Hi, Am an HR in a small organization there are only 5 people so we are not issuing any payslips for the employee and we are issuing only appointment letter.
An employee in my organization joined on 1st June 2012. Still, she is in the probationary period of six months,s and she have applied for resignation on 12th October 2012. MD accepted the resignation and asked her to complete all the work immediately now she serving her notice period only for 18days..
As per the appointment letter, these are the terms & conditions for the employee.
1. Bond for one year and probation for six months.
2. If they have left the service during the bond period they have to pay a two months salary in lieu of the signed bond.
3. Notice period for 30 days.
The resignation has been accepted now she is asking for a relieving letter & payslips immediately.
She has drawn a Rs.9300/- in his previous company and got an appraisal Rs.12000/- she has never submitted his appraisal letter from his previous company still. Now her drawn salary is Rs.15K…. We have to collect the two-month salary for breaking the bond.
Please clarify what to do in this situation.
From India, Madras
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An employee in my organization joined on 1st June 2012. Still, she is in the probationary period of six months,s and she have applied for resignation on 12th October 2012. MD accepted the resignation and asked her to complete all the work immediately now she serving her notice period only for 18days..
As per the appointment letter, these are the terms & conditions for the employee.
1. Bond for one year and probation for six months.
2. If they have left the service during the bond period they have to pay a two months salary in lieu of the signed bond.
3. Notice period for 30 days.
The resignation has been accepted now she is asking for a relieving letter & payslips immediately.
She has drawn a Rs.9300/- in his previous company and got an appraisal Rs.12000/- she has never submitted his appraisal letter from his previous company still. Now her drawn salary is Rs.15K…. We have to collect the two-month salary for breaking the bond.
Please clarify what to do in this situation.
From India, Madras
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Dear Manju,
From the case cited above I presume there are lot of flaws from your company's end in the policies. The clause mentioned are not specific and precise. And in addition even your query is not clear. What is it that you would like to be guided upon??
Beginning from the end you have mentioned "She has drawn a Rs.9300/- in his previous company and got appraisal Rs.12000/- she has never submitted his appraisal letter from his previous company still. Now her drawn salary is Rs.15K….". What has her salary in previous organization to do now when she has put up her resignation. You should have verified her salary docs starting from her 1st salary to the appraised salary when she left her previous organization at the time you were to give her offer to join your organization. On what grounds did you offer her 15000??? Pl clarify.
Secondly, you said "As per the appointment letter these are the terms & conditions for the employee.
1. Bond for one year and probation for six months.
2. In they have leave the service during the bond period they have to pay a two months salary in lieu of the signed bond.
3. Notice period for 30 days."
Are you aware whether bond are really feasible. Keeping that aside if you've made a mutual agreement then why is it not mentioned clearly that one year will start from date of confirmation or from date of joining inclusive of 6 months probation i.e. a person is liable to serve only 6 months post confirmation. This clarity will not only help the company but also to employees and yourself.
If the employee in this quote is ready to pay penalty amount what is the issue. You have not mentioned that the employee is not agreeing to pay the amount. And is the notice period of 30 days for both probationary and confirmed employee??? Pl clarify.
If issuing a relieving letter is your concern then you should issue one as your MD has accepted 18 days notice in lieu of 30 days or instead of issuing relieving letter you can mention her DOJ and LWD in the F'n'F statement and tell her that yet your company does not have practice of issuing relieving letter of probationary employees.
Pay slips you must issue her that.
Still I suggest, if you mention your point of worry with more clarity it would help others to advice.
Regards,
Hiral
From India, Ahmedabad
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207From the case cited above I presume there are lot of flaws from your company's end in the policies. The clause mentioned are not specific and precise. And in addition even your query is not clear. What is it that you would like to be guided upon??
Beginning from the end you have mentioned "She has drawn a Rs.9300/- in his previous company and got appraisal Rs.12000/- she has never submitted his appraisal letter from his previous company still. Now her drawn salary is Rs.15K….". What has her salary in previous organization to do now when she has put up her resignation. You should have verified her salary docs starting from her 1st salary to the appraised salary when she left her previous organization at the time you were to give her offer to join your organization. On what grounds did you offer her 15000??? Pl clarify.
