Dear all,
Bond is not illegal. Suppose X company hires you, provides training, and places you in any of their branches or sends you for a project with a signed bond. If you break any conditions of the bond, you are liable to pay the entire training cost and any losses incurred by the company due to your actions.
From India, Coimbatore
Acknowledge(0)
Amend(0)
Bond is not illegal. Suppose X company hires you, provides training, and places you in any of their branches or sends you for a project with a signed bond. If you break any conditions of the bond, you are liable to pay the entire training cost and any losses incurred by the company due to your actions.
From India, Coimbatore
Acknowledge(0)Amend(0)
Hi Sir,
I used to work with a BPO company in Delhi since December 2010. In July 2012, the company sent me along with some other people to Australia for 6 days on our client's site to gain the process (business) knowledge so that I can perform the same work at our Delhi based office.
Before sending me to Australia, they made me sign a service bond for 6 months with a value of Rs. 1 Lakh. The terms of the bond are that I will have to continue to serve the company for 6 months after I return from Australia. I had already completed one month of this bond period. The only bond period left was just 5 months. The bond was signed on the letterhead of the company and not on any stamp paper. Further, please note that the work which I used to do in Delhi is now being performed by some other employee who was given the handover by me. He was independently handling the job, and the business was also running smoothly at the time when I got myself transferred. Hence, my manager in Delhi did not agree to release me.
In the meanwhile, I got a very good opportunity in some other company offering me day shifts, and I accepted to join them. Before joining, I also told them regarding my bond issue, but they accepted a copy of my resignation email as proof of resigning from my previous company. Accordingly, I resigned from my previous company after serving a few days of the notice period and willing to clear my notice period due with the organization and had requested my manager to waive the bond amount, but the HR told me that they will not waive the amount, which amounts to Rs. 1 Lakh. Now they have sent me a letter that since they have not accepted my resignation, so asked me to join back within 24-48 hrs else they would terminate me from my services. What can happen if the company files a legal case against me? Please advise whether I am in a position where I can defend any legal case which the company can file against me?"
From India, Delhi
Acknowledge(0)Amend(0)
1I used to work with a BPO company in Delhi since December 2010. In July 2012, the company sent me along with some other people to Australia for 6 days on our client's site to gain the process (business) knowledge so that I can perform the same work at our Delhi based office.
Before sending me to Australia, they made me sign a service bond for 6 months with a value of Rs. 1 Lakh. The terms of the bond are that I will have to continue to serve the company for 6 months after I return from Australia. I had already completed one month of this bond period. The only bond period left was just 5 months. The bond was signed on the letterhead of the company and not on any stamp paper. Further, please note that the work which I used to do in Delhi is now being performed by some other employee who was given the handover by me. He was independently handling the job, and the business was also running smoothly at the time when I got myself transferred. Hence, my manager in Delhi did not agree to release me.
In the meanwhile, I got a very good opportunity in some other company offering me day shifts, and I accepted to join them. Before joining, I also told them regarding my bond issue, but they accepted a copy of my resignation email as proof of resigning from my previous company. Accordingly, I resigned from my previous company after serving a few days of the notice period and willing to clear my notice period due with the organization and had requested my manager to waive the bond amount, but the HR told me that they will not waive the amount, which amounts to Rs. 1 Lakh. Now they have sent me a letter that since they have not accepted my resignation, so asked me to join back within 24-48 hrs else they would terminate me from my services. What can happen if the company files a legal case against me? Please advise whether I am in a position where I can defend any legal case which the company can file against me?"
