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akash (LNT)     23 January 2012

Clarification regarding service bond agreement breach

Hi, Am akash, B.E graduate in mechanical and i got selected to L&T ECC(now LnT construction) and was working in company from august 2011. My problems are- 1. The working hours is min 13hrs(15 including travelling) 6 days a week. 2. Need to work on sundays also half day and no extra pay will be given. 3.While recruiting they said 11 months trainin will be given and then absorbed as engineers but only 3 days orientation prog was held and we were made to work like any other engineer from first day itself. 4.Treating of engineers is very bad and they treat us like labours. Due to all above reasons and many other factors made me to go to kind of depression and i quit the job after working for months without informing anyone. Now i have received a letter from company to pay 2 lakh rupees as liquidate damages to company as per UNDERTAKING taken by me and GUARANTEE provided by 2 guaranteers to serve the company for min 2 yrs .They have asked to send the amount in DD or else further legal action will be taken. Since it was a one sided bond and nothing was mentioned about working hrs and place, does bond stands? Plz help me and guide me what to do further as my parents are tense coz we cant pay 2lakhs as we are middle class family


 10 Replies

Kumar Doab (FIN)     23 January 2012

Approach a competent and experienced service lawyer as ap and your lawyer shall do the needful.  Your lawyer shall need to examine the appointment letter and liquidated damages clause etc.

You should have submitted a written representation under acknowledgment addressed to good offices of your appointing authority, MD, Head-HR, GM-Personnel, and Company Secretary covering all points you have mentioned in your post.

If you were under any fear psychosis during the employment you could have submitted the representation while you decided to abscond. You should have not absconded. You should have lodged your grievances in writing under acknowledgment.

Do you have any attendance record or any record to establish that you were made to work for 13 hours at a stretch daily and half day on off day ( Sunday) without any pay/compensatory off, and you were treated badly.

You could have placed on record that employer is unworthy of being employed with.

If 3 days training was just an induction programme during which introduction to the company, work place etc was given it can not be termed as a training programme on which company has incurred expenses and thus added to the skill of the employee. Each company is deemed to introduce the products and works of the company at its cost to the employee.

One should always consult elders in the family, competent and experienced well wishers, trained legal mind/lawyer/law firm before acting in haste in such important matters. It is always better to consult in time than to repent and suffer later.


V. VASUDEVAN (LEGAL COUNSEL)     23 January 2012

The whole contract is invalid. Neither the Shops & Establishment Act nor the Model Standing Orders (applicable to L&T) permits such a training for engineers beyond six motnsh. Also exploitation of any class of employees in the guise of training is illegal. Reply to the legal notice stating simply that the Employer himself has fulfilled the promise under the contract of providing training, the whole contract and the bond are infructuous and void.

ALso file a complaint with the labour labour commissioner, setting out the details of working ours and forcible overtime, not providing weekly holidays etc. 


Kumar Doab (FIN)     23 January 2012

Learned Mr. Vasudevan has given valuable advice. Kindly follow it.

The company has said or written in your contract that 11 months shall be training period?

Did you recieve any notice for declaring you absconding and order of termination.

You may act as ap.

akash (LNT)     24 January 2012

@Kumar Doab I completly agree with you sir but at that moment i couldnt have stayed even one day more such was the condition and am not the only one, already 6 trainees have left like me, such is the condition there. @Vasudevan Thanks a lot sir for giving me confidence. @kumar doab Yes sir, in the bond agreement they have clearly mentioned 11 months of training. They have sent a letter saying you havent reported to work from such such day and report back. They havent sent any termination letter. I have one thing to ask everyone sir, They havent sent me legal notice still and they have just sent a letter in company letter head and as per my knowledge LnT ECC have never went to court against trainees breaking bond, so should i wait till i get legal notice or should i consult a lawyer now itself. Thank you.

Kumar Doab (FIN)     25 January 2012

"Should i consult a lawyer now itself"

Yes- as your lawyer shall be able to give expert advice based on all documents, records and inputs given by you covering all points as posted by you and structure and draft your communications in a manner so as to favor you in the long run.

If your company invites you after getting your representations and thus if you can settle the matter amicably without any adverse affect to you, this shall be the quickest and easiest solution. Companies are known to file the letters suitable to them in the personnel file of the employee and maintain that these were sent to the employee.

If your company becomes rigid or maintains studied silence your lawyer shall be able to handle it.

You have the option of getting the relief as suggested by Mr. Vasudevan, at any stage.

H. S. Thukral (Lawyer)     28 January 2012

A contract of service can include the clause of liquidated damages. When breach occurs damages maximum mentioned in the contract can be claimed. However liquidated damages are not payable on asking. The claimant has to show that he suffered actual damages.

So let your employer if he intends to do so file a suit. You can contest it with grounds you have mentioned in your query.  

Leela (Trainee)     29 January 2012

@Akash: Can you please give us your mobile number.



Maneesh (student)     15 July 2012

I am also been selected in LnT construction this year as a PGET please suggest me i have to go or not.


In the choice of carrer, esepcially in the budding stage, there could be challenges like the instant one. While the practice adapted by the employers in certain industry per se not acceptable, there are ample reasons for the industry to look for a binding contract for the trainees since it involves considerable amount of investement, resources and alst the challenge with your own perspective and if the program offers enough challenges to your aspirations, capability building and if you willing to invest on hard work, before making a decision. 


Kumar Doab (FIN)     15 July 2012

Before joining any company as employee, one should enquire about the standing, products, ranking, work culture, HT practices, reputation, Training and development environment, work culture, track record of superiors etc. It is worth spending time before signing on the dotted line. Once short listed one should raise queries and satisfy on all aspects of the offer being made. Peruse and get everything in writing. One should show the offer and other documents to elders in the family, competent and experienced well wishers. In case the company has mentioned in advertisement, during interview, vide offer letter, that a bond or service agreement has to be signed one should obtain the soft copy/hard copy for going thru it. If there are penultimate clauses like non- compete clause, non disclosure clause in appointment letter that should be discussed and evaluated. It is worth retaining a lawyer/having access to a lawyer now a days.  It is as imp. as having a family doctor. After all education does not come cheap, it has become exceedingly expensive and demanding.

Student must form communities during their stint in institutions. These communities can be support centre for each other. Looking into the feedback of Akash L&T is avoidable. In the garb of training employees are treated shabbily at workplace and are harassed.

Choose companies with good HR practices. Such companies foster and mentor new comers, prepare them for future and have good grievance redressal system for eventualities. Avoid unscrupulous employers. Put these employers on portals like facebook, Mouthshut etc and caution others to stay away.

Don’t rush to sign on the dotted line, and check the legal traps before hand. Later the contract can become a catch in the neck.

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