Service bond

Dear Harsh*t,

why r u leavingthe organization???? is there any problem working there or the reason is some personal reason.

Gernerally companies do ask the employees to sign such bond. But don't worry such issues can be handled.

You may call on below number for legal assistance.

Regards,

Advocate Rohit Dalmia

9324538481

Mumbai

Dear Sir,

Thank you for your reply,

Because of work enivornment in organisation is not good ,unecessary pressure and no guidance and direction is provided by seniors,

HR is also not communicating i have served my notice period as per my agreement 

Sir do i have to pay bond amount as i have not completed my training period 

Below is the one of the imp clause mentioned in service bond .-

"The Trainee has agreed and undertaken with the Company that after the successful completion of the training, in the event he / she is selected to be employed with the Company, he / she will faithfully serve the Company in whatever position he / she may be placed in by the Company for a minimum period of one year from the date of such appointment with the Company. The trainee further agrees and confirms that he / she will not engage in a similar business as that of the Company as an employee on any basis or in any other capacity whatsoever for a minimum of one year after ceasing to be in the Company’s employment on account of his / her leaving the Company for whatsoever reason including but not limited to resignation or dismissal or removal by the Company as aforesaid."

Sir please let me know what is meaning of this clause.

Thank You

You may go thru thread initiated by another employee which is almost similar.

https://www.lawyersclubindia.com/forum/Is-service-bond-is-legal-74011.asp#.USt-AkpMe8A

You may also go thru attachments.

Apparently you are appointed Trainee under management’s standing orders.

The company might have followed such model standing orders under IESO Act as in state where you are employed.

COMPOSED ASPER THE INDUSTRIAL EMPLOYMENT (STANDING ORDERS)

3.   classification

f)    TRAINEE : Means a person engaged to undergo training in the training programme initiated by the management

or

STANDING ORDERS/SERVICE RULES AND REGULATIONS/ EMPLOYEE MANUAL

SCOPE AND APPLICATION:

2. CLASSIFICATION OF EMPLOYEES:

2.6   "TRAINEE / APPRENTICE /LEARNER" (Under the Management's Scheme) is a person who is permitted to learn a trade or skill for a period not exceeding One & half  year depending on the training required.  The Management shall display and issue a copy of the Apprentice Scheme with all the details.  The Management reserves its right to modify or amend the scheme from time to time depending on the requirements.

You may also go thru job advertisement, interview letter, selection letter/offer letter, standing orders, appointment letter, service agreement/ non compete/non disclosure clause signed by you in appointment letter or separate agreements signed by you.

The company which is contemplating such arrangements cited by you should state the applicability of Apprenticeship Act and its provisions in appointment letter.

If acceptable you may attach all of the relevant documents in this thread.

However you may erase the names etc to maintain the confidentiality.

 You may also go thru:

Central Apprenticeship Council

Government of India

Minis try of Human Resource Deve1opment guidelines on apprenticeship,

Apprenticeship Act,

scheme of apprenticeship for engineers (under The Apprentices Amendment Act 1973)

You may also log onto the details posted at website of

“ Board of Apprenticeship Training“ set up by government in your zone ( North, West, East, South)

e.g.;

https://www.boatnr.org/GeneralInfo1.html

---Apprenticeship Rules, 1992

6.Registration of Contract of Apprenticeship

8. Compensation for termination of apprenticeship

Obligations of Trade Apprentice (both in case of Major and Minor Trade Apprentices)

                             (Under Section 12 of Apprentices Act. 1961).

5. In the event of premature termination of contract of apprenticeship for failure on the part of the apprentice to carry out the terms and conditions of contract, the surety or the guardian may be bound to pay the employer such amount as may be determined by the Central/State Apprenticeship Adviser as and towards the cost of training in accordance with rates as specified under rule 8 of the Apprenticeship rules,1991.

Valuable advice of learned experts/members is sought.

Dear Harsh*t,

If i just go by that clause what you have displayed it seems that once you completed your training and once you are selected then you have to serve one year to the company.

Also, once you leave the company then you cannot join competitors of the company for one year.

you need not worry about it. 

Regards,

Advocate Rohit Dalmia

9324538481

Mumbai

Dear Sir,

Thank you very much for your advice ,please find below the service agreement  ,Sir please i need your valuable advice on this .