Secondly, you said "As per the appointment letter these are the terms & conditions for the employee.
1. Bond for one year and probation for six months.
2. In they have leave the service during the bond period they have to pay a two months salary in lieu of the signed bond.
3. Notice period for 30 days."
Are you aware whether bond are really feasible. Keeping that aside if you've made a mutual agreement then why is it not mentioned clearly that one year will start from date of confirmation or from date of joining inclusive of 6 months probation i.e. a person is liable to serve only 6 months post confirmation. This clarity will not only help the company but also to employees and yourself.
If the employee in this quote is ready to pay penalty amount what is the issue. You have not mentioned that the employee is not agreeing to pay the amount. And is the notice period of 30 days for both probationary and confirmed employee??? Pl clarify.
If issuing a relieving letter is your concern then you should issue one as your MD has accepted 18 days notice in lieu of 30 days or instead of issuing relieving letter you can mention her DOJ and LWD in the F'n'F statement and tell her that yet your company does not have practice of issuing relieving letter of probationary employees.
Pay slips you must issue her that.
Still I suggest, if you mention your point of worry with more clarity it would help others to advice.
Regards,
Hiral
From India, Ahmedabad
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Dear Ms. Manju,
The damages sought must be certain to the bonafide situation. As per your situation, an employer claiming practical distress as a result of losing the business would have to have clear evidence of this bureau distress. The non-breaching party also has a duty to mitigate any loss by attempting to minimize any damage.
One certain thing that when your management at prudence accepted the employee's resignation, she should be sanguinely giving her 30-day notice period as she was in her probationary period. Since she served for 18 days, she would be liable as good as breaching a contract with the employer. It does not really need for her to complete a year; hence the management agreed.
You may send out a letter to her stating the pros and cons of breaching the contract and the notice in lieu. Along with the clause mentioned in the offer to her. You may ask her to complete serving the period of resignation and relieve her services with the resignation letter and F&F.
From India, Visakhapatnam
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The damages sought must be certain to the bonafide situation. As per your situation, an employer claiming practical distress as a result of losing the business would have to have clear evidence of this bureau distress. The non-breaching party also has a duty to mitigate any loss by attempting to minimize any damage.
One certain thing that when your management at prudence accepted the employee's resignation, she should be sanguinely giving her 30-day notice period as she was in her probationary period. Since she served for 18 days, she would be liable as good as breaching a contract with the employer. It does not really need for her to complete a year; hence the management agreed.
You may send out a letter to her stating the pros and cons of breaching the contract and the notice in lieu. Along with the clause mentioned in the offer to her. You may ask her to complete serving the period of resignation and relieve her services with the resignation letter and F&F.
From India, Visakhapatnam
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Hi Manju,
According to the situation you have described in this case, I understand that your main concern is that the employee broke the bond, and now you wish to claim the two months' salary that the employee was liable to pay for breaking the bond.
First of all, I would like to inform you that bonds are illegal according to the Indian Penal Code. The Supreme Court of India has stated that no employee can be compelled to work against their will.
Attempting to extract money from the employee could land the company in legal trouble. Section 368 of the Indian Penal Code addresses extortion by threatening legal action. The minimum punishment under this provision is two years.
According to labor laws, any one-sided contract is not valid in court and is considered null and void.
Regarding the notice period, you can request the employee to complete it but cannot force them. Since she has formally resigned, her resignation has been accepted, and she is fulfilling her responsibilities before leaving. The notice period typically serves this purpose.
I hope your query has been addressed.
Nisha
From India, Delhi
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According to the situation you have described in this case, I understand that your main concern is that the employee broke the bond, and now you wish to claim the two months' salary that the employee was liable to pay for breaking the bond.
First of all, I would like to inform you that bonds are illegal according to the Indian Penal Code. The Supreme Court of India has stated that no employee can be compelled to work against their will.
Attempting to extract money from the employee could land the company in legal trouble. Section 368 of the Indian Penal Code addresses extortion by threatening legal action. The minimum punishment under this provision is two years.
