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need advice (l)     31 December 2012

What steps to take for absconding employee

 

urgent need of advice 
 
one employee who joined on June 2012 at chennai as Associate Mentor and hq at hyderabad and worked for four months, while joining he signed 100rs non judicial stamp paper agreement for 2 years and he had given a undated cheque given for two months salary if he leaves within the agreement period of two months basic salary.for the training and damages.He left the company on october and without any notice period nor informing the head of his department. when hr department sent a notice to rejoin and he sent a message through his mobile that due to family and health conditions he is not able to do the job and consider it as resignation
 
even though we sent another warning letter to rejoin or surrender the company property
 
now we had deposited the cheque and it was dishounered for UNSUFFICIENT FUNDS and we 
sent him legal notice 
 
 
as per the agreement clause 
 
That in the event of the Employee leaving the services of the Company before the Expiry of the period of the Contract, as also in the event of the Employee making it obligatory or necessary or expedient on the part of the Company to terminate his/her services for any reason of whatsoever nature and for all things, the employee shall be liable to pay and shall pay to the Company a sum equivalent to Two Calendar Months (present salary) by wayof agreed liquidated damages and the Employee agrees to pay the same without any proof of actual damages suffered by the Company being required to be produced.
 
 
That the employee has to submit an undated cheque equivalent to two calendar month present salary (mentioned in point no. 6) at the time of signing the agreement.
 
as i am urgent need of advice and how to proceed....  


Learning

 6 Replies

Sudhir Kumar, Advocate (Advocate)     31 December 2012

file civil suit

Kumar Doab (FIN)     01 January 2013

This is an interesting discussion. The Forum is for healthy discussion and to dwell on the subject in the tread.

The following is heartfelt opinion only and is not authoritative or commanding or a final advice and is not aimed to offend or argue.

Valuable advice of learned experts/members is sought. It is requested that the discussion may kindly be taken further with tangible and prudent comments.

You have posted that:

--“That in the event of the Employee leaving the services of the Company before the Expiry of the period of the Contract, as also in the event of the Employee making it obligatory or necessary or expedient on the part of the Company to terminate his/her services for any reason of whatsoever nature and for all things, the employee shall be liable to pay and shall pay to the Company a sum equivalent to Two Calendar Months (present salary) by way of agreed liquidated damages and the Employee agrees to pay the same without any proof of actual damages suffered by the Company being required to be produced.”

Even if the company terminates the service instead of company tendering notice pay employee shall tender two month’s pay. Company does not need to tender any proof of expenses incurred/suffered by it. 

The employee has to submit an undated cheque.

The question arise can such a clause and condition in contract of employment stand the test of law???

Is the cheque against a dischargeable debt?

{ MERE USE OF WORDS "LIQUIDATED DAMAGES" AND "PENALTY"' IN A CLAUSE NOT TO BE DECISIVE. The parties who use the expression `penalty' or liquidated `damages' may prima facie mean what they say, yet the expressions are not conclusive.  }

Is such a practice legal or is this practice illegal, unfair, bad, unethical…….and punishable????

If such a practice is permissible then won’t it be better to ask the employee to mortgage the family house, in favor of the company.

In times to come companies may start asking to pledge the family jewels in the name of the company as losing the family jewels is considered utmost shame in society and hence employee shall come running with his entire clan to take back the family jewels.

Such contracts are apparently crafted by an expert of the company as per specifications given by the company. The expert who has crafted this contract is best placed to advice further whether to file a recovery suite, case under NI act, criminal complaint with police to lift and imprison this employee and thus shove the arm down the throat to squeeze the money out of the employee.

It is felt that companies which are into such practice shall subject the employee to a drill of tactical actions aimed to subdue the employee to surrender to the tantrums of the company and the employee does not approach a lawful authority.

“stay away from any company that asks for a "security deposit".

It is felt that candidates should be good enough to understand that such contract shall be too demanding, coercive and shall lead to exercises of pressure and candidates should walk out of the interview and leave the recruiters gaping.

The campus placement exercises are going on. If it is done from this year it shall have an impact from this year.

With limited understanding it is felt that it shall be better to close such matter to the issue of notice of employee and speculate on the reasons why employee{s} do not stay despite the so called and so stated training in the contract of employment and despite that companies collect deterrents like undated cheques.

Apparently the environment is like that employee can not stand”

“Give Cheque , Take Job”

The attached Article is although perturbing, but it is a steek comment on present day situation, and is thought provoking.

The Labor minister had to state that the govt. shall look into the matter. Karnataka has ended the blanket exemption from IESI act and within 6 month’s the companies should frame their standing orders.

