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Sachin Vishwakarma (Asst. HR Manager)     20 December 2011

Contract with an employee

Hello Everyone,


One of my friend is hired by a software company 1 year ago. He signed a bond with company for two years. In the appoinment letter it was mentioned in the column of Termination of the employement as:

1. Either party can terminate this employment by serving a notice of one month on the other, save and accept that the company may at its option pay salary in lieu of the notice period to terminate employment with immediate effect.        

2. You will be governed by the laid down code of conduct of the company and if there is any breach of the same or non conformance of contractual obligation or with the terms and conditions laid down in this agreement, your service can be terminated without any notice; notwithstanding any other terms and conditions stipulated herein the company reserves the right to invoke other legal remedies as it deems fit to protect its legitimate interest.


I want to ask some question as:

1. Can he leave the company by giving notice of one month without completion of his bond period?

2. Can company terminate him without giving one month notice? 

3. If the person in charge gives the notice orally not in written. Can employee be terminated?


Thanks & Regards

Sachin Vishwakarma




Learning

 21 Replies

Kumar Doab (FIN)     20 December 2011

1. If the employee has signed the bond, employee has to observe the terms of bond. The copy of the bond may be posted, however to maintain the confidentiality names etc may be erased.

When was the employee informed of condition of signing the bond, in the employment advertisement, during interview, vide offer letter, vide appointment letter, on the day of joining duties or after joining and issue of appointment letter? What is stated in the bond?

If the employee is willing to satisfy the conditions of bond, employee can tender notice/notice pay and separate.

2. NO. Company can give one month notice pay and terminate. However even if the termination is without any reason/or with a reason and if the employee has been wronged and wishes to contest employee can.

3. Oral/verbal termination has no legal standing. Company resorts to Verbal termination as a tactics thru its personnel/HR/ line management to extract resignation or block the employee from entering office and mark attendance, and declare him absconding and thus take an ill informed employee for a ride.

In such a situation employee who is being wronged should lodge protest in writing under acknowledgment addressed to good offices of the company.

You are yourself HR personnel and therefore you can guide and update your friend in a better way.

If your friend is facing a situation he/she must record everything in writing and obtain acknowledgment.

 

Sachin Vishwakarma (Asst. HR Manager)     20 December 2011

Mr. Doab

Thanks for helping me.

sanjay kumar (BE/ LLM in Corporate Laws)     22 December 2011

1. When your friend has signed the Bond, its over. Now..as per the terms of the appointment letter, the company, may accept his resignation with one month notice from your friend. But such right vests with the company alone and not with your friend.

2. Yes the company can still terminate him by giving One Month Notice because there will not be any such condition from the copmany that it will retain the employee for certain years.

3.As per the Appointment Letter, the Notice of Termination is to be "served". Oral notice cannot be termed as served. But the company can always manipulate this "serving" in its record in case of a dispute. The process of serving does not need acknowledgement. The boss can certify that he has personally handed over the Notice to the employee on such and such date. This certificate will deemed to be "served".

Pankaj (Area Sales Manager)     09 January 2012

Kumar sir,

 R u on line. i hv to discuss very important matter with you along with scan copy of my appointment letter. Sir, in offer letter, company has not mentioned any bond statment. the offer letter was offered me on 9th Feb and my appointment is on 17th Feb and on 17th when I signed my appointment letter, I found that one clouse was mentioned regarding bond statement, i refused to sign that but Manager Personnal told me that no body will deduct this amount as company didnot deduct this from any periviouse employee. So I signed that. And it was, I m writting the same lines: c) That in case of your leaving the job any time during the period of 2 years from the date of initial appointment letter or if you abstain or abandon the work or neglect your duty and employer are compelled to terminate/discontinue your services/traing for such reasons during the period of first two years, you shall to liable to pay the employer a fixed liquidated sum of Rs 20000 as the cost of incurred for providing training and feild training given to you during or before your appointment.

It was the clouse. the company has given me introductory training from 9th to 17th Feb and they didnot include this period in my services as they consider my first day job on 25th Feb.  They didnot pay my salary or any other expanses for these days, only gave me 145 Rs per day alownce. I didnot reside in company's rest house. and they didnot pay any this to rest house owner.

Now I have resigned before 2 years and they deducted 20000/ mentioning that the part of appointment letter is accepted and received by me and I had signed that.

Sir I was a part of managment, worked as state head of two full states working as a regional sales manager. In my views  If this is an agreement, then agreement shd be envolve both side equally. Second they didnot provide any feild training, or any other class room training after my joining consider by company on 25th Feb. I was straight way appointed on probation period, becouse of experience and productivity.

Now what shd i do. Kindly guide me. Can I claim this 20000/- or not.

Regards 

Pankaj (Area Sales Manager)     09 January 2012

one more thing I want to bring in your kind knowldge that one more regional manager was also with me on training, after taining he went back to his state and didnot join the duties. Compamy didnot take any action against him as he also