From India, Delhi
Acknowledge(0)Amend(0)
Hello Sir/Madam, I have just resigned from my company and already pursued onsite at INTEL INDIA before 8 months. At that time, according to my company policy, in case I am onsite, then I can't join INTEL for 6 months from the date of returning from the client company (INTEL). After I gave my resignation, they asked me to sign a bond which states "Employee can't join the client company for 3 years from the day of relieving". In case I join my client company, I have to pay 10 Lacs to my company as per the new policy. They mentioned that if I won't sign the bond, they won't dispatch the relieving letter. I came to know about this new policy during my notice period. Is it a valid bond? Kindly give suggestions regarding the above problem. Thanks & Regards, Alok 9566025183
From India, Chennai
Acknowledge(0)Amend(0)
From India, Chennai
Acknowledge(0)Amend(0)
7th May 2013
Article by Krishnakant Balasubramani
Introduction
The present era is experiencing phenomenal changes in the economy and industrial processes, which have resulted in greater business competition. To cope with competition, employers incur huge expenditures in imparting training to their employees to improve the quality of goods and services of the company. However, sometimes employees leave their employment after honing their skills and improving their industry knowledge for better salary and incentives. The increasing rate of attrition subjects employers not only to financial losses but also to delays in completing ongoing projects, thereby directly impacting their goodwill and reputation in the market. Therefore, to safeguard their interests, employers have recently started to obtain employment bonds from employees who are found suitable for training or skill development. Such employment bonds are agreements between the employer and employee wherein, among other terms and conditions of employment, an additional clause is incorporated requiring the employee to serve the employer compulsorily for a specific time period or refund the specified amount as the bond value.
The question that arises here is whether such a method to retain employees is effective, acceptable, and enforceable under the law. This article discusses the enforceability of employment bonds and the rights available to employers and employees under the agreement in light of various court decisions.
1. Employment Bond: Need and Enforceability?
Generally, before selecting employees for training or skill enhancement programs, employers take necessary safeguards by conducting interviews and obtaining assurances that the employee will complete the projects they are being trained for and also train other co-employees to create an effective and efficient work environment. However, employees still tend to leave for better opportunities, making it increasingly necessary for employers to enter into employment bonds to safeguard their interests. If an employee leaves employment without serving the company for the agreed time period, the employer is expected to suffer due to undue delays in completing the work, which can ultimately affect its reputation and credibility in the market. To prevent such situations, the employer can compensate for the loss incurred if a valid employment bond has been executed. Such bonds also deter employees from breaching the agreed terms and conditions.
Now, the most pertinent question that arises here is whether the employment agreement with negative covenants is enforceable under Indian laws. The simple answer is yes. Such employment agreements with negative covenants are valid and legally enforceable if the parties agree with their free consent, i.e., without force, coercion, undue influence, misrepresentation, or mistake. Indian courts have held in various judgments that in the event of a breach of contract by the employee, the employer shall be entitled to recover damages only if a considerable amount of money was spent on providing training or incurring other expenses for the employee. Furthermore, the courts have been reluctant to restrain employees from joining a competitor or another employer. The employment bond will not be enforceable if it is one-sided, unconscionable, or unreasonable. Therefore, it is crucial to be cautious while drafting the employment bond because it is mandatory that the conditions mentioned in the bond, including the compulsory employment period and the amount of penalty, are reasonable to be valid under Indian law. The term "reasonable" is not defined under the legislation, and therefore, the meaning has to be determined on a case-by-case basis depending on the issues involved and the circumstances of the case. In general, the conditions stipulated in the contract should justify that they are necessary to safeguard the interests of the employer and to compensate for the loss in the event of a breach of contract. Furthermore, the penalty or compulsory employment period stipulated in the contract should not be exorbitant to be considered valid and reasonable.
2. Challenging the Enforceability of Employment Bond
The validity and enforceability of the employment bond can be challenged on the ground that it restrains the lawful exercise of trade, profession, or business. As per section 27 of the Contract Act, 1872, any agreement in restraint of trade or profession is void. Therefore, any terms and conditions of the agreement that directly or indirectly compel the employee to serve the employer or restrict them from joining a competitor or another employer are not valid under the law. By signing a contract of employment, the employee does not sign a bond of slavery, and therefore, the employee always has the right to resign from employment even if they have agreed to serve the employer for a specific period. However, the restraints or negative covenants in the agreement or contract may be valid if they are reasonable. For a restraint clause in an agreement to be valid under the law, it has to be proved that it is necessary for the purpose of freedom of trade. For instance, if the employer can prove that the employee is joining a competitor to divulge trade secrets, then the court may issue an injunction order restricting the employment of the employee to protect the interests of the employer. Whenever an agreement is challenged on the grounds of being in restraint of trade, the onus is on the party supporting the contract to show that the restraint is reasonably necessary to protect their interests.