SERVICE AGREEMENT (BOND) Category - C300

THIS INDENTURE is made on this _____________ (date of joining) between

_______________________________________ (Name of the Trainee), Son of /

Daughter of ______________________________________ (Parent’s name), Indian

inhabitant, residing at (Permanent Address): _______________________________

_____________________________________________________________________

_____________________________________________________________________

and hereinafter called the ‘Trainee’ (which expression shall unless it be repugnant to

the context or meaning thereof mean and include his/her heirs, executors and

administrators) of the FIRST PART;

AND

__ and hereinafter called the ‘Company’ (which expression shall unless it be

repugnant to the context or meaning thereof mean and include heirs, executors and

administrators) of the SECOND PART;

AND

___________________________________________ (Name of the Guarantor),

Indian inhabitant, residing at (Permanent Address) __________________________

_____________________________________________________________________

_____________________________________________________________________

and hereinafter called the ‘Guarantor’ (which expression shall unless it be repugnant

to the context or meaning thereof mean and include his/her heirs, executors and

administrators) of the THIRD PART;

WHEREAS the Company has agreed to recruit the Trainee to pursue a Training

Program offered by the Company for a duration of 12 Months or any further

extension thereto on a monthly consolidated stipend of Rs____________

) at the discretion of the Company (hereinafter for brevity sake

referred to as “the training”).

AND WHEREAS the Company is going to impart exposure and experience to the

Trainee during the course of the training and is also going to spend certain sums of

money on the Trainee and, the Trainee has agreed to the terms and conditions

hereinafter contained as well as in the Offer Letter issued to him / her;

1

AND WHEREAS the Guarantor has agreed to guarantee the due observance and

performance of the terms and conditions herein contained on the part of the Trainee

without any breach or violation;

AND WHEREAS in order to assure itself, the Company has requested the Trainee

and the Guarantor to sign and execute this Service Agreement (Bond) as hereinafter

appearing.

NOW THIS INDENTURE WITNESSETH THAT IN CONSIDERATION OF

THE PREMISES, THE TRAINEE AND THE GUARANTOR DO AND EACH

OF THEM BOTH HEREBY AGREE, UNDERTAKE AND COVENANT WITH

THE COMPANY THAT:-

1. The Trainee has understood his / her responsibility and agreed to acquire knowledge and in the event he / she is offered employment with the Company post completion of the training, transmit the skills, knowledge and experience gained during the training to his / her colleagues, and to use the skills, and knowledge acquired in the training on the job.

2. The Trainee has agreed to diligently attend and complete the training to the satisfaction of the Company.

3. The Trainee has agreed and undertaken with the Company that after the successful completion of the training, in the event he / she is selected to be employed with the Company, he / she will faithfully serve the Company in whatever position he / she may be placed in by the Company for a minimum period of one year from the date of such appointment with the Company. The trainee further agrees and confirms that he / she will not engage in a similar business as that of the Company as an employee on any basis or in any other capacity whatsoever for a minimum of one year after ceasing to be in the Company’s employment on account of his / her leaving the Company for whatsoever reason including but not limited to resignation or dismissal or removal by the Company as aforesaid.

4. The Trainee agrees and undertakes that he / she shall not, directly or indirectly, either during the term of his / her training or thereafter, and in the event he / she is selected for appointment with the Company, during such appointment or thereafter disclose to anyone (except in the regular course of the Company’s business or as required by law), or use in any manner, any information acquired by the Trainee during his / her employment and training by the Company with respect to any clients, customers of the Company or any confidential aspect of the Company’s operations or affairs. Information subject to the provisions of this paragraph shall include, without limitation product information, process information, customer lists, supplier lists, etc., Company policies and procedures and financial information (including results, budgets and other financial plans and systems not already available with the public).

5. The Trainee with an intent to build his / her heirs, executors, administrators and legal representatives do hereby covenant with the Company that the Trainee shall from time to time and at all times keep the Company saved, harmless and indemnified from and against any loss or damage, sustained by the Company (the Computation whereof by the Company shall be final and binding on and be accepted by the Trainee/Employee without any demur or contestation) by virtue of the Trainee for any reason whatsoever not diligently attending and completing the training to the satisfaction of the Company and/or not continuing to serve the Company for a period of one year from the date of his / her appointment in regular employment (in the event, if he/she is offered the same) or divulgence, passing on, transfer, use, application or implementation by the Trainee of any information, details, data knowledge, techniques or names of the business, trade, administration, policies, management techniques, or relating to any matters or things connected to or with the Company procured, received, acquired or known by the Trainee as hereinbefore stated as also for the costs and expenses which the Company may have to initiate for enforcement of the terms, conditions and covenants herein contained.

