It is unfortunate that seniors are advocating the person just get out without paying any respect to the bond signed by him. This is how his character and traits also will be formed. Iam not advocating he should make payment and get rid of the current organisation. First he should explain the situation and convince the employer for waiving of the bond amount or atleast should calculate the liquidated damages on proportionate basis and pay the amount for unserved bond period. This has been upheld by various courts also. If the employer has given some specific training which involves some cost and needs to be recovered the same should be recovered. In Wipro case Bangalore court have agreed to recover training cost proportionately from the relieving employees terminal benefits for the unserved bond period.
This is my personal view and I have commented to blame anyone.
From India, Ernakulam
This is my personal view and I have commented to blame anyone.
From India, Ernakulam
@Ravichandiran-B, The Seniors have not supported the act of abandoning the job just ignoring the agreement signed but are defending the BOND signed or compelled to be signed. I have only said that BOND is illegal, and I have also said that if the employee was given training, the cost of training could be recovered in actuals. All the Courts have said in the same line only, and no Court has ever said that an employer can insist bond and compel an employee to work with him for certain periods. If it is permitted we will land into bonded labour system. Even in the present scenario many employees, especially in new generation industries like IT, are compelled to work under pressure, because of negative remarks the employers put in background verification. That has virtually spoiled the career of many young persons. We do not support employees who just leave without notice. But there should be genuinity in the length of notice period, right?
From India, Kannur
4244From India, Kannur
A Contract is a binding between an employee and employer under Indian Contract Act, 1872, from the day of entering in to contract between both parties. No employee can contravene the Contract unless the employer agreed the reasons deemed fit to him requested by employee. The reason mentioned in your post is does not seems eternal facts which could not justify the employer. Employer has spent his financials resource on employee if the ROI has not yielded results withing your contract bond period, the amount incurred towards employee development has to return to employer.
My sincere suggestion is request employer in kind manner to waive of your bond period, the employer in his coming recruitments more stringent rules will get added to his employment terms considering the experience based on your employment which will effect upcoming job seekers.
From India, Telangana
My sincere suggestion is request employer in kind manner to waive of your bond period, the employer in his coming recruitments more stringent rules will get added to his employment terms considering the experience based on your employment which will effect upcoming job seekers.
From India, Telangana
@Madhu T K -sharing for your reference, but yes ,bonded labor is definitely illegal but not employment bond .Hon'ble Supreme Court in Niranjan Shankar Golikari vs The Century Spinning And Mfg. Co held that "there is nothing to prevent a court from granting a limited injunction to the extent that is necessary to protect employers' interests where the negative stipulation is not void." The Court also mentioned that "an agreement to serve a person exclusively for a definite term can be termed as a lawful agreement." Therefore, the restrictive covenants provided in a contract shall be valid for the duration of employment and will not be a violation of Section 27 of the Indian Contract Act, 1872 and there are many more judgments in favor of the employer. The employment bond gives a right to the employer to claim the reasonable liquidated damages in the court of law in case of breach of contract by the employee. Employment Bond is an important document which protects employer's interests with a caveat that the conditions mentioned in the Bond should be reasonable.
Sir/Madam,
An Employee is to work for a minimum period , this is mentioned in contract or appointment letter. It is written only where training is prerequisite for job. Before regular posting on job company provide training or sent to training any where. Only a company can recover training cost if you leave a company before a minimum period as mentioned in contract/ appointment letter.
From India, Indore
An Employee is to work for a minimum period , this is mentioned in contract or appointment letter. It is written only where training is prerequisite for job. Before regular posting on job company provide training or sent to training any where. Only a company can recover training cost if you leave a company before a minimum period as mentioned in contract/ appointment letter.
From India, Indore
Niranjan Shankar Golikari was given exclusive training in spinning department of the tyre cord division by the technical collaborators, viz, Algemene Kunstzijde Unie of Holland and Vereinigte Glanzstoff-Fabriken, West Germany. There was express agreement by Century Spinning And Mfg. Co with the technical support providers about payment of consideration for that. The agreement with the employee contained a clause that the employee having received the training should remain with them for a minimum period of five years so that the training cost could be recovered. True, there is nothing contrary to what I have stated in my previous posts. The Apex Court also drew a distinction between a restriction in a contract of employment, which is operative during the period of employment, and one, which is to operate after the termination of employment.
In later cases like Superintendence Company of India (P) Ltd. vs. Sh. Krishan Murga (AIR 1980 SC 1717), the Court observed that "the doctrine of restraint of trade does not apply during the continuance of the contract for employment and it applied only when the contract comes to an end".
In Ambiance India pvt Ltd vs Naveen Jain (2005 (81) DRJ 538), an agreement between the parties prohibiting an employee for two years from taking employment with present, past or prospective customer of plaintiff was held to be void and contrary to section 27 of the Indian Contract Act. It was held that such a stipulation would prima facie be against public policy of India and arm-twisting tactic adopted by employer against young man looking for a job
In Sandhya Organic Chemicals v. United Phosphorous (AIR1997GUJ177) it was held that, an employee cannot be prevented from utilizing the knowledge and experience that he has gained while being in employment.
