I have joined one of the leading IT company on sep 2009. Before joining, i had to sign a service bond, on the non-judicial stamp paper of 100 rs. I had undergone through the training provided by them. The bond to provide them service is for 2 years. It is mentioned in the bond that, if howsoever, in any circumstance, i leave the organisation before the completion of bond period, i will have to pay an amount of 2 lakhs Rs. I have been given very less salary competitive to other IT companies. Now, after 6 months in the company, i felt that there is no future in the current company with respect to career and money, so i given interview in one another MNC. I got selected there with a much higher package, now the new company is asking to get relieving letter from the previous company. My concern is, can i break the bond in this circumstances? if yes, what could be the implications of this? Would this bond be legal, as they have given me training for 4 months? is there any other way to leave the current company? Please help me, i am getting too frustrated here. Also, if i break the bond, is there any possibility that they put me in abscoded list? or even can they put a check on visa process?
Advocate Supreme Court and Delhi Courts.
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Posted On 22 March 2010 at 00:52
If your can convince your new employer , request for joinning without relieving certificate. In that case if your old emloyer take any legal action, you may challenge the bond on the basis of absence of free consent i.e. consent under undue influence.
In all humility I beg to differ with our Senior Collegue Dr.V.N.Tripathi for the following reasons :
First of all any service bond is a binding contract and as such if you now choose to leave your present job your employer does have a right to persue a court case enforcing his demand upon you. As such even if your prospective employer allow you to join without relieving certificate that won't solve your problem.
Your problem if put in the right perspective does not relate to legal but to HR perspective it would be better that you may first take your immediate boss in confidence and than after having a NOC have a word with the HR department with a request to find an alternative in your place on ASAP basis. Once this being done I do not see HR will be having any issue in terminating the bond amicably without any hassle in this regard. My point is if today you take your organization for granted tomorrow they will certainly try to put you in fix. As such in the fitness of things try to have a amicable solution by the inter face of HR.
This issue has cropped many a times in the forum and senior colleague like Tripathi and others have given quite a practical solutions. Please check through the related topics/similar threads. The Bond although binding is subject to the fundamental rights and subject to proof of expenses on the trainings. - The Company should provide strict proof of expenses they have incurred (direct expenses like travelling, accommodation, training fees, etc.) The expenses should not cover your regular salary and allowances, any sum spent on training on regular job skills etc. The training should have been for up-gradation of high professional skills and only those expenditure that are incurred on this directly can be claimed. Please start a dialogue on these lines and strike a balance for an amicable solution.
Artical 25 of Constitution has given fandamental right of profession but subsquently comes authorities of court which limited this right with some conditions as service bond is concern it is legal and company can recover amount which incrrude on your training. So settle it on your hand.
Thanks a lot to all of you. I still have confusion. They invested training in me, but that was for their purpose, so will that be considered as investment oon me? No doubt that training is beneficial for me as well. Also, if it is rights given by Artical 25 of Constitution, then how they would be able to file a charge against me? I am too much scared, so may be i am asking completely dump questions. They have mentioned in the bond that this is based on Arbitration & Concillation Act, 1996. Does this provide them, certain more rights?
Unilateral Agreements are un enforceable. But the Training offered by the Company is consideration for the Bond. But without going through the entire service bond the advice will not serve your purpose. Better to contact a Lawyer with full version of the agreement before breaking the Service Agreement.
"all disputes arising under, in connection with and in relation to this agreement shall be resloved by way of arbitration under arbitration and conciliation act 1996, through a sole arbirator appointed by the company. the award passed by the arbitrator shall be binding on the parties therto.
the venue of arbirtration will be hyd and the courts of hyd shall have the exclusive jurisdiction"
THIS MEANS THAT THEY MIGHT GET THE DECISION IN THEIR FAVOR? ARBRTRAR CAN B BAISED? FOR ME THER WAS NO TRAINING?