I had an offer from X company. After joining, i.e. on the day of joining, they gave me some documents (employment contract) to sign.
Although HR clearly explained every condition and point of the contract, there was one point stating that I had to stay with the firm for the next 2 years, i.e. I could not resign before completing 2 years. If I did so, I would have to pay Rs.1 lac.
I refused to accept this condition and did not sign the contract papers. In response, they revoked my job offer, and I am currently jobless.
I even argued with them that they should have informed me about such conditions before offering me the job. I could have made a decision then and there without wasting time for both of us. They had no response to my argument.
I request professionals to clarify my concern regarding the conditions employers impose on the candidates they hire.
Is it legal to hire on a contract when employment documents state the role is permanent?
From India, Noida
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7Although HR clearly explained every condition and point of the contract, there was one point stating that I had to stay with the firm for the next 2 years, i.e. I could not resign before completing 2 years. If I did so, I would have to pay Rs.1 lac.
I refused to accept this condition and did not sign the contract papers. In response, they revoked my job offer, and I am currently jobless.
I even argued with them that they should have informed me about such conditions before offering me the job. I could have made a decision then and there without wasting time for both of us. They had no response to my argument.
I request professionals to clarify my concern regarding the conditions employers impose on the candidates they hire.
Is it legal to hire on a contract when employment documents state the role is permanent?
From India, Noida
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Dear Swati,
What we call an "Appointment Letter" is an employment contract. An employment contract is between an "employer" and an "employee". However, before entering into the contract, both parties should have discussed the terms and conditions of employment. Both parties entered into the contract with assumptions. The assumptions were discovered at a much later stage.
Now both parties have suffered losses because of the assumptions. Since the employer could not employ a selected candidate, he will have to continue to work without the employee. This could affect that department's work. On the contrary, the employee's loss is far more severe. She will have to deal with disruptions in monthly cash flow, potentially throwing her financial planning into disarray.
However, there is no legal solution to this problem. The lesson for you and others from this incident is to clearly clarify the future terms of employment.
As a candidate, I recommend you start searching for a new job vigorously. May you be destined to get a better job.
Thanks,
Dinesh Divekar
From India, Bangalore
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What we call an "Appointment Letter" is an employment contract. An employment contract is between an "employer" and an "employee". However, before entering into the contract, both parties should have discussed the terms and conditions of employment. Both parties entered into the contract with assumptions. The assumptions were discovered at a much later stage.
Now both parties have suffered losses because of the assumptions. Since the employer could not employ a selected candidate, he will have to continue to work without the employee. This could affect that department's work. On the contrary, the employee's loss is far more severe. She will have to deal with disruptions in monthly cash flow, potentially throwing her financial planning into disarray.
However, there is no legal solution to this problem. The lesson for you and others from this incident is to clearly clarify the future terms of employment.
As a candidate, I recommend you start searching for a new job vigorously. May you be destined to get a better job.
Thanks,
Dinesh Divekar
From India, Bangalore
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Dear Swati,
Greetings for the day,
As far as ur matter is concern I have gone through the type of Bond. Bonded labour in any condition is totally abolished by the the law but the 'Surety Bond' is still in domain of various Public Sectors Undertakings under Government of India and Private Sectors Enterprises the candidates who are selected for the post of Management Trainee under Coal India limited had to sign a surety bond which states :
1)They will have to serve the corporation for a minimum period of prescribed months, with regard to which a bond of Amounted to be signed with the selected candidates.
2)An amount of ----- will be deducted from the selected candidate’s salary for 60 months which will be refunded with interest on completion of 60 months
3)In case the candidate’s performance is found unsatisfactory by the corporation, the service of the candidate during the probation period will be terminated in accordance with the terms & conditions of offer of appointment & receipt of satisfactory police report.
so please go through the type and defination of the bonds and seek legal advice befor signing the same.