In order to execute a valid employment bond, the parties have to ensure that the following requisites have been complied with: (i) the agreement has to be signed by the parties with free consent; (ii) the stipulated conditions must be reasonable; and (iii) the conditions imposed on the employee must be proved to be necessary to safeguard the interests of the employer. Furthermore, the employment bond stipulating conditions such as serving the employer compulsorily for a specific period or a penalty for incurring expenses is in the nature of an indemnity bond, and therefore, such an employment bond has to be executed on a stamp paper of appropriate value to be valid and enforceable.
3. Remedies Available to Employer and Employee
In the event of a breach of the employment bond, the employer might incur a loss and may be entitled to compensation. However, the compensation awarded should be reasonable to compensate for the loss incurred and should not exceed the penalty, if any, stipulated in the contract. Usually, the court determines the reasonable compensation amount by computing the actual loss incurred by the employer considering all circumstances of the case. Even if the bond stipulates the payment of a penalty amount in the event of a breach, it does not mean that the employer shall be entitled to receive the stipulated amount in full as compensation on the occurrence of such default; rather, the employer shall be entitled only to reasonable compensation as determined by the court. While exploring alternate remedies available to the employer in the event of default by the employee, it would be interesting and worthwhile to discuss whether employers are entitled to seek reinstatement of their employee or obtain a restraining order against the employee from joining any competitor or alternate employer because many such similar reliefs have been sought by employers in various suits. The apex court, while dealing with a similar query, has held that specific performance action cannot be sought for a breach of a contract of personal service or bond and therefore, the employer shall not be entitled to seek reinstatement of their employees as relief in the event of a breach of the bond. In another matter, the apex court has held that it is not bound to grant an injunction in every case, and an injunction to enforce a negative covenant would be refused if it would indirectly compel the employee to idleness or to serve the employer, and therefore, the courts are also reluctant to grant an injunction against employees restricting their employment with another employer unless it is necessary for the protection of proprietary interests or trade secrets of the employer.
As mentioned, the conditions stipulated in the employment bond should be reasonable to be valid, and therefore, even if unreasonable conditions/clauses are stipulated in the contract, such as imposing an exorbitant duration of a compulsory employment period or a huge penalty on the employee, the court shall award compensation only if it determines that the employer has incurred a loss due to such breach of contract. The court normally considers the actual expenses incurred by the employer, the period of service by the employee, and the conditions stipulated in the contract to determine the loss incurred by the employer to arrive at the reasonable compensation amount. For instance, in the case of Sicpa India Limited v Shri Manas Pratim Deb, the plaintiff had incurred expenses of INR 67,595 towards training the defendant, for which an employment bond was executed under which the defendant had agreed to serve the plaintiff company for three years or make a payment of INR 200,000. The employee left the employment within two years. To enforce the agreement, the employer went to court, which awarded a sum of INR 22,532 as compensation for the breach of contract by the employee. It is crucial to note that although the bond stipulates a payment of INR 200,000 as compensation for the breach of contract, the judge considered the total expenses incurred by the employer and the employee's period of service while deciding the compensation amount. Since the defendant had already completed two years of service out of the agreed three-year period, the judge divided the total expenses of INR 67,595 incurred by the plaintiff into three equal parts for the three-year period and awarded a sum of INR 22,532 as reasonable compensation for leaving the employment a year before the agreed time period. Similarly, the High Court of Andhra Pradesh in the case of Satyam Computers v Leela Ravichander had also reduced the compensation amount considering the period of service of the employee.
