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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5Further, 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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