Thanks & Regards,
From,
Sumit Kumar Saxena
From India, Ghaziabad
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Greetings for the day,
As far as ur matter is concern I have gone through the type of Bond. Bonded labour in any condition is totally abolished by the the law but the 'Surety Bond' is still in domain of various Public Sectors Undertakings under Government of India and Private Sectors Enterprises the candidates who are selected for the post of Management Trainee under Coal India limited had to sign a surety bond which states :
1)They will have to serve the corporation for a minimum period of prescribed months, with regard to which a bond of Amounted to be signed with the selected candidates.
2)An amount of ----- will be deducted from the selected candidate’s salary for 60 months which will be refunded with interest on completion of 60 months
3)In case the candidate’s performance is found unsatisfactory by the corporation, the service of the candidate during the probation period will be terminated in accordance with the terms & conditions of offer of appointment & receipt of satisfactory police report.
so please go through the type and defination of the bonds and seek legal advice befor signing the same.
Thanks & Regards,
From,
Sumit Kumar Saxena
From India, Ghaziabad
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True, they should have told you about the condition when recruiting you. But legally, you have little rights because you did not sign anything before that point. Oral agreements (offer and acceptance), though valid in law, are difficult to prove in a court of law.
I did not get from your post where exactly they put you on contract. In general, being put on contract means it's a fixed-term employment, employed through a contractor, or the work is not full-time, and you are not on the payroll of the company (paid professional fees). So, I think you need to check your wording and your understanding of the terms, or you will end up with the wrong advice.
That being said, employment bonds are recognized in India only in cases where the employer is providing certain specialized training, imparting skills by way of formal training, and not otherwise. Furthermore, courts have also held that the value of the bond cannot exceed the cost of training. In most cases, in-house training and on-the-job training are not counted for this purpose. Therefore, even if you had signed the agreement, unless they were giving you specific training, the bond would be non-enforceable.
From India, Mumbai
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I did not get from your post where exactly they put you on contract. In general, being put on contract means it's a fixed-term employment, employed through a contractor, or the work is not full-time, and you are not on the payroll of the company (paid professional fees). So, I think you need to check your wording and your understanding of the terms, or you will end up with the wrong advice.
That being said, employment bonds are recognized in India only in cases where the employer is providing certain specialized training, imparting skills by way of formal training, and not otherwise. Furthermore, courts have also held that the value of the bond cannot exceed the cost of training. In most cases, in-house training and on-the-job training are not counted for this purpose. Therefore, even if you had signed the agreement, unless they were giving you specific training, the bond would be non-enforceable.
From India, Mumbai
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@Saswatabanerjee and @Sumit Kumar Saxena
There is no such condition as mentioned by you. It was a full-time employment for the post of Senior HR Manager. The offer letter includes this statement. They have also mentioned, while convincing me, that they will write the same thing in the appointment letter as well. The only condition as per that agreement was that I cannot resign before the completion of 2 years irrespective of any reason. If I do so, I had to pay the amount mentioned in the contract. They also mentioned that if I fail to pay the amount, they will follow the legal path.
Now, being in HR, if I myself am not satisfied with this condition, how will I convince other employees joining after me to agree to this point, in fact, the one which is completely illegal.
From India, Noida
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There is no such condition as mentioned by you. It was a full-time employment for the post of Senior HR Manager. The offer letter includes this statement. They have also mentioned, while convincing me, that they will write the same thing in the appointment letter as well. The only condition as per that agreement was that I cannot resign before the completion of 2 years irrespective of any reason. If I do so, I had to pay the amount mentioned in the contract. They also mentioned that if I fail to pay the amount, they will follow the legal path.
Now, being in HR, if I myself am not satisfied with this condition, how will I convince other employees joining after me to agree to this point, in fact, the one which is completely illegal.
From India, Noida
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Dear Swati,
Saswata and I have already clarified the details regarding the SURETY BOND. However, in the current scenario, in various organizations, you need to carefully review the terms and conditions of the notice period. If the conditions are not met, you may be required to pay the amount specified by the company in their STANDING ORDER, which holds legal validity. Therefore, I recommend seeking legal advice from a legal expert to fully understand the implications.
Sumit Kumar Saxena
From India, Ghaziabad
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Saswata and I have already clarified the details regarding the SURETY BOND. However, in the current scenario, in various organizations, you need to carefully review the terms and conditions of the notice period. If the conditions are not met, you may be required to pay the amount specified by the company in their STANDING ORDER, which holds legal validity. Therefore, I recommend seeking legal advice from a legal expert to fully understand the implications.