Conclusion
In view of the aforementioned discussions and various court decisions, the employment bond is considered reasonable as it is necessary to protect the interests of the employer. However, the restraints stipulated upon the employee in the contract should be "reasonable" and "necessary" to safeguard the interests of the employer; otherwise, the validity of the bond may be questioned. Employees are always free to decide their employment and cannot be compelled to work for any employer by enforcing the employment bond. The court can issue an order restricting the employment of the employee only if the action is deemed necessary to safeguard the trade secrets or proprietary interests of the employer. In the event of a breach of contract
From India, Malappuram
Acknowledge(1)Amend(0)
0
0
Article by Krishnakant Balasubramani
Introduction
The present era is experiencing phenomenal changes in the economy and industrial processes, which have resulted in greater business competition. To cope with competition, employers incur huge expenditures in imparting training to their employees to improve the quality of goods and services of the company. However, sometimes employees leave their employment after honing their skills and improving their industry knowledge for better salary and incentives. The increasing rate of attrition subjects employers not only to financial losses but also to delays in completing ongoing projects, thereby directly impacting their goodwill and reputation in the market. Therefore, to safeguard their interests, employers have recently started to obtain employment bonds from employees who are found suitable for training or skill development. Such employment bonds are agreements between the employer and employee wherein, among other terms and conditions of employment, an additional clause is incorporated requiring the employee to serve the employer compulsorily for a specific time period or refund the specified amount as the bond value.
The question that arises here is whether such a method to retain employees is effective, acceptable, and enforceable under the law. This article discusses the enforceability of employment bonds and the rights available to employers and employees under the agreement in light of various court decisions.
1. Employment Bond: Need and Enforceability?
Generally, before selecting employees for training or skill enhancement programs, employers take necessary safeguards by conducting interviews and obtaining assurances that the employee will complete the projects they are being trained for and also train other co-employees to create an effective and efficient work environment. However, employees still tend to leave for better opportunities, making it increasingly necessary for employers to enter into employment bonds to safeguard their interests. If an employee leaves employment without serving the company for the agreed time period, the employer is expected to suffer due to undue delays in completing the work, which can ultimately affect its reputation and credibility in the market. To prevent such situations, the employer can compensate for the loss incurred if a valid employment bond has been executed. Such bonds also deter employees from breaching the agreed terms and conditions.
Now, the most pertinent question that arises here is whether the employment agreement with negative covenants is enforceable under Indian laws. The simple answer is yes. Such employment agreements with negative covenants are valid and legally enforceable if the parties agree with their free consent, i.e., without force, coercion, undue influence, misrepresentation, or mistake. Indian courts have held in various judgments that in the event of a breach of contract by the employee, the employer shall be entitled to recover damages only if a considerable amount of money was spent on providing training or incurring other expenses for the employee. Furthermore, the courts have been reluctant to restrain employees from joining a competitor or another employer. The employment bond will not be enforceable if it is one-sided, unconscionable, or unreasonable. Therefore, it is crucial to be cautious while drafting the employment bond because it is mandatory that the conditions mentioned in the bond, including the compulsory employment period and the amount of penalty, are reasonable to be valid under Indian law. The term "reasonable" is not defined under the legislation, and therefore, the meaning has to be determined on a case-by-case basis depending on the issues involved and the circumstances of the case. In general, the conditions stipulated in the contract should justify that they are necessary to safeguard the interests of the employer and to compensate for the loss in the event of a breach of contract. Furthermore, the penalty or compulsory employment period stipulated in the contract should not be exorbitant to be considered valid and reasonable.
2. Challenging the Enforceability of Employment Bond
The validity and enforceability of the employment bond can be challenged on the ground that it restrains the lawful exercise of trade, profession, or business. As per section 27 of the Contract Act, 1872, any agreement in restraint of trade or profession is void. Therefore, any terms and conditions of the agreement that directly or indirectly compel the employee to serve the employer or restrict them from joining a competitor or another employer are not valid under the law. By signing a contract of employment, the employee does not sign a bond of slavery, and therefore, the employee always has the right to resign from employment even if they have agreed to serve the employer for a specific period. However, the restraints or negative covenants in the agreement or contract may be valid if they are reasonable. For a restraint clause in an agreement to be valid under the law, it has to be proved that it is necessary for the purpose of freedom of trade. For instance, if the employer can prove that the employee is joining a competitor to divulge trade secrets, then the court may issue an injunction order restricting the employment of the employee to protect the interests of the employer. Whenever an agreement is challenged on the grounds of being in restraint of trade, the onus is on the party supporting the contract to show that the restraint is reasonably necessary to protect their interests.
