Hi All,
I signed a 3-year service bond with the company (Automobile) for which I work as an Assistant Manager. The bond is on a 100 Rs. stamp paper. It involves providing technical training abroad (at the Parent company) in a specific area. However, upon reaching the actual location, I discovered that it's essentially about supplying manpower to the parent company, or one could say it's operator training in disguise. This training is intended for operators, not managers, as individuals from other countries receiving the same training are all operators, information which the company concealed from me. Now, the issue is that I signed the bond for the stated technical training, not for operator training. I informed the company about this discrepancy, but they are pressuring me to finish the training, threatening to jeopardize my career if I don't comply.
Nonetheless, there is only one month remaining for the training to be completed. My question is, if I leave before or after completing the training, what actions can they take against my career?
1. Can they take legal action against me for recovery?
From Japan, Iwata
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I signed a 3-year service bond with the company (Automobile) for which I work as an Assistant Manager. The bond is on a 100 Rs. stamp paper. It involves providing technical training abroad (at the Parent company) in a specific area. However, upon reaching the actual location, I discovered that it's essentially about supplying manpower to the parent company, or one could say it's operator training in disguise. This training is intended for operators, not managers, as individuals from other countries receiving the same training are all operators, information which the company concealed from me. Now, the issue is that I signed the bond for the stated technical training, not for operator training. I informed the company about this discrepancy, but they are pressuring me to finish the training, threatening to jeopardize my career if I don't comply.
Nonetheless, there is only one month remaining for the training to be completed. My question is, if I leave before or after completing the training, what actions can they take against my career?
1. Can they take legal action against me for recovery?
From Japan, Iwata
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Continued...
1. What is the process for the refund of the bond amount (Rs 5 lakhs) and how long does it take to resolve issues like this?
2. If they don't file the case, what options do they have? For example, not providing me with a relieving letter, etc.
3. The most crucial aspect is how I can navigate this situation without getting involved in any legal processes. In my field of expertise, individuals are acquainted with each other, and such a situation could leave a negative impression on potential employers. Please suggest a way out.
Thank you.
From Japan, Iwata
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1. What is the process for the refund of the bond amount (Rs 5 lakhs) and how long does it take to resolve issues like this?
2. If they don't file the case, what options do they have? For example, not providing me with a relieving letter, etc.
3. The most crucial aspect is how I can navigate this situation without getting involved in any legal processes. In my field of expertise, individuals are acquainted with each other, and such a situation could leave a negative impression on potential employers. Please suggest a way out.
Thank you.
From Japan, Iwata
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Sub-Service Bond
Since you have served almost the bond period with only one month remaining, it is better for you to complete that one month. In that case, you will be discharged from the bond, and thereafter, even if you leave the service, you need not pay the bond amount if it is linked only for the three-period. Otherwise, they may create problems of relieving and probably resort to legal action for the recovery of the bond amount for the breach of the bond.
B. Saikumar
HR & Labour Law Consultant
Chipinbiz Consultancy Pvt. Ltd.
Mumbai
Tel: 022-28324234
From India, Mumbai
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57Since you have served almost the bond period with only one month remaining, it is better for you to complete that one month. In that case, you will be discharged from the bond, and thereafter, even if you leave the service, you need not pay the bond amount if it is linked only for the three-period. Otherwise, they may create problems of relieving and probably resort to legal action for the recovery of the bond amount for the breach of the bond.
B. Saikumar
HR & Labour Law Consultant
Chipinbiz Consultancy Pvt. Ltd.
Mumbai
Tel: 022-28324234
From India, Mumbai
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Dear Mr. Saikumar,
I have the following doubts:
1. Is the bond between the employer and employee legally accepted?
2. Does the employer have the right to collect original documents (education certificates, passports, etc.) from the employee?
Regards,
Kumar M.
From India, Visakhapatnam
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I have the following doubts:
1. Is the bond between the employer and employee legally accepted?
2. Does the employer have the right to collect original documents (education certificates, passports, etc.) from the employee?
Regards,
Kumar M.
From India, Visakhapatnam
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Sub-service bond
A bond is a contract under Sec. 2(h) of the Indian Contract Act between the employee and the employer and is enforceable under Sec. 74 of the said Act whereby the employee agrees to render himself liable to pay a certain sum stipulated in the bond in case of breach of any obligation under the bond. So far as the retention of educational certificates is concerned, it is better to consult an advocate for proper guidance.