According to labor laws, any one-sided contract is not valid in court and is considered null and void.
Regarding the notice period, you can request the employee to complete it but cannot force them. Since she has formally resigned, her resignation has been accepted, and she is fulfilling her responsibilities before leaving. The notice period typically serves this purpose.
I hope your query has been addressed.
Nisha
From India, Delhi
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Dear Manju,
Please understand that the bond term cannot be arbitrarily decided by the management on their own. It is only sustainable when you provide any training for which you actually spent a significant amount of money to raise the skill level of the employee. If you try to force the bond otherwise, not only shall it be illegal but it may also open a Pandora's Box upon you on the contrary. Since you have already accepted her resignation as evident in your query, it is imperative upon you to issue her the relieving letter if she gives a proper handover within the agreed time between the management and the employee. Just because an employee has signed a bond does not mean it becomes a valid and legal bond.
From India, New Delhi
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Please understand that the bond term cannot be arbitrarily decided by the management on their own. It is only sustainable when you provide any training for which you actually spent a significant amount of money to raise the skill level of the employee. If you try to force the bond otherwise, not only shall it be illegal but it may also open a Pandora's Box upon you on the contrary. Since you have already accepted her resignation as evident in your query, it is imperative upon you to issue her the relieving letter if she gives a proper handover within the agreed time between the management and the employee. Just because an employee has signed a bond does not mean it becomes a valid and legal bond.
From India, New Delhi
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Dear Ms. Manju,
Actually, you have no right to claim 2 months of salary from an employee for breaking a bond. REMEMBER the Supreme Court recently stated that illegal bonds are covered under the Bonded Labour Act, and the violating employer is liable to be prosecuted. Also, such illegal bonds amount to a violation of the IPC.
The notice period is only applicable as per the provisions of the Shop and Establishment Act and the Approved Standing Orders provisions.
Rajeesh
From India, Thrissur
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Actually, you have no right to claim 2 months of salary from an employee for breaking a bond. REMEMBER the Supreme Court recently stated that illegal bonds are covered under the Bonded Labour Act, and the violating employer is liable to be prosecuted. Also, such illegal bonds amount to a violation of the IPC.
The notice period is only applicable as per the provisions of the Shop and Establishment Act and the Approved Standing Orders provisions.
Rajeesh
From India, Thrissur
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Dear Nisha,
Please let me clarify two things here:
1. Do not confuse yourself between the Bonded Labour System, which is illegal in India, and the valid contract bond executed in lieu of any training provided to the employee by the employer.
2. The purpose of this contract bond is to recover the cost of such training that the employer incurred on the employee's training, as it is an investment from the employer to generate revenue, to which they are validly and legally entitled.
I am mentioning this link, and please read the experience of Rekha Bhanu on page 6 of the thread and decide for yourself. A bond is not illegal per se. You can break the bond, but you will have to pay the amount the employer spent on your training. It is a two-way system and not a one-sided agreement. Nobody is forcing you to work for a management, and if someone does, that is illegal. If the bond is legal, there is no need to worry about the consequences you mentioned.
https://www.citehr.com/423676-legali...anisation.html
From India, New Delhi
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Please let me clarify two things here:
1. Do not confuse yourself between the Bonded Labour System, which is illegal in India, and the valid contract bond executed in lieu of any training provided to the employee by the employer.
2. The purpose of this contract bond is to recover the cost of such training that the employer incurred on the employee's training, as it is an investment from the employer to generate revenue, to which they are validly and legally entitled.
I am mentioning this link, and please read the experience of Rekha Bhanu on page 6 of the thread and decide for yourself. A bond is not illegal per se. You can break the bond, but you will have to pay the amount the employer spent on your training. It is a two-way system and not a one-sided agreement. Nobody is forcing you to work for a management, and if someone does, that is illegal. If the bond is legal, there is no need to worry about the consequences you mentioned.
https://www.citehr.com/423676-legali...anisation.html
From India, New Delhi
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Hi,
In addition to all the great responses you have received, I would like to add a few points. By now, I'm sure you must have realized that you have to do away with the Bond clause in your appointment letter. You may like to take up the following tasks on an immediate basis:
a. Rethink your appointment letter and all the clauses. While doing so, ask yourself if these are ethical, practical, or one-sided - only favoring the management or employee too.
b. Begin with payslips immediately.
c. Make a checklist of essential documents to keep in all personnel files for future reference.
d. Lastly, sit with your MD to understand exactly what culture you wish to have in your organization and going forward, look at framing policies that will encourage this.