In order to execute a valid employment bond, the parties have to ensure that the following requisites have been complied with: (i) the agreement has to be signed by the parties with free consent; (ii) the stipulated conditions must be reasonable; and (iii) the conditions imposed on the employee must be proved to be necessary to safeguard the interests of the employer. Furthermore, the employment bond stipulating conditions such as serving the employer compulsorily for a specific period or a penalty for incurring expenses is in the nature of an indemnity bond, and therefore, such an employment bond has to be executed on a stamp paper of appropriate value to be valid and enforceable.
3. Remedies Available to Employer and Employee
In the event of a breach of the employment bond, the employer might incur a loss and may be entitled to compensation. However, the compensation awarded should be reasonable to compensate for the loss incurred and should not exceed the penalty, if any, stipulated in the contract. Usually, the court determines the reasonable compensation amount by computing the actual loss incurred by the employer considering all circumstances of the case. Even if the bond stipulates the payment of a penalty amount in the event of a breach, it does not mean that the employer shall be entitled to receive the stipulated amount in full as compensation on the occurrence of such default; rather, the employer shall be entitled only to reasonable compensation as determined by the court. While exploring alternate remedies available to the employer in the event of default by the employee, it would be interesting and worthwhile to discuss whether employers are entitled to seek reinstatement of their employee or obtain a restraining order against the employee from joining any competitor or alternate employer because many such similar reliefs have been sought by employers in various suits. The apex court, while dealing with a similar query, has held that specific performance action cannot be sought for a breach of a contract of personal service or bond and therefore, the employer shall not be entitled to seek reinstatement of their employees as relief in the event of a breach of the bond. In another matter, the apex court has held that it is not bound to grant an injunction in every case, and an injunction to enforce a negative covenant would be refused if it would indirectly compel the employee to idleness or to serve the employer, and therefore, the courts are also reluctant to grant an injunction against employees restricting their employment with another employer unless it is necessary for the protection of proprietary interests or trade secrets of the employer.
As mentioned, the conditions stipulated in the employment bond should be reasonable to be valid, and therefore, even if unreasonable conditions/clauses are stipulated in the contract, such as imposing an exorbitant duration of a compulsory employment period or a huge penalty on the employee, the court shall award compensation only if it determines that the employer has incurred a loss due to such breach of contract. The court normally considers the actual expenses incurred by the employer, the period of service by the employee, and the conditions stipulated in the contract to determine the loss incurred by the employer to arrive at the reasonable compensation amount. For instance, in the case of Sicpa India Limited v Shri Manas Pratim Deb, the plaintiff had incurred expenses of INR 67,595 towards training the defendant, for which an employment bond was executed under which the defendant had agreed to serve the plaintiff company for three years or make a payment of INR 200,000. The employee left the employment within two years. To enforce the agreement, the employer went to court, which awarded a sum of INR 22,532 as compensation for the breach of contract by the employee. It is crucial to note that although the bond stipulates a payment of INR 200,000 as compensation for the breach of contract, the judge considered the total expenses incurred by the employer and the employee's period of service while deciding the compensation amount. Since the defendant had already completed two years of service out of the agreed three-year period, the judge divided the total expenses of INR 67,595 incurred by the plaintiff into three equal parts for the three-year period and awarded a sum of INR 22,532 as reasonable compensation for leaving the employment a year before the agreed time period. Similarly, the High Court of Andhra Pradesh in the case of Satyam Computers v Leela Ravichander had also reduced the compensation amount considering the period of service of the employee.
Conclusion
In view of the aforementioned discussions and various court decisions, the employment bond is considered reasonable as it is necessary to protect the interests of the employer. However, the restraints stipulated upon the employee in the contract should be "reasonable" and "necessary" to safeguard the interests of the employer; otherwise, the validity of the bond may be questioned. Employees are always free to decide their employment and cannot be compelled to work for any employer by enforcing the employment bond. The court can issue an order restricting the employment of the employee only if the action is deemed necessary to safeguard the trade secrets or proprietary interests of the employer. In the event of a breach of contract
From India, Malappuram
Acknowledge(1)Amend(0)CiteHR.AI
(Fact Checked)-The user's reply provides a detailed and accurate explanation of employment bonds in India, referencing relevant court cases and legal provisions. (1 Acknowledge point)
0
0
Hello Sir/Madam,
I have just resigned from my company and already pursued onsite at INTEL INDIA before 8 months. At that time, according to my company policy, in case I am onsite, then I can't join INTEL for 6 months from the date of returning from the client company (INTEL). After I gave my resignation, they asked me to sign a bond which states "Employee can't join the client company for 3 years from the day of relieving." In case I join my client company, I have to pay 10 Lacs to my company as per the new policy, and they mentioned that if I won't sign the bond, they won't dispatch the relieving letter.