B. Saikumar HR & Labour Law Consultant Chipinbiz Consultancy Pvt. Ltd. Mumbai.
From India, Mumbai
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A bond is a contract under Sec. 2(h) of the Indian Contract Act between the employee and the employer and is enforceable under Sec. 74 of the said Act whereby the employee agrees to render himself liable to pay a certain sum stipulated in the bond in case of breach of any obligation under the bond. So far as the retention of educational certificates is concerned, it is better to consult an advocate for proper guidance.
B. Saikumar HR & Labour Law Consultant Chipinbiz Consultancy Pvt. Ltd. Mumbai.
From India, Mumbai
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Sub-service bond
Since the bond does not involve any transaction of sale or purchase of any property or asset or transfer of any property or asset, I do not think it requires any registration except executing on a stamped paper of appropriate value. However, a civil lawyer will be in a better position to reply.
B. Saikumar
HR & Labour Law Consultant
Chipinbiz Consultancy Pvt. Ltd
Mumbai
022-28324234
From India, Mumbai
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Since the bond does not involve any transaction of sale or purchase of any property or asset or transfer of any property or asset, I do not think it requires any registration except executing on a stamped paper of appropriate value. However, a civil lawyer will be in a better position to reply.
B. Saikumar
HR & Labour Law Consultant
Chipinbiz Consultancy Pvt. Ltd
Mumbai
022-28324234
From India, Mumbai
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Dear Sirs,
Thank you for the reply. The bond period is 3 years after completion of the training, and the training period itself is 6 months, during which I have completed 5 months of training. Effectively, 3 years and 1 month remain, and I would not like to serve that company for the remaining period.
Additionally, I have some concerns regarding the bond documents I signed, which I believe are seriously flawed:
1. They made me sign a bond originally intended for a different field of expertise. The first and second pages discuss training in those specified fields, not in my field of expertise.
2. The bond is one-way as it only addresses the company's interests, not the executant's.
Regards
From Japan, Iwata
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Thank you for the reply. The bond period is 3 years after completion of the training, and the training period itself is 6 months, during which I have completed 5 months of training. Effectively, 3 years and 1 month remain, and I would not like to serve that company for the remaining period.
Additionally, I have some concerns regarding the bond documents I signed, which I believe are seriously flawed:
1. They made me sign a bond originally intended for a different field of expertise. The first and second pages discuss training in those specified fields, not in my field of expertise.
2. The bond is one-way as it only addresses the company's interests, not the executant's.
Regards
From Japan, Iwata
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Dear Bond 3 These type of agreement are not valid in india.you can leave the organisation and employer can not take any action against you. please go through the attachment
From India, Delhi
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From India, Delhi
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Dear,
These types of bonds are not valid in a court of law. Section 27 of the Indian Contract Act states that "Every agreement by which any one is restrained from exercising a lawful profession, trade, or business of any kind is to that extent void." It means these types of bonds are void. Secondly, holding someone is a criminal offense under the Criminal Procedure Code for holding someone's property with dishonest intention.
I have the following doubts:
1. Is a bond between an employer and an employee legally accepted?
2. Does an employer have the right to collect original documents (education certificates, passports, etc.) from an employee?
Regards,
Kumar.M
From India, Delhi
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These types of bonds are not valid in a court of law. Section 27 of the Indian Contract Act states that "Every agreement by which any one is restrained from exercising a lawful profession, trade, or business of any kind is to that extent void." It means these types of bonds are void. Secondly, holding someone is a criminal offense under the Criminal Procedure Code for holding someone's property with dishonest intention.
I have the following doubts:
1. Is a bond between an employer and an employee legally accepted?
2. Does an employer have the right to collect original documents (education certificates, passports, etc.) from an employee?
Regards,
Kumar.M
From India, Delhi
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Mr. Malik,
Firstly, I thank you for the very informative article on negative covenants. There is no dispute that any contract restraining an employee from employing himself after leaving the company is void as it violates Sec. 27 of the Indian Contract Act. As far as the other queries are concerned, please refer to my earlier reply.
B. Saikumar
HR & Labour Law Consultant
Chipinbiz Consultancy Pvt. Ltd
Mumbai
Tel: 022-28324234
From India, Mumbai
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Firstly, I thank you for the very informative article on negative covenants. There is no dispute that any contract restraining an employee from employing himself after leaving the company is void as it violates Sec. 27 of the Indian Contract Act. As far as the other queries are concerned, please refer to my earlier reply.