Some court judgments on undated cheques which may set the course for discussion are also enclosed.

The learned experts/members may find conditions in Singapore interesting:

https://www.mom.gov.sg/foreign-manpower/passes-visas/work-permit-fw/before-you-apply/Pages/security-bond.aspx

 

The security bond is signed between the employer and the Government. The Foreign Worker is not required to pay the security deposit.

Conditions of Security Bond

  • During the Work Permit holder's stay in Singapore, the employer is responsible for the prompt payment of salary and the costs of his upkeep and maintenance, including medical treatment.

And materials at following thread interesting:

https://vfxsoldier.wordpress.com/2012/07/25/prime-focus-exploiting-indian-workers/

 

 

https://forum.murthy.com/index.php?/topic/12228-employer-denied-to-return-security-deposit/


Attached File : 167965438 give cheque take job.doc downloaded: 154 times

V. VASUDEVAN (LEGAL COUNSEL)     01 January 2013

The Agreement as described in the query, is illegal and void. Any term or terms of an employment agreement binding an employee, stipulating such unfair terms contrary to law will be void to that extent. In this case the employee is said to be employed in Chennai and therefore, the Tamil Nadu Shops & Establishment will apply. This Act does not permit any such recovery by liquidated damagers or otherwise hence any terms of agreement executed between the employer and employee shall be contract to the provisions of this Act.

Vasudevan

jagadish paranjape (Advocate)     01 January 2013

The word absconding is derogatory and objectionable.Employees are not bonded labour and they are at liberty to leave employment.The bond in question is unequitable and illegal.It gives power to employer to recover two months salary even in cases of termination and the employer is the sole judge to decide justifiability of termination.

Such bonds are generally taken to recover the cost of training abroad, when employee leaves service in breach of contract.

The contract in queston can not be enforced in court unless actual damages are proved.

2 Like

need advice (l)     03 January 2013

 

thanks experts
 
1. employee sent a mobile sms for resignation to his Head of the Department through mobile thus this is 
acceptable 
2, when our HR Department sent a notice through email to rejoin or communicate him  through
personal for not rejoining the duties from his end there is no reply 
3.  our department deposited the cheque and after returning for insufficient funds, 
the department sent a legal notice but it was returned saying without instructions
you have sent the notice 
 
MY QUESTION IS TAKING BOND SERVICE IS NOT VALID BUT WHEN HE SUFFERED ONE YEAR
WITHOUT JOB OUR ORGANISATION HAS GIVEN HIM A CHANCE TO WORK BY TAKING CHEQUE WITHOUT ANY 
RESPONSIBILITY if HE LEFT WITHOUT PROPER COMMUNICATION AND THIS MAY FOLLOW WITH OTHERS SO OUR 
HR DEPARTMENT WANTS TO TAKE THIS STEP AS A SERIOUS 
 
( our senior Mr.Kumar said that give cheque and take job in this competitive world is appreciable....)
 
PREVIOUS ALSO OTHER EMPLOYEES WHO WERE ON BOND ALSO LEFT AND THEY A REQUEST FOR RESIGNATION 
OR TOLD THAT THEY GOT ANOTHER JOB AND LEFT WITH GOOD TERMS neither we had accepted any bond 
value or we made any conditions and 1 or 2 employees left without notice period also they 
left 
 
 
this practice of leaving midway when we assigned him a project after giving him training 
and for company this may take some time to train other person and place him on that job but 
if the project is not completed in time then the credibility of the company in the market 
will be effected and company is on such projects employed and what about other employees
who are sincere to the company if any thing goes wrong for only one person in this 
competitive world 
1 Like

stanley (Freedom)     23 September 2016

@ Author 

 

1. Bonded Labor is illegal in india .

2. He is not your slave . 

3. You have forceably abstracted a cheque from him which is wrong on your part .

4. You have deposited the cheque after filling the details like date and Amount which renders the same invalid without taking the consent of the party who gave you the cheque .

5.              87.Effect  of  material alteration:

Any material  alteration of a negotiable instrument renders the same  void as  against any one who is a party thereto at the time of making  such alteration  and does not consent thereto, unless it was made in  order to carry out the common intention of the original parties:

Alteration by indorsee _   And  any such alteration, if made by an indorsee,  discharges his  indorser  from all liability to him in  respect of the consideration thereof.

The  provisions  of  this section are  subject  to  those  of sections 20, 49, 86 and 125.

The employee  issued a blank cheque without mentioning the date and amount– Act of complainant in filling up amount portion and date was a material change and it could not be enforced even though it was issued for a legal liability – Alteration without the consent of the party who issued the cheque rendered cheque invalid.
 


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