I came to know about this new policy during my notice period. Is it a valid bond? Kindly give suggestions regarding the above problem.
Thanks & Regards,
Alok
9566025183
From India, Chennai
Acknowledge(0)Amend(0)
0
0
I have just resigned from my company and already pursued onsite at INTEL INDIA before 8 months. At that time, according to my company policy, in case I am onsite, then I can't join INTEL for 6 months from the date of returning from the client company (INTEL). After I gave my resignation, they asked me to sign a bond which states "Employee can't join the client company for 3 years from the day of relieving." In case I join my client company, I have to pay 10 Lacs to my company as per the new policy, and they mentioned that if I won't sign the bond, they won't dispatch the relieving letter.
I came to know about this new policy during my notice period. Is it a valid bond? Kindly give suggestions regarding the above problem.
Thanks & Regards,
Alok
9566025183
From India, Chennai
Acknowledge(0)Amend(0)CiteHR.AI
(Fact Checked)-The bond restricting joining a client company for 3 years after leaving could be legally questionable. Seek legal advice to assess its validity. (1 Acknowledge point)
0
0
hi sir,
Please help me
I was working with a company since April 2011. I had signed 3 years 3,00,000 rupees bond (one sided). After 2 years complete 2013, this company will sacked some employee(30) randomly. In this situation I am resign this company.Also they are not provided any special training.
Now this company will demand 1,00,00 rupees, they will send advocate’s latter. Also they are appointed a arbitrator.
This situation what can I do, please suggested me. If they prove wrong way,that they provided me any training, then what is happening? Then what can I do, please suggested me.
Thanks & regards
S.bose
From India, Kolkata
Acknowledge(0)Amend(0)
0
0
Please help me
I was working with a company since April 2011. I had signed 3 years 3,00,000 rupees bond (one sided). After 2 years complete 2013, this company will sacked some employee(30) randomly. In this situation I am resign this company.Also they are not provided any special training.
Now this company will demand 1,00,00 rupees, they will send advocate’s latter. Also they are appointed a arbitrator.
This situation what can I do, please suggested me. If they prove wrong way,that they provided me any training, then what is happening? Then what can I do, please suggested me.
Thanks & regards
S.bose
From India, Kolkata
Acknowledge(0)Amend(0)CiteHR.AI
(Fact Checked)-The company cannot demand money if they didn't provide training. Seek legal advice and review your contract for clarity. Stay informed and protect your rights. (1 Acknowledge point)
0
0
I came to know that bonds are not valid if the employee works in the notification period. However, if we break the bond, it's hard to get the experience certificate. Even though the joining letter and the last 3-month salary slip will suffice for the experience letter.
From India, Ahmedabad
Acknowledge(0)Amend(0)
From India, Ahmedabad
Acknowledge(0)Amend(0)
Hi,
I had a bond with an IT company, but I recently terminated this bond. I paid the breakage amount as per the bond; however, the company is still holding my documents citing reasons such as handover and pending work on the existing project I was involved in. Is there any Act that can help me retrieve these documents?
They coerced me into signing some documents under pressure. I needed a relieving letter for my new job, so I signed these documents under duress. Now, they are demanding the completion of the existing work. Fortunately, I did not sign any Scope document for that project.
Please assist me.
From India, Mumbai
Acknowledge(0)Amend(0)
0
0
I had a bond with an IT company, but I recently terminated this bond. I paid the breakage amount as per the bond; however, the company is still holding my documents citing reasons such as handover and pending work on the existing project I was involved in. Is there any Act that can help me retrieve these documents?
They coerced me into signing some documents under pressure. I needed a relieving letter for my new job, so I signed these documents under duress. Now, they are demanding the completion of the existing work. Fortunately, I did not sign any Scope document for that project.
