Service agreement
weettute
(Querist) 31 August 2012
This query is : Resolved
I have joined a private IT company. My service contract and appointment letter have a clause that if I leave the company before completion of 1 year from the date of joining I shall be liable to pay the company an amount equal to 3 times of my gross monthly salary. The company also incorporated the same clause that even if it terminates me for any reason it reserves the right to recover from the the same amount in addtion to other costs like training, cost of hiring etc. I did not realise the consequences of this clause as I did not have intention to leave the company before completion of 1 year but now i observe that company is trying to find fault in my work to prepare an excuse for terminating me.
Will the company be successful in recovering the amount from me legally if it terminates me for any reason.
Whether any such condition is legal and binding on employee as normally the companies are bound to pay the sum equal to notice period if the employee is terminated but in my case the company has incorporated clause which goes in its favour in both the cases.
Pl reqply with your expert advice quoting the relevant law.
Thanks
MAQ
ajay sethi
(Expert) 31 August 2012
contract is one sided . if termination is without any just cause compnay would find it difficult to recover 3 months salary from you .
Under Sec 66 of the Shops & Establishment Act,1948 , an employer need to pay the notice period in case of immediate termination it is also provided that any termination due to misconduct, employer need not pay any notice period or wages in lieu of notice period.
venkatesh Rao
(Expert) 31 August 2012
ajay sir is correct. No more to add.