6. The Company has at all times lien over and the authority of appropriating towards the recovery of the sum mentioned herein below, and any / all amounts receivable by the trainee / employee from the Company by way of stipend / salary, arrears of stipend / salary and all other types of remuneration, allowances and terminal benefits.

7. In the event of default or breach of any of the terms and conditions herein contained, the Trainee unconditionally agrees and undertakes to forthwith pay to the Company on demand a sum equivalent to Rs. 100000 as liquidated damages to the Company which is inclusive of the costs and expenses incurred by the Company for the Trainee and in the default of such payment within fifteen days from the date of demand with interest thereon at the rate of 12% per annum till payment or realization.

8. Notwithstanding anything contained hereinabove, the Company solely reserves the right to terminate the services of the Trainee at any time, with one month’s notice or pay in lieu or without prior notice at its discretion and take penal action as per the laws of the country, for breach of trust/agreement (terms and conditionsherein contained) / on account of non-performance, gross negligence/indiscipline/ non-adherence to the Company’s rules and regulations as revised from time to time in addition to any other action/inaction of the Trainee which is detrimental to the interest of the Company. The notice period upon absorption of the trainee in regular employment subject to successful completion of the training period is three months on either side.

9. The Guarantor do hereby agree that in the event of the Trainee in any manner and for any reason whatsoever committing breach or violation of any of the terms and conditions herein contained, the Guarantor shall forthwith on demand by the Company pay unto the Company the amount of the expenses incurred by the Company for the Training of the Trainee as may be certified by the Company ( which certificate the Guarantor agrees to accept without any demur or contestation ) together with the amount of liquidated damages in the sum of Rs. Rs. 100000/- together with the 18% interest thereon as aforesaid and the Guarantor do hereby further agrees that the liability of the Guarantor shall be joint and several with that of the Trainee and that any change or variation of the terms and conditions herein contained as between the Company and the Trainee or condonation or waiver by the Company of any breach by the Trainee of the terms and conditions herein contained or the rights of the Company hereunder, shall not absolve the Guarantor of his/her obligations herein in any manner whatsoever unless so done expressly in writing by the Company.

10. All Disputes or controversies or claims arising out of this Agreement shall be

resolved as and by way of Arbitration only. The Arbitral Tribunal shall consist of

a Sole Arbitrator, to be appointed by the Company. The Arbitration proceedings

shall be governed by The Arbitration and Conciliation Act 1996. The Language

of Arbitration shall be English and the venue of Arbitration shall be at Mumbai.

The award of Arbitration shall be final and binding on the parties of this

Agreement. It is agreed by and between the parties hereto that this Agreement

shall be subject to the exclusive jurisdiction of the courts of Mumbai.

Name & Signature of the `Trainee’:

Name:_________________________________________ Signature:

Name & Signature of the `Guarantor’:

Name::________________________________________ Signature:

For & On Behalf of the Company: 

( Authorized Signatory )

Place: Mumbai

Date: _________

Witnesses:

1. Name: _______________________________________ Signature:

2. Name: _______________________________________ Signature:

thank you 

You have posted that:

--“Because of work enivornment in organisation is not good ,unecessary pressure and no guidance and direction is provided by seniors,”

” HR is also not communicating i have served my notice period as per my agreement “

Do you mean to state that there was actually no training or classes conducted by the company and the trainees were put to work which was otherwise to be done by regular employees of the training??

This amount to failure of contractual obligation on the part of the company and the contract may be declared void.

What is the salary of a trainee and salary of a regular employee?

If your contentions are true company is saving by unfair means.

If yes the company is into unfair practices and is dodging the law and lawful authorities. The training is eyewash and designation of trainees is given to avoid payment of statutory benefits.

Does this company pay PF, ESIC…..

{ -Madras High Court

Nacchammai Cotton Mills Ltd vs The Regional Provident Fund ... on 6 September, 2011

BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT

11.The ground of denial by the petitioner, was that these employees were apprentices, and therefore, not entitled to benefits under the Labour Welfare Legislations.