B. Saikumar
HR & Labour Law Consultant
Chipinbiz Consultancy Pvt. Ltd
Mumbai
Tel: 022-28324234
From India, Mumbai
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I am afraid that the issue has been sidelined. What the law states is that there shall not be a restraint of trade, business, etc., under S.27 of the Contract Act, 1872. However, it is with regard to doing business, trade, etc., but not with regard to an agreement for the recovery of the bond amount.
Further, there are also many judgments which state that reasonable restrictions/conditions on employees in terms of their employment are valid. Even government service also contains such service conditions, and if a probationer or trainee leaves the organization within a stipulated time (say one year to five years), the expenditure incurred and salary paid to him would be recovered.
From India, Madras
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Further, there are also many judgments which state that reasonable restrictions/conditions on employees in terms of their employment are valid. Even government service also contains such service conditions, and if a probationer or trainee leaves the organization within a stipulated time (say one year to five years), the expenditure incurred and salary paid to him would be recovered.
From India, Madras
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Dear Murali,
No doubt, a bond is enforceable in law for the recovery of damages set forth therein for any breach of it by the employee. However, if the bond stipulates that the employee cannot join any other employer even after leaving the service of the company, that is violative of Sec.27 of the Contract Act because the scope of carrying business and trade includes one's right to pursue one's career. This was made clear by a plethora of judgments on the subject since it is squarely in conflict with sec.27 of the Contract Act and Art. (19) and (21) of the Constitution, which means it is unreasonable.
B. Saikumar HR & Labour Law Consultant Chipinbiz Consultancy Pvt. Ltd Mumbai 022-28324234
From India, Mumbai
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No doubt, a bond is enforceable in law for the recovery of damages set forth therein for any breach of it by the employee. However, if the bond stipulates that the employee cannot join any other employer even after leaving the service of the company, that is violative of Sec.27 of the Contract Act because the scope of carrying business and trade includes one's right to pursue one's career. This was made clear by a plethora of judgments on the subject since it is squarely in conflict with sec.27 of the Contract Act and Art. (19) and (21) of the Constitution, which means it is unreasonable.
B. Saikumar HR & Labour Law Consultant Chipinbiz Consultancy Pvt. Ltd Mumbai 022-28324234
From India, Mumbai
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Dear Sai Kumar,
I concur with you on all points. I just wanted to reply to the recovery portion of the question. As far as his joining another company may not be legally restrained by the present employer, I feel his jumping bond would affect him more than benefit him. The querist explained that in his field, everyone knows each other and where he is employed. Hence, I feel that it would be better for him to convince his current employer to release him by reaching an amicable agreement.
From India, Madras
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I concur with you on all points. I just wanted to reply to the recovery portion of the question. As far as his joining another company may not be legally restrained by the present employer, I feel his jumping bond would affect him more than benefit him. The querist explained that in his field, everyone knows each other and where he is employed. Hence, I feel that it would be better for him to convince his current employer to release him by reaching an amicable agreement.
From India, Madras
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Dear Murali You are right. it is better to resolve the issue through dialogue and amicable means an dendorse your view. B.Saikumar
From India, Mumbai
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From India, Mumbai
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Dear Malik Sir,
Thank you for the reply. I have gone through this document; it talks about the contract validity after the termination of the period or services. However, I am still under the said bond period. If I leave the job, what actions can the company take as they have the legal rights to recover the amount spent on the disputed training (as it was simply a manpower supply observed by me)?
Please guide me in this direction.
From Japan, Iwata
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Thank you for the reply. I have gone through this document; it talks about the contract validity after the termination of the period or services. However, I am still under the said bond period. If I leave the job, what actions can the company take as they have the legal rights to recover the amount spent on the disputed training (as it was simply a manpower supply observed by me)?
Please guide me in this direction.
From Japan, Iwata
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Dear Malik Sir,
Thank you for the reply. I have gone through this document, and it discusses the contract's validity after the termination of the period or services. However, I am still under the said bond period. If I leave the job, what actions can the company take as they have the legal rights to recover the amount spent on the disputed training (as it was simply a manpower supply observed by me)?
Please guide me in this direction.
