My employer wants me to sign an indemnity bond in lieu of the increment and promotion. This has not been mentioned at the time of joining (one year back). They have promised me an increment after six months, but now, after one year, they are offering a handsome increment of 30% only when I sign the indemnity agreement, which is modifying the terms of appointment. The notice period has been increased from 1 month to three months. I want to know if the bond has any legal implications on me if I leave the job abruptly after signing it for the increment. The indemnity bond is made on a ₹100 stamp paper. They have mentioned that in case of breach of the indemnity bond, I have to pay three months' salary + ₹150,000 + 12% tax from the date of breaching the bond. Please tell me how I can deal with the situation as I need the increment but also do not want to be stuck with the bond. I also want to know the legal implications on me if I break the indemnity bond.
From India, New Delhi
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From India, New Delhi
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Hello Ashisn,
The answer is straightforward and simple: You can't have the cake and eat it too! You need to make a choice—no doubt, a tough one—but nevertheless, that needs to be made. What the company seems to be doing by this step is to judge whether you can be depended upon for a long-term association or not. That's from their perspective.
However, going by the terms you mentioned, it doesn't seem to adhere to logic or law since three months' salary is understandable, but the additional 1.5 L + 12% Service Tax may not be sustainable under law or logic. This suggests one thing: that you may have conveyed both that you are capable (and the company doesn't want to lose you) and that you are soft and pliable (due to which the company can put across such a bond for your approval).
Since you haven't mentioned your background—position, area, etc.—it's tough to mention regarding the options open to you now if you want to say no to the raise (and consequently the bond).
Regards,
TS
From India, Hyderabad
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1650The answer is straightforward and simple: You can't have the cake and eat it too! You need to make a choice—no doubt, a tough one—but nevertheless, that needs to be made. What the company seems to be doing by this step is to judge whether you can be depended upon for a long-term association or not. That's from their perspective.
However, going by the terms you mentioned, it doesn't seem to adhere to logic or law since three months' salary is understandable, but the additional 1.5 L + 12% Service Tax may not be sustainable under law or logic. This suggests one thing: that you may have conveyed both that you are capable (and the company doesn't want to lose you) and that you are soft and pliable (due to which the company can put across such a bond for your approval).
Since you haven't mentioned your background—position, area, etc.—it's tough to mention regarding the options open to you now if you want to say no to the raise (and consequently the bond).
Regards,
TS
From India, Hyderabad
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Dear Sir,
Thank you for the reply.
I am working in a software development company in Delhi as an Assistant Manager of Operations. I am concerned about the legal implications on me if I sign it now and abruptly break it or try to break it. Kindly reply.
From India, New Delhi
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Thank you for the reply.
I am working in a software development company in Delhi as an Assistant Manager of Operations. I am concerned about the legal implications on me if I sign it now and abruptly break it or try to break it. Kindly reply.
From India, New Delhi
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Hello Ashisn,
If you are in the software industry, you should have no major problems in getting another job. But, as the terms exist, it's not worth signing up, since they are quite illogical. Bonds, in general, are illegal. Here, the company seems to be taking you for a ride. Please note that Service Tax [if that is what the 'tax' means] is unheard of in such situations -- it only applies to services rendered by CORPORATES/ENTITIES.
I would suggest looking for another ethical and fair company and making the jump. Until then, if you want to buy time, tell them that you need to discuss the terms and conditions with your parents.
Let's wait to see what others have to say.
Regards,
TS
From India, Hyderabad
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If you are in the software industry, you should have no major problems in getting another job. But, as the terms exist, it's not worth signing up, since they are quite illogical. Bonds, in general, are illegal. Here, the company seems to be taking you for a ride. Please note that Service Tax [if that is what the 'tax' means] is unheard of in such situations -- it only applies to services rendered by CORPORATES/ENTITIES.
I would suggest looking for another ethical and fair company and making the jump. Until then, if you want to buy time, tell them that you need to discuss the terms and conditions with your parents.
Let's wait to see what others have to say.
Regards,
TS
From India, Hyderabad
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Indemnity Bond - Format.doc