talk on your level as most of.companies though doesn't go on legal cases as they know.court award only the actual damages though if you talk out with company and ready to one month salary then they can relieve you along with experience letter though it will depend on company to company.
1) frankly employer would not relieve you unless you pay the bond money
2) as mentioned earlier since you have already worked for 5 months said prior has to be taken into account to determine amount payable by you
3) further employer has to prove that it has spent money on your training to recover the bond money claimed
1) if you leave within the bond period, you must pay the amount.
2)One problem will be that, it will be difficult to get experience letter and employment relieved letter which is actually asked for by various companies, when you join them, as a documentary evidence.
Hi,
The bond is enforceable and you may land into trouble if the company takes legal action against you. It is suggested that you try to show the default of the company due to which you are compelled to leave the company and the company should pay the compensation for violating the terms and conditions of employment. It is suggested that your read each and every bit of agreement which the company might not be giving everything which is mentioned in the agreement.
- The employment bond is considered reasonable as it is necessary to protect the interest of the employer.
- But theis employment bond should be “reasonable” and “necessary” to safeguard the interests of the employer.
- The employee cannot be compelled to work for any employer by enforcing the employment bond.
- In the event of a breach of contract by the employee, the only remedy available to the employer is to obtain a reasonable compensation amount.
- Since, you have already work for the notice period as stipulated in the bond signed by , then further more than this period , the employeer cannot force .
1.Yes, this bond is enforceable.
2. Natually , you will not get any experience letter , if you are going to leave the company against them.
3. As per law , the employer can recover the amount of loss incurred due to your resignation, but not the amount of declearion mentioned in the bond as it is one sided bond.
Hello,
Your employee cannot force you to enter into such bond and in case you leave the company you cannot be sue for breach of contract .
Regards
Normally in India companies don't challenge it unless they have invested in you in lakhs.you dint have to worry. If they create litigation then you have to contest it.
1. The bond is nothing but contract which is enforceable even if it is not on stamp paper and is not notarised. The contract may be one sided but once you have signed on the dotted line you are bound by it.
2. The company will not issue the experience letter if you do not honour the contract.
3. The company can file a suit in the civil court to recover liquidated damages of 3 lakhs with interest and cost of litigation from you, which will be a slur on your profile and hamper career prospects.
4, No successful legal action can be brought by you against the employer for issue of experience letter if you do not serve the notice period.
Under the Indian Law, the employment agreements with negative covenants is valid and legally enforceable if the parties agree with their free consent i.e. without fraud, coercion, undue influence, mistake and misrepresentation. ... Indian law mandates the employment bonds to be “reasonable” in order to be valid.
The Indian courts have held that in the event of a breach of contract by the employee, the employer shall be entitled to recover damages only if a considerable amount of expenditure was borne by the employer. Indian law mandates the employment bonds to be “reasonable” in order to be valid. The term reasonable remains undefined anywhere in the Indian law and therefore the courts have given meaning to “reasonable” depending upon the facts and circumstances of the cases. The proposition which has emerged till now is that conditions stipulated in the contract should be necessary to protect the interest of the employer and compensate the loss caused by breach of contract. Additionally, the penalty or compulsory employment period stipulated should not exorbitant.
As per the mandate of Section 27, any terms and conditions of an agreement which directly or indirectly compels the employee to serve the employer or puts a restriction on them joining the competitor or other employer is not valid under the Indian law, The employee has right to resign from the employment even if he has agreed in the employment bond to serve the employer for a specific period of time.
The court considers the actual expenses incurred by the employer, the period of service by the employee, the conditions stipulated in the contract to determine the loss incurred by the employer to arrive at reasonable compensation amount. In the case of Sicpa India Limited v. Shri Manas Pratim Deb, The plaintiff had incurred expenses of Rs. 67, 595 while imparting training to the defendant in respect of which an employment bond was executed for which the defendant had agreed to serve the plaintiff for a period of three years or to make a payment of Rs. 200,000. After serving for two years, the employee left the company. The court determined reasonable amount as Rs. 22, 532. The court took into consideration the total expenses incurred by the employer and employee’s period of service while deciding the amount.
You can initiate proper legal action if the employer fails to provide the relieving letter or any other dues to you
The court considers the actual expenses incurred by the employer, the period of service by the employee, the conditions stipulated in the contract to determine the loss incurred by the employer to arrive at reasonable compensation amount. In the case of Sicpa India Limited v. Shri Manas Pratim Deb, The plaintiff had incurred expenses of Rs. 67, 595 while imparting training to the defendant in respect of which an employment bond was executed for which the defendant had agreed to serve the plaintiff for a period of three years or to make a payment of Rs. 200,000. After serving for two years, the employee left the company. The court determined reasonable amount as Rs. 22, 532. The court took into consideration the total expenses incurred by the employer and employee’s period of service while deciding the amount.