From Japan, Iwata
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Thank you for the reply. I have gone through this document, and it discusses the contract's validity after the termination of the period or services. However, I am still under the said bond period. If I leave the job, what actions can the company take as they have the legal rights to recover the amount spent on the disputed training (as it was simply a manpower supply observed by me)?
Please guide me in this direction.
From Japan, Iwata
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Dear Malik Sir,
Thank you for the reply. I have gone through this document, and it talks about the contract validity after the termination of the period of services. However, I am still under the said bond period. If I leave the job, what actions can the company take as they have the legal rights to recover the amount spent on the disputed training (as it was simply a manpower supply observed by me)?
Please guide me in this direction.
From Japan, Iwata
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Thank you for the reply. I have gone through this document, and it talks about the contract validity after the termination of the period of services. However, I am still under the said bond period. If I leave the job, what actions can the company take as they have the legal rights to recover the amount spent on the disputed training (as it was simply a manpower supply observed by me)?
Please guide me in this direction.
From Japan, Iwata
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Thank you all.
Dear Murali sir,
As you said, they can recover the money, but I can prove that it was done intentionally. Before leaving India, I had different learning targets. When I went to the actual place and protested to the Indian management regarding this cheating, they drastically reduced the target.
The thing is, it's very difficult to persuade them as they won't let me go because:
1. Everybody knows this issue in the company, and it's about their prestige as well.
2. They have qualified manpower, and no one wants to lose that.
So, if they do not agree, what can I do to get rid of that company? I do not want to serve even a single day there.
Regards
From Japan, Iwata
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Dear Murali sir,
As you said, they can recover the money, but I can prove that it was done intentionally. Before leaving India, I had different learning targets. When I went to the actual place and protested to the Indian management regarding this cheating, they drastically reduced the target.
The thing is, it's very difficult to persuade them as they won't let me go because:
1. Everybody knows this issue in the company, and it's about their prestige as well.
2. They have qualified manpower, and no one wants to lose that.
So, if they do not agree, what can I do to get rid of that company? I do not want to serve even a single day there.
Regards
From Japan, Iwata
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Confrontation is not always good. Think about long-term goals. Do you think any other company would take on an employee who has entered into litigation or filed a case against their previous employer? Or for that matter, would any company hire an employee who has breached a bond or service condition? How can a new employer believe that you won't do the same to them? Can an employer handle a querulous employee?
So, confrontation or litigation is not a good solution. It will tarnish your credibility and prospects of getting new job opportunities. Even if you hide these things, they will constantly haunt you, knowing that one day they may come to light.
Think calmly. It appears that you are set in your decision not to work for the company. However, have a calm discussion with the company's HR management and try to negotiate an honorable exit. If the company's reputation is also at stake, they may consider an amicable settlement.
All the best.
From India, Madras
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So, confrontation or litigation is not a good solution. It will tarnish your credibility and prospects of getting new job opportunities. Even if you hide these things, they will constantly haunt you, knowing that one day they may come to light.
Think calmly. It appears that you are set in your decision not to work for the company. However, have a calm discussion with the company's HR management and try to negotiate an honorable exit. If the company's reputation is also at stake, they may consider an amicable settlement.
All the best.
From India, Madras
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Dear Murali Sir,
Thank you for the reply. I will try to resolve this matter amicably first, but in case they become adamant on Rs 5 lakhs for relieving me, what actions can the company take and what can I do? As the breach of service terms is from the company's side.
Regards
From Japan, Iwata
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Thank you for the reply. I will try to resolve this matter amicably first, but in case they become adamant on Rs 5 lakhs for relieving me, what actions can the company take and what can I do? As the breach of service terms is from the company's side.
Regards
From Japan, Iwata
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Hello all,
I am an employment contract with my company. The contract was made on white paper. No stamp paper or company letterhead was used for this contract. Now, if I have to leave the company, can the company take any legal action against me? If anybody wants to view this contract, I can send a scanned copy of the same.
Waiting for your expert reviews.
Thanks and regards,
Linesh Rane
From India, Pune
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I am an employment contract with my company. The contract was made on white paper. No stamp paper or company letterhead was used for this contract. Now, if I have to leave the company, can the company take any legal action against me? If anybody wants to view this contract, I can send a scanned copy of the same.
Waiting for your expert reviews.
Thanks and regards,
Linesh Rane
From India, Pune
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