Please assist me.
From India, Mumbai
Acknowledge(0)Amend(0)CiteHR.AI
(Fact Checked)-The company cannot withhold documents as per the bond. You have the right to your personal documents. Seek legal counsel or contact labor authorities for assistance. (1 Acknowledge point)
0
0
Dear Friend,
Generally, employers used to take freshers as trainees by obtaining assurance from those whom they have selected to work in their company as regular employees in due course. They may take freshers as trainees by asking them to sign a service agreement or bond, ensuring continuous services from these candidates after completing their training period for a fixed period. One aspect to consider is the genuineness of the service agreement.
To train a fresher to acquire job skills required for a specific position, it may take a minimum period of six months to one year.
During this training period, the trainee will not be able to serve the company as a regular employee.
The employer needs to cover expenses such as stipend, medical costs, subsidized canteen food, accommodation, and any other expenses as per the company's policy.
The total expenditure incurred by an employer may vary based on the skill requirements of the individual in their designated position.
Through these actions, the employer may expect the individual, who has been trained to become qualified for a particular job, to stay with the company for a minimum period - as a Trainee for one year, on Probation for another year, and as a Regular employee for one more year.
Therefore, obtaining assurance from an individual by the employer through a service agreement to serve the company for a minimum period cannot be deemed unfair or void; it should be seen as a general agreement rather than a bond.
However, the compensation set by the employer in case of agreement breach by the candidates should be reasonable and not disproportionate to the actual expenses incurred for training the freshers.
Employing an experienced person for specific job functions without providing any training and obtaining a service agreement may not be considered genuine. Such cases may not hold up in legal proceedings, as judges will assess the genuineness of the agreement.
Regards
From India, Hyderabad
Acknowledge(0)Amend(0)
Generally, employers used to take freshers as trainees by obtaining assurance from those whom they have selected to work in their company as regular employees in due course. They may take freshers as trainees by asking them to sign a service agreement or bond, ensuring continuous services from these candidates after completing their training period for a fixed period. One aspect to consider is the genuineness of the service agreement.
To train a fresher to acquire job skills required for a specific position, it may take a minimum period of six months to one year.
During this training period, the trainee will not be able to serve the company as a regular employee.
The employer needs to cover expenses such as stipend, medical costs, subsidized canteen food, accommodation, and any other expenses as per the company's policy.
The total expenditure incurred by an employer may vary based on the skill requirements of the individual in their designated position.
Through these actions, the employer may expect the individual, who has been trained to become qualified for a particular job, to stay with the company for a minimum period - as a Trainee for one year, on Probation for another year, and as a Regular employee for one more year.
Therefore, obtaining assurance from an individual by the employer through a service agreement to serve the company for a minimum period cannot be deemed unfair or void; it should be seen as a general agreement rather than a bond.
However, the compensation set by the employer in case of agreement breach by the candidates should be reasonable and not disproportionate to the actual expenses incurred for training the freshers.
Employing an experienced person for specific job functions without providing any training and obtaining a service agreement may not be considered genuine. Such cases may not hold up in legal proceedings, as judges will assess the genuineness of the agreement.
Regards
From India, Hyderabad
Acknowledge(0)Amend(0)
I don't think being extra vigilant on the points mentioned above would help since there is no negotiation power for the employees to seek modifications to the bond. It is either take it with the bond or leave scenarios.
From United States,
Acknowledge(0)Amend(0)
0
0
From United States,
Acknowledge(0)Amend(0)CiteHR.AI
(Fact Checked)-The user reply is correct. Employees often lack bargaining power in bond agreements, leading to take-it-or-leave-it scenarios. (1 Acknowledge point)
0
0
Looking for something specific? - Join & Be Part Of Our Community and get connected with the right people who can help. Our AI-powered platform provides real-time fact-checking, peer-reviewed insights, and a vast historical knowledge base to support your search.
CiteHR.AI
(Fact Checked)-The company cannot enforce the bond if they have already given your work to someone else. Legally, they cannot demand the bond amount. You can defend against any legal action. Ensure to keep evidence of the work handover. (1 Acknowledge point)