Regards,
Richard
From India, Mumbai
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In addition to all the great responses you have received, I would like to add a few points. By now, I'm sure you must have realized that you have to do away with the Bond clause in your appointment letter. You may like to take up the following tasks on an immediate basis:
a. Rethink your appointment letter and all the clauses. While doing so, ask yourself if these are ethical, practical, or one-sided - only favoring the management or employee too.
b. Begin with payslips immediately.
c. Make a checklist of essential documents to keep in all personnel files for future reference.
d. Lastly, sit with your MD to understand exactly what culture you wish to have in your organization and going forward, look at framing policies that will encourage this.
Regards,
Richard
From India, Mumbai
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Yes, I agree with Mr. Kamal Kant Tyagi.
To elaborate further, there are various types of contracts/agreements that an employee may sign at will.
- Insurance contracts for the benefit of the employee - Small businesses usually offer two basic choices for insurance. It's usually acceptable for the employer if the new employee takes some time to decide on insurance contracts.
- Confidentiality agreement - This contract ensures that the employee does not disclose vital business information to a competitor.
- Probationary-period contract - These are typically provided to new employees to allow both the employer and employee to assess if the working relationship is successful within the initial few months. This arrangement helps to keep the employee under a performance system to ensure flexibility and job satisfaction. Having this agreement in writing helps prevent confusion later on and also communicates to the employee the importance of performing well in their role.
Some small-business owners opt for behavioral contracts. If an employee receives a certain number of write-ups for violating business policies, procedures, or rules, their employment may be terminated.
I have noticed many queries regarding contracts of bonded labor and employee contracts. It is important to differentiate and closely observe the perspectives to avoid any confusion among CiteHR members.
From India, Visakhapatnam
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To elaborate further, there are various types of contracts/agreements that an employee may sign at will.
- Insurance contracts for the benefit of the employee - Small businesses usually offer two basic choices for insurance. It's usually acceptable for the employer if the new employee takes some time to decide on insurance contracts.
- Confidentiality agreement - This contract ensures that the employee does not disclose vital business information to a competitor.
- Probationary-period contract - These are typically provided to new employees to allow both the employer and employee to assess if the working relationship is successful within the initial few months. This arrangement helps to keep the employee under a performance system to ensure flexibility and job satisfaction. Having this agreement in writing helps prevent confusion later on and also communicates to the employee the importance of performing well in their role.
Some small-business owners opt for behavioral contracts. If an employee receives a certain number of write-ups for violating business policies, procedures, or rules, their employment may be terminated.
I have noticed many queries regarding contracts of bonded labor and employee contracts. It is important to differentiate and closely observe the perspectives to avoid any confusion among CiteHR members.
From India, Visakhapatnam
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Hi,
Thank you, Mr. Kamal, for the link. I read it thoroughly and learned a lot from it. I agree with the clause related to the bond against the training, which is very much valid. However, going by the terms mentioned in the thread by Ms. Manju, there has been no mention of training. It simply states:
Based on this, in my opinion, there has been no training involved, which was the basis of my response. Although I am definitely not a legal expert, so I may be wrong.
Thank you again for the valuable input. This has definitely increased my knowledge regarding the case.
Best regards,
Nisha
From India, Delhi
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Thank you, Mr. Kamal, for the link. I read it thoroughly and learned a lot from it. I agree with the clause related to the bond against the training, which is very much valid. However, going by the terms mentioned in the thread by Ms. Manju, there has been no mention of training. It simply states:
Based on this, in my opinion, there has been no training involved, which was the basis of my response. Although I am definitely not a legal expert, so I may be wrong.
Thank you again for the valuable input. This has definitely increased my knowledge regarding the case.
Best regards,
Nisha
From India, Delhi
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