In the Niranjan's case the core of the contract was that he had received training and that too exclusive training as part of contract of employment which also had a clause that the Supervisor (Neeraj) would make use of his knowledge gained exclusively for the employer for certain period. That is why while referring the case of Niranjan the Courts have said that the Neeraj case is different from other situations.
From India, Kannur
In later cases like Superintendence Company of India (P) Ltd. vs. Sh. Krishan Murga (AIR 1980 SC 1717), the Court observed that "the doctrine of restraint of trade does not apply during the continuance of the contract for employment and it applied only when the contract comes to an end".
In Ambiance India pvt Ltd vs Naveen Jain (2005 (81) DRJ 538), an agreement between the parties prohibiting an employee for two years from taking employment with present, past or prospective customer of plaintiff was held to be void and contrary to section 27 of the Indian Contract Act. It was held that such a stipulation would prima facie be against public policy of India and arm-twisting tactic adopted by employer against young man looking for a job
In Sandhya Organic Chemicals v. United Phosphorous (AIR1997GUJ177) it was held that, an employee cannot be prevented from utilizing the knowledge and experience that he has gained while being in employment.
In the Niranjan's case the core of the contract was that he had received training and that too exclusive training as part of contract of employment which also had a clause that the Supervisor (Neeraj) would make use of his knowledge gained exclusively for the employer for certain period. That is why while referring the case of Niranjan the Courts have said that the Neeraj case is different from other situations.
From India, Kannur
In the landmark case of S. Golikari vs. Century Spinning & Manufacturing Company , the Supreme Court upheld the validity of a clause in an employment contract that stipulated the appellant employee would serve the respondent company for five years, undergo training, and reimburse training expenses and pay damages if they resigned before the expiry of the five-year period. The court held that this restriction did not constitute a restraint of trade, as it was limited to the agreed-upon contract period.
Similarly, in M/s Gujarat Bottling Company Limited vs. Coca Cola Company, The Supreme Court in the case of M/s Gujarat Bottling Company Limited vs. Coca Cola Company succinctly summarized the law pertaining to 'negative covenants' in employment contracts, drawing on earlier apex court judgments. The Court held that, in balancing the employer's interests with the employee's right to livelihood, a negative covenant that is operative during the employment contract period, when the employee is exclusively bound to serve the employer, is generally not considered a restraint of trade. Therefore, it will not fall under the purview of Section 27 of the Act
Damages: Section 73 of the Act provides the general right to compensation for loss or damage caused by breach of contract. Section 73 of the Act reads as under:
73. When a contract has been broken, the party who suffers by such breach is entitled to receive, from the party who has broken the contract, compensation for any loss or damage caused to him thereby, which naturally arose in the usual course of things from such breach, or which the parties knew, when they made the contract, to be likely to result from the breach of it. Such compensation is not to be given for any remote and indirect loss or damage sustained by reason of the breach.
To avoid legal hassles, it is essential to honor your employment bond and understand the implications of breaching contractual obligations.
Similarly, in M/s Gujarat Bottling Company Limited vs. Coca Cola Company, The Supreme Court in the case of M/s Gujarat Bottling Company Limited vs. Coca Cola Company succinctly summarized the law pertaining to 'negative covenants' in employment contracts, drawing on earlier apex court judgments. The Court held that, in balancing the employer's interests with the employee's right to livelihood, a negative covenant that is operative during the employment contract period, when the employee is exclusively bound to serve the employer, is generally not considered a restraint of trade. Therefore, it will not fall under the purview of Section 27 of the Act
Damages: Section 73 of the Act provides the general right to compensation for loss or damage caused by breach of contract. Section 73 of the Act reads as under:
73. When a contract has been broken, the party who suffers by such breach is entitled to receive, from the party who has broken the contract, compensation for any loss or damage caused to him thereby, which naturally arose in the usual course of things from such breach, or which the parties knew, when they made the contract, to be likely to result from the breach of it. Such compensation is not to be given for any remote and indirect loss or damage sustained by reason of the breach.
To avoid legal hassles, it is essential to honor your employment bond and understand the implications of breaching contractual obligations.
Is Gujarat Bottling Company Limited vs. Coca Cola Company free from criticism??? Moreover the case pertains mainly to Trade Marks Act, 1999, Trade and Merchandise Marks Act, 1958 and Section 27, 41 and 82 of the Indian Contract Act, 1872. The Niranjan case, a case of 1967, as already mentioned verified whether the contract will be enforceable during the tenure of the contract and not beyond termination of the contract. Anyway, thanks for the update. I will continue to advocate that employment bond NOT other trade contracts, are illegal, and demanding an employee to remain with an employer who has not spent any cost by way of training and knowledge development is unfair.
From India, Kannur
From India, Kannur
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Kami Export - Negative Covenant in Contract of Employment.pdf (1).pdf