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gokul (assistant manger)     11 November 2011

Breaking the employment bond

dear sir,

i am working in one indian company for last 14 months. i am working in indonesia. when i was joined, i signed a bond. the clause of the bond as per below.

1) Reciepient Mr. XYZ agrees to join the organization on or before 6th september 2010.

2) Moreover Mr. XYZ agrees to continue to work with the organization for minimum period of three years from his date of joining. 

3) In case Mr. XYZ fails to join the organization on agreed date, he will beliable to pay Rs. 50000 as commitment amount to the organization

4) Incase Mr. XYZ leaves the organization before completion of one year from the joining date, agrees to pay Rs. 1,35000 as a damage & cost incured on him for training. this is equalent for 3 months CTC.

5) Mr. XYZ agrees for all other clauses of appointment letter that will be issued to him on joining. clause mentioned here are apart from the all the clauses mentioned in the appointment letter.

 

so as per the above clauses 1, i have joined the organization on 6th of september. so clause no.3 is not applicable for me. today is 11th of november 2011. so almost 14 moths over after my joining. so clause No.4 stating that,  Incase Mr. XYZ leaves the organization before completion of one year from the joining date, agrees to pay Rs. 1,35000 as a damage & cost incured on him for training. this is equalent for 3 months CTC is not applicable. becasue i already completed my one year period this organization.

 

but my worry is that the clause No.2 stating that : Moreover Mr. XYZ agrees to continue to work with the organization for minimum period of three years from his date of joining. 

i would like to resign from this organization because of lots of internal problems. if i resign, will the company can go legal action against me for clause no.2. but there is not punishment or penality for clause no 2 stated in the bond.

and moreover the bond is in stamp paper and signed by notary. 

please suggest me what can i do????? i m under extream pressure.

regards,

gokul.

 



Learning

 22 Replies

kameswarao S (Head HR)     11 November 2011

As per the communication forwarded by you there is no penalty clause if you leave before completion of three years. The point No.2 says that you agreed to continue to  work for 3 years hence the company cannot take any action on you.

Regards - kamesh

gokul (assistant manger)     11 November 2011

Dear Kamesrao sir,

Thanks for your reply and make me confident. is it legal bond or just notary's signature. some of my superiors infomred me that this is one sided bond. one sided bond is null and void like that. is it true sir?

and is it registered bond? some of my friends told me that it is not registered bond. there is no registration no mentioned in the bond like that. can i send a bond file to you for your review and helpfull advice sir? 

regards

gokul

Kundan Kr. Singh (Advocate)     11 November 2011

Dear Kamesrao

 Madras high court  in the matter R BABU AND ANR VS TTK LIG LTD the division bench held that negative covenant restraining the employee from taking up employment with the third party he ceases to be an employee is violative under section 27 of the Indian contract act, 1872 and thus will be violative of public policy.

Every agreement by which any one is restrained from exercising a lawful profession trade or business of any kind , is to that extent void.

Delhi high court Judgement in this regard also PEPSI FOOD LTD OTHERS VS BHARAT COCA_COLA HOLDING PVT LTD &oTHERS.

gokul (assistant manger)     11 November 2011

Dear Kr. Singh sir,

to be frank i cannot under stand your statement

negative covenant restraining the employee from taking up employment with the third party he ceases to be an employee is violative under section 27 of the Indian contract act, 1872 and thus will be violative of public policy.

Every agreement by which any one is restrained from exercising a lawful profession trade or business of any kind , is to that extent void"

 

I would request you please explain me sir....if they file case against me for my clause no.2, will the case with them or with me?

 

how can i face this issue.

 

regards,

gokul.

Gagandeep Goel (Advocate)     11 November 2011

Hello Mr. Gokul

 

I have gone through the prepositions, I have come to the conclusion that you cant be forced to work under pressure..

 

Tell your employer that you are facing those problems and he should rectify the same. (Make sure that U give it in writing).

Then if the problem is not rectified, then u may give a resignation and leave the compnay.

In the presence of the legal documentation you can take can claim that the working environment did not allow you to work the way you wanted to work.

If it would be found genuine then you will not be under an obligation to pay any amount to the company.

 

Dont be afaraid of the legal proceedings. And the condition imposed for three years of compulosry service is unreasonable and against the public policy and hence cant be enforced in any court of law. It further voilates your fundamental right of life as, Right to Work in a good environment is equivalent to right to life.

 

Regards

Gagandeep Goel

+91-987-220-6969

gokul (assistant manger)     11 November 2011

Dear Gagandeep Goel sir,

i have given my resignation yesterday and the reason given is the personal family problem. because i know if i give the real problem what i m facing with the company, they will try to convince me and retain me. thats what happend to many people in our organization. financial problem is the main charactor. so idecided to quit. many time they retained the people by giving increment. now i m not interested with their increments. so i decided to go by giving personal problem as reasons.

if they go to the court, i m ready to fight with them. but my worry is that whether the case will go with them or with me? because it is one sided bond.....just in a stamp paper, they got signature from me...that too my signature on A4 white paper with matter filled. and they attached those signed paper with 50 rs stamp paper and notary signed on that. is it valid document or just to threaten the employee......

and as per my legal friends, it is not registered. it is just attested by some notaris......as per them if it is not registered with the government, then it is not valid....is it so? 

