I was sent overseas for a 2-year work assignment. For the 2-year assignment, I was asked to sign a service bond which requires me to return to my home country for work for another 2 years. 1.5 years into the overseas assignment, the home company sent an email mentioning that I would have to return 4 months earlier than scheduled. Since I have plans to stay longer in the host country, possibly to explore other job opportunities, can I use the arguments below to release myself from the bond?
1. As this is a work assignment (with no training involved) where the company is obligated to send employees to the host country, is the bond still valid?
2. With the company requesting my return 4 months earlier, could this be considered a breach of contract on their part? Would I be able to render the bond null and void?
3. While it is clearly stated that I must reimburse all costs incurred during the overseas assignment if I leave the service in the host country, there is no explicit mention in the service bond about penalties if I resign in my home country after the assignment. It was only brought up in the email that I would have to cover all costs incurred if I resign in my home country. Can I depart freely since the penalty was not outlined in the service bond but only mentioned in an email following my inquiry? Additionally, is this unfair as costs are not prorated based on the time served?
Are there any other valid arguments from the ones mentioned above? Or are there other points that I could leverage? Thank you!
From India, Indore
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1. As this is a work assignment (with no training involved) where the company is obligated to send employees to the host country, is the bond still valid?
2. With the company requesting my return 4 months earlier, could this be considered a breach of contract on their part? Would I be able to render the bond null and void?
3. While it is clearly stated that I must reimburse all costs incurred during the overseas assignment if I leave the service in the host country, there is no explicit mention in the service bond about penalties if I resign in my home country after the assignment. It was only brought up in the email that I would have to cover all costs incurred if I resign in my home country. Can I depart freely since the penalty was not outlined in the service bond but only mentioned in an email following my inquiry? Additionally, is this unfair as costs are not prorated based on the time served?
Are there any other valid arguments from the ones mentioned above? Or are there other points that I could leverage? Thank you!
From India, Indore
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The information you shared is very good. I've been waiting for this information for a long time.
Vex 3
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Vex 3
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Hi Partner,
Without knowing the content of the service bond that you signed, it would not be easy to provide an accurate answer here. As a tip, it would be good to ask a lawyer to examine the service bond and check if it is correct as per the Indian Contract Act of 1872. This could help in attaining the correct legal points in the first attempt.
In my viewpoint, it would not be easy for your employer to legally enforce the service bond, especially if you are able to highlight in court that this is more of a one-sided contract giving the employer an unfair advantage over you. However, initiating proceedings in this manner could harm the relationship between you and your employer and also jeopardize any chances of a positive future reference from your employer.
If I proceed on a general note regarding the points you mentioned, it is true that if the 2-year bond period is tied to an exact 2-year overseas assignment period, then your employer asking you to return 4 months earlier makes the bond null and void unless there is a prorated clause indicating how the bond period and the assignment duration correlate.
The company also needs to determine and confirm the exact amount of training costs and expenses, and the penalty can only be claimed in line with these factors. Stating exposure to the client and new technology does not hold legal validity. It must be proven that the training provided to you was beneficial for your personal development as well. This is challenging to prove, especially when the company has been billing the client for the work you have been doing and making a profit.
Another aspect is that you were sent to work on the project as part of a company requirement and not by your request. Justifying the 2-year bond period and its reasonableness is crucial because during this period, there should be no risk to your career where the company can withhold promotions and raises even if you perform well because of the bond. They cannot terminate you if they feel you have underperformed because it is part of the company's bond requirements that you complete the 2-year bond period.
There are many legal points to consider to escape from the contract. However, my personal advice would be to consult a legal advisor on how to manage this situation without damaging the relationship with your employer, so as to avoid any future risks.
From India, Bengaluru
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62Without knowing the content of the service bond that you signed, it would not be easy to provide an accurate answer here. As a tip, it would be good to ask a lawyer to examine the service bond and check if it is correct as per the Indian Contract Act of 1872. This could help in attaining the correct legal points in the first attempt.
In my viewpoint, it would not be easy for your employer to legally enforce the service bond, especially if you are able to highlight in court that this is more of a one-sided contract giving the employer an unfair advantage over you. However, initiating proceedings in this manner could harm the relationship between you and your employer and also jeopardize any chances of a positive future reference from your employer.
If I proceed on a general note regarding the points you mentioned, it is true that if the 2-year bond period is tied to an exact 2-year overseas assignment period, then your employer asking you to return 4 months earlier makes the bond null and void unless there is a prorated clause indicating how the bond period and the assignment duration correlate.
The company also needs to determine and confirm the exact amount of training costs and expenses, and the penalty can only be claimed in line with these factors. Stating exposure to the client and new technology does not hold legal validity. It must be proven that the training provided to you was beneficial for your personal development as well. This is challenging to prove, especially when the company has been billing the client for the work you have been doing and making a profit.