Sumit Kumar Saxena
From India, Ghaziabad
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Dear Sumit,
You have made an interesting point. Do you know of any cases where standing orders mention that the employee has to pay if they do not work for a certain number of years? Based on my understanding, standing orders have to be approved by the Labour Commissioner before they are certified, and no labour officer will accept these terms in the standing order. I am specifically asking because you have raised an important point. It could be used to bypass the terms of the Supreme Court judgment on employment bonds.
From India, Mumbai
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You have made an interesting point. Do you know of any cases where standing orders mention that the employee has to pay if they do not work for a certain number of years? Based on my understanding, standing orders have to be approved by the Labour Commissioner before they are certified, and no labour officer will accept these terms in the standing order. I am specifically asking because you have raised an important point. It could be used to bypass the terms of the Supreme Court judgment on employment bonds.
From India, Mumbai
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Going through the post and the responses, my observations are as follows:
1) The poster's contention that a permanent job for which applications were invited was later converted into a contractual job after selection is not correct.
2) Employment Bond requiring a new appointee to serve the organization for a minimum period after induction or to pay a specific sum of damages by the employee in case of failure cannot be considered per se as illegal. It depends on the nature of the job and the duration of time and the amount of money invested by the employer to train the new appointee.
3) But fairness and transparency of communication require the prospective employer to mention such a condition in the advertisement for the job itself or at least in the offer letter after selection. The facts described by the poster show that such a condition was revealed to her for the first time only after her joining. Thus the very process of recruitment and appointment not only lacks professional standards but ethical too in view of the nature of the job position advertised and offered.
4) Since the job is that of a Senior HR Manager, no one can reasonably think that it would require any long duration of on-the-job training after appointment or two years to be a period of notice to be given by the newly appointed employee in case of her resignation later.
5) Juxtaposing the comparative losses incurred by both because of this unhappy situation created by the employer, the poster seems to be at a greater loss because she has lost her previous job and the present one due to the communication failure of the organization which appointed her unconditionally but later insisted on the execution of the employment bond that could not be accepted by the poster for reasons that are valid and reasonable. Therefore, the employer is bound to compensate the poster for her present unemployment and the mental agony virtually created by the employer. The poster can institute a civil suit against the organization if she desires and claim damages though it can be a long-drawn battle. She can consult an experienced civil lawyer well-versed in service matters. After all, professional ethics are more important in matters of employment.
From India, Salem
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1) The poster's contention that a permanent job for which applications were invited was later converted into a contractual job after selection is not correct.
2) Employment Bond requiring a new appointee to serve the organization for a minimum period after induction or to pay a specific sum of damages by the employee in case of failure cannot be considered per se as illegal. It depends on the nature of the job and the duration of time and the amount of money invested by the employer to train the new appointee.
3) But fairness and transparency of communication require the prospective employer to mention such a condition in the advertisement for the job itself or at least in the offer letter after selection. The facts described by the poster show that such a condition was revealed to her for the first time only after her joining. Thus the very process of recruitment and appointment not only lacks professional standards but ethical too in view of the nature of the job position advertised and offered.
4) Since the job is that of a Senior HR Manager, no one can reasonably think that it would require any long duration of on-the-job training after appointment or two years to be a period of notice to be given by the newly appointed employee in case of her resignation later.
5) Juxtaposing the comparative losses incurred by both because of this unhappy situation created by the employer, the poster seems to be at a greater loss because she has lost her previous job and the present one due to the communication failure of the organization which appointed her unconditionally but later insisted on the execution of the employment bond that could not be accepted by the poster for reasons that are valid and reasonable. Therefore, the employer is bound to compensate the poster for her present unemployment and the mental agony virtually created by the employer. The poster can institute a civil suit against the organization if she desires and claim damages though it can be a long-drawn battle. She can consult an experienced civil lawyer well-versed in service matters. After all, professional ethics are more important in matters of employment.
From India, Salem
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