 

regards

gokul

 

 

Kumar Doab (FIN)     11 November 2011

Learned experts/members have given valuable advice. Kindly follow it.

You are the employee at you are closest to the reality and situation at your workplace. Hence you would have certainly taken a qualified decision. Moreover there is no penalty expressed in clause 2.

It is felt that you have hurried in submitting resignation. In such matters you should consult elders in the family, experienced and competent well wishers, lawyer/law firm. The employee should submit structured communications and raise the problems being faced in a smart manner. Especially when bond is causing stress, employee should establish that employer is unworthy of being employed with.

Be smart.

Abhishek (Business Operations Analyst)     11 November 2011

Hi Sir,

I was working in an organization from 2 years and I got an offer from another company for a lead position. I had to serve notice period of 2 months in my current company. The other company were putting pressure on me to join in one month. Say, I put down my resignation on 15th Sept 2011 and was suppose to join new company on 17th of OCT 2011.Somehow, i could able to convince our company management for serving 1 month notice period but due to some projects constraints i couldn't join the new company on 17th october instead I informed them that need two weeks extension for my joining day upon telling my current situation and they indeed agreed for that(Nov 2nd 2011 will be my joining day). 

Finally, on 2nd of november, i had been to new company with all my relevant experience letters and other documents. The company internally had some conflicts with the manangement and they said me that they cannot take me in as of now and they made me to hold for a week. Upon calling them over telephone, they indeed asking me for them to give some days of time for what they have to do on this. 

I am completely jobless now and I am sure they will not provide me employment in the new organization. What best I can do at this moment. I have hard copies of my offer letter provided by that company. I am little scared to face my future commitments if i wouldnt get any job at the earliest.

Please advice.

Regards,

Abhishek

Kumar Doab (FIN)     11 November 2011

Mr.Abhishek,

It is preturbing to note that you are facing this situation.

You may use your rapport, goodwill, negotiation, persuation, persistence skills and request your reporting authority, superiors, HR to take you back in your previous employment.

You have cooperated with them and helped them to complete the projects, and this has costed you, your new job. This seems to be the easiest, most suitable remedy. Your previous employer can absorb you back without any break in service. Your reporting authority at this stage can be of great help to you.

You should have asked for extension of joining date written in your offer letter, from your next employer. You could do it at least by email and you should have insisted to supply you the confirmation of extension by at least by email. You have made a blunder. Employee should never make such mistakes. It is always better to seek the advice of elders in the family, experienced and competent well wishers, lawyer/law firm before hurriedly signing on the dotted line and jumping to take decision, and committing a blunder. It is reiterated that advice of a legally trained mind is always economical in the long run. One should have, keep, maintain, and retain a legal counsel.

You can try to convince the concerned officials of the next employer including HR and mention that you have given up your employment based on their verbal confirmation to extend the date of joining, and now they should employ you. You should apply all of your skills and resources and obtain a written response that your joining date is extended to dated………

If nothing works, you can request the previous employer to give you another experience letter up to the date of joining in new job. They can do it. They may ask you to submit a written request and even supply you a model language suitable to them.

You should hunt for job aggressively. This is heartfelt opinion.

Valuable advice of learned experts/members is sought.

kameswarao S (Head HR)     12 November 2011

Dear Mr.Kundan,

As per the clause 2 the employee agreed to work for 3 years and there is no further bonding like if he leaves company before 3 years he has to pay some amount and all at the same time the company has not agreed to keep him for 3 years in the organization.

If they are not satisfied they might have given him 3 months notice and might have thrown him out. As per clause No.4 also they mentioned that if the employee leaves the company before one year completion the employee has to pay amount equalivant 3 months salary and they are silent on the part  ie., if the employer wants the employee to move out hence in my opinion this is totally one sided bond and it is null and void.

Regards - kamesh 

Abhishek (Business Operations Analyst)     12 November 2011

Hello Sir,

Thank you very much for your valuable advise. Yeah, i have commited a mistake in having a document of extension of my joining date. Recently, i had email the new company HR mentioning the overall situation that had happened so far. They have replied saying that what best they can do for me from their end and again asking for some more time. 

Can't I move forward legally asking for compensation? Please advise. 

 

Secondly, returning back to previous employment will make the management to treat me differently than what it was earlier even upon having good rapport with them. I am rigorously looking out for a job. Hope that happens at the earliest.

 

Many thanks,

Abhishek

Kumar Doab (FIN)     12 November 2011

Mr. Abhishek,

You may post yours and email of the new company. The email of the company may be sufficient to proceed legally if you wish to do so.

You should not be emotional. The past employer may not really treat you differently. One should avoid PCN (Pre conceived notions) and SFP (self fulfilling prophesies). Much shall depend upon how you handle the situation. Many employees leave company and join again. Many employers and recruiters contact old hands and are happy to have them on board, with them again. You are volunteering to suffer loss.

You should be practical and smart. However you may take the final call, as deemed fit.

1 Like

Abhishek (Business Operations Analyst)     13 November 2011

Hi Sir,

Thank you very much for helping me getting rid from my frustrations. Will try my best to re-locate into previous employment and make sure the happened mistake will not revert in my future again.

Many thanks,

Abhishek

Sudhir Kumar, Advocate (Advocate)     18 November 2011

No employer has right to restrict the employee choice to resign.  They can find charged under Bonded Labour Act.  They have no choice


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