Another aspect is that you were sent to work on the project as part of a company requirement and not by your request. Justifying the 2-year bond period and its reasonableness is crucial because during this period, there should be no risk to your career where the company can withhold promotions and raises even if you perform well because of the bond. They cannot terminate you if they feel you have underperformed because it is part of the company's bond requirements that you complete the 2-year bond period.
There are many legal points to consider to escape from the contract. However, my personal advice would be to consult a legal advisor on how to manage this situation without damaging the relationship with your employer, so as to avoid any future risks.
From India, Bengaluru
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Thank you, @Nelsonthomas9102. That is an insightful reply. This is a sticky situation indeed.
To provide more information about the situation, the contract states that I, the employee, of my own free will bind myself to the 2-year period. The start and end date are stated, but there is no prorata clause. My employer did offer to reduce the bond period by 4 months, the same amount of time that they reduced my term in the host country.
The full expenses, which include the hardship allowance, accommodations, flights, freights, insurance, and other expenses involved in my assignment, will apply as liquidated damages should I leave the company. The amount to compensate was not explicitly stated in the contract but was mentioned in the email. It was only stated that I would have to serve the home company for 2 years after my assignment but no mention of the penalty should I break the bond after the assignment.
The nature of my assignment was to take up a position in the host company, doing work as an employee. There has been no mentor nor training involved.
The company is obligated to send employees to the host country due to the fees the host company has to pay the home company based on the number of expats sent to the host country. Due to an internal change in policy, the fees are no longer based on the number of expats. As a result, the home company requests for me to return in advance due to this policy change.
From India, Indore
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To provide more information about the situation, the contract states that I, the employee, of my own free will bind myself to the 2-year period. The start and end date are stated, but there is no prorata clause. My employer did offer to reduce the bond period by 4 months, the same amount of time that they reduced my term in the host country.
The full expenses, which include the hardship allowance, accommodations, flights, freights, insurance, and other expenses involved in my assignment, will apply as liquidated damages should I leave the company. The amount to compensate was not explicitly stated in the contract but was mentioned in the email. It was only stated that I would have to serve the home company for 2 years after my assignment but no mention of the penalty should I break the bond after the assignment.
The nature of my assignment was to take up a position in the host company, doing work as an employee. There has been no mentor nor training involved.
The company is obligated to send employees to the host country due to the fees the host company has to pay the home company based on the number of expats sent to the host country. Due to an internal change in policy, the fees are no longer based on the number of expats. As a result, the home company requests for me to return in advance due to this policy change.
From India, Indore
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Hi Partner,
It seems that it is your company which has breached the agreement by instructing you to return to your home company just because there has been a change of terms between the home company and the host company.
In software companies working in such situations, the observation has been that employees are initially billed by the hour, so it makes business sense to send more employees for increased billing. At a later stage, when the software has finally been hosted onto the client server, support for a short period is provided before the final closure. At this time, as in a fixed price project, the client will agree to pay a fixed amount irrespective of the number of employees working on the project. At this point, it makes business sense to reduce the number of employees working on the project.
In your case, the situation seems to be similar to what has occurred above where your company had recalled you due to changes in the terms between the client and the service provider. So, in my opinion, there is no legal obligation from your end to abide by the terms of the service bond.
Your employer cannot suddenly make up a prorating clause stating that the 4 months shall be adjusted. This also breaches the agreement.
Liquidation damage cannot be claimed as well because your company has profited from payments from the host company on account of the work you have been doing, and it was the home company that changed the agreement, not you.
This arrangement looks totally incorrect in every aspect from what I see. It is better to start discussions with your employer to drop the coverage of the service bond. If burning the bridges does not matter, you can discuss with a lawyer as well.
From India, Bengaluru
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It seems that it is your company which has breached the agreement by instructing you to return to your home company just because there has been a change of terms between the home company and the host company.
In software companies working in such situations, the observation has been that employees are initially billed by the hour, so it makes business sense to send more employees for increased billing. At a later stage, when the software has finally been hosted onto the client server, support for a short period is provided before the final closure. At this time, as in a fixed price project, the client will agree to pay a fixed amount irrespective of the number of employees working on the project. At this point, it makes business sense to reduce the number of employees working on the project.
In your case, the situation seems to be similar to what has occurred above where your company had recalled you due to changes in the terms between the client and the service provider. So, in my opinion, there is no legal obligation from your end to abide by the terms of the service bond.
Your employer cannot suddenly make up a prorating clause stating that the 4 months shall be adjusted. This also breaches the agreement.
Liquidation damage cannot be claimed as well because your company has profited from payments from the host company on account of the work you have been doing, and it was the home company that changed the agreement, not you.
This arrangement looks totally incorrect in every aspect from what I see. It is better to start discussions with your employer to drop the coverage of the service bond. If burning the bridges does not matter, you can discuss with a lawyer as well.
From India, Bengaluru
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