-Karnataka High Court

Sundaram Industries Ltd. vs The Regional Provident Fund ... on 28 September, 1995

"2(1)- 'Trainee' is a person taken on the rolls of the company for purpose of learning a trade upon terms as may be fixed by the company and with a nominal allowance till otherwise and shall include

-Madras High Court

Workmen Of Pmp Textiles vs Management Of Pmp Textiles on 3 January, 2011

In the claim statement filed before the labour Court, it was contended by the workmen that they were all employed as regular workmen by the first respondent though they were all called as apprentices. They were paid meager salary. It was further contended that there was no training at all given to them as there was also no Trainer.

10.In this regard, I may say that one should not go by the nomenclature attached to the post but it is the nature of the job which is material.}

HR has maintained a studied silence. HR is not your employer. Employee should not limit himself to HR and line management. You should submitted a written representation under acknowledgment on your grievances to good offices of appointing authority, MD, Chairman or at least could have expressed in notice of resignation/subsequent communications to build favorable record.

--“AND WHEREAS the Company is going to impart exposure and experience to the

Trainee during the course of the training and is also going to spend certain sums of

money on the Trainee and,“

As per your post company has not been conducting any training and mere presence of line management in the company does not imply training is being conducted.

Has the company provided any training which would add to some special-extraordinary skill/qualification?

If company is acquainting the employees with its products/processes/strategies/systems then company is obliged to do it without any cost to employee.

-- It is mentioned and repeated ‘in the event he / she is selected to be employed with the Company,”

As in case of apprentice there is no guarantee of job after training.

“sum equivalent to Rs. 100000 as liquidated damages to the Company which is inclusive of the costs and expenses incurred by the Company’

Mere mention of liquidated damages does not entitle the company to it. Compnay needs to establish.

 --“he / she will faithfully serve the Company in whatever position he / she may be placed in by the Company for a minimum period of one year from the date of such appointment with the Company.”

The courts may not agree for such restrictions post termination of the contract.

(You may also go thru another thread. You may find the information and attachments relevant and useful in your case.

https://www.lawyersclubindia.com/forum/Joining-the-client-organization-75245.asp )

Is this company approved for conducting such training?

You may check with:

 “ Board of Apprenticeship Training“ set up by government in your zone ( North, West, East, South)

 https://www.boatnr.org/GeneralInfo1.html

Is your contract registered and Is the company claiming compensation as per guidelines set by the govt. as per Compensation for termination of apprenticeship in as per Apprenticeship Rules, 1992?

You may check ; SCHEDULE-V

(See Rule 6)

Obligations of Employer (both in the case of Major and Minor Trade Apprentices).

(Under section /I of the Apprentices Act, 1961)

Obligations of Trade Apprentice (both in case of Major and Minor Trade Apprentices)

(Under Section 12 of Apprentices Act. 1961

Inquire who is Central/State Apprenticeship Adviser and find out from him what is the cost of training in accordance with rates as specified under rule 8 of the Apprenticeship rules,1991.

You may also inquire if this company is approved for conducting such training programmes? You may also find out if Central/State Apprenticeship Adviser has ever conducted inspection and filed any report on this company? You may peruse the RTI route also. If no training was ever conducted as posted by you what is penalty imposed on the company and has the training programme of this company been scarapped? )

{ You may go thru thread initiated by another employee which is almost similar.

https://www.lawyersclubindia.com/forum/Is-service-bond-is-legal-74011.asp#.USt-AkpMe8A}

There is no point in stressing yourself and wasting time.

It shall be appropriate to consult elders in the family, competent and experienced well wishers, and approach an able labor consultant/service lawyer with copies of all documents and communications, give inputs in person and spend quality time with your lawyer, understand the merits  and proceed under expert advice of your lawyer, based on the merits in your case and as deemed fit at your end. Let your lawyer structure and draft your representations and build record in your favor, if the need be.

The arbitration clause posted by you.

You would need to address it, and your lawyer to prove the arbitration and ADR is unconscionable in your case.

You have posted that:

--“All Disputes or controversies or claims arising out of this Agreement shall be resolved as and by way of Arbitration only. The Arbitral Tribunal shall consist of

a Sole Arbitrator, to be appointed by the Company. The Arbitration proceedings shall be governed by The Arbitration and Conciliation Act 1996. The Language of Arbitration shall be English and the venue of Arbitration shall be at Mumbai. The award of Arbitration shall be final and binding on the parties of this Agreement. It is agreed by and between the parties hereto that this Agreement shall be subject to the exclusive jurisdiction of the courts of Mumbai.“  

Apparently the ADR/arbitration clause is inserted in the bond to gain unparalleled bargaining power for anticipated future dispute.

If the training programme of the company is not as per certified/standing orders of the management, if the apprenticeship act is not being followed, and if the company knows that it is not providing any training, it has used its clout in the job market to weave a web around the candidate and without obtaining any approval from the govt/it has inserted the penalties and amounts which are not in line with guidelines and rules/ if it does not provide PE-ESIC etc  then there is ought to be a dispute.

The company wants to subject the candidate to a dictator’s drill and subdue the employee so that employee is coerced and prevented from approaching lawful authority/court of law.

If the candidate agitates company may block PF, reliving letter, FNF settlement, service certificate, and then employee can not work in the trade for 1 year.

The employees are being shackled to remain enslaved for 2 years and suffer.

Moreover the ADR/arbitration shall be at thousands of miles away at Mumbai, and point of concern is mediator shall be selected by company (it may be even employee/associate/legal advisor/lawyer of company) who shall do nothing but to trouble the employee. Possibly employee won’t be allowed to bring in his lawyer. Even if allowed employee would have to hunt for a lawyer at unknown place and may have to pay exorbitant fees.

In the contract which demands all stipend/allowances to be returned, to pay 1Lac + 18% interest the employer has retained all rights with him including the arbitration and arbitrator implying the company shall have its own court at its own location its own judge and its judgment.

Valuable advice of learned experts/members is sought.

Dear Sir ,

Thank you for your reply.

Some points i want to mention :-

1) There is no specialized training provided only induction program was conducted and then directly on the field 

2)Consolidated stipend was given so there is no PF and other deductions.

I have worked only for a month so do i need to pay bond amount.?

Need your advice and guidance on this .

Thank You

---If the agreement/bond is as per Apprentices Act. 1961, then compensation has been well defined in the act:

8. Compensation for termination of apprenticeship

Obligations of Trade Apprentice (both in case of Major and Minor Trade Apprentices)

                             (Under Section 12 of Apprentices Act. 1961).

5. In the event of premature termination of contract of apprenticeship for failure on the part of the apprentice to carry out the terms and conditions of contract, the surety or the guardian may be bound to pay the employer such amount as may be determined by the Central/State Apprenticeship Adviser as and towards the cost of training in accordance with rates as specified under rule 8 of the Apprenticeship rules,1991.

APPRENTICESHIP RULES, 1992¹

⁽https://dget.nic.in/schemes/ats/Rules1991/Rules1991.htm)

8⁴      Compensation for termination of apprenticeship :

Where  the  contract of apprenticeship is terminated through failure on the part of any  employer  in  carrying  out  the terms  and conditions thereof, such employer shall be liable to pay the apprentice compensation of an  amount  equivalent to his three months last drawn stipend.

You have posted that:

---“There is no specialized training provided only induction program was conducted and then directly on the field”

The ground for bond as posted by you was:

“WHEREAS the Company has agreed to recruit the Trainee to pursue a Training

Program offered by the Company for a duration of 12 Months or any further

extension thereto on a monthly consolidated stipend of Rs____________“

If there was no training the agreement/bond may become void.

You have to now contest based on facts with the company. The guarantor and sureties may also be able to declare it void.  

If you are unable to drill sense into the heads and get relief from good offices of the company yourself, it shall be appropriate to visit with elders in the family, competent and experienced well wishers, an able labor consultant/service lawyer with copies of all documents and communications, give inputs in person and spend quality time with your lawyer, understand the merits and proceed under expert advice of your lawyer, based on the merits in your case and as deemed fit at your end. Let your lawyer structure and draft your representations and build record in your favor.

Your lawyer may opine you fall within the category of a workman and thus you may agitate in o/o Labor Commissioner.

If your establishment is covered under SE Act (Shops and Commercial Establishments) of the state you can approach Inspector under SE Act at your location. Your compnay is bound to display its registeration certificate on notice board/near entry/at reception.

You may approach your lawyer with all details, and proceed under expert advice of your lawyer.

Valuable advice of learned experts/members is sought.