Enforceability of employment service/surety bond.
Sunny
(Querist) 25 July 2015
This query is : Resolved
I am working as Asst Administrative officer in LIC India.
While joing, I had signed a Surety bond for Rs 2 lacs for minimum service period of 4 years.
Now after completing 1 year of service, I wish to resign from the job, since I have got a better job.
I would like to know that whether such a bond is legally valid and enforceable.
Isn't such a bond VOID as per section 27 of contract act.
Please throw some light on the issue with legal provisions and cases.
Please reply asap.
P. Venu
(Expert) 25 July 2015
The bond is enforceable only if the employer had given some special training and had incurred expenditure.
Rajendra K Goyal
(Expert) 25 July 2015
You have signed the Bond, it has validity and legally enforceable till any of its term is violated.
Kumar Doab
(Expert) 25 July 2015
The employees : JTO of BSNL joined hands and their unions succeeded to reduce the amount of Bond from lacs to few hundred rupees…………………and in their case training is imparted.!!!
The Bond in LIC was created in lieu of what?
M/s LIC has huge strength of employees and unions too.
Then there is other Govt. Sector General Insurance Companies.
Each company has been indulging in getting a BOND signed from all employees.
IRDA has made it mandatory for all insurance companies to get all employees certified by passing exam conducted by III (Insurance Instt. of India). Only sponsored candidates (sponsored by insurance companies be it Govt or Private) can appear for this exam.
The Fee is only a few hundred rupees.
The training can be by self learning online or offline mode.
There are internal and external trainers that cost a few thousand rupees for a big batch of candidates.
Now how come it justifies a BOND?
Since the training that cost a few hundred rupees/candidate, and fee is a few hundred rupees/candidate justify the need of BOND?
This training is requirement of the company mad mandatory by the regulator IRDA to operate in market and is need of the company to run its business for its profits and hence it is company’s need to enable its employees to handle the counters of the company.
This should be without any cost to employee and without any BOND.
You may go thru:
http://www.lawyersclubindia.com/experts/Payment-of-indemnity-bond-419196.asp#.VaioI7V-jMo
http://www.lawyersclubindia.com/forum/Breaching-service-agreement-solution--123924.asp#.VbMuybV-jMo
The reference of above threads is made so that you consult an able lawyer specializing in such/labor/service matters NOW so as to build favorable written record and succeed.
T. Kalaiselvan, Advocate
(Expert) 31 July 2015
If you are a member of the Officers association of LIC, you may consult the secretary or president of the association to help you overcome the situation if it is really critical or can take their guidance to solve this otherwise.
Legally, you are bound to honor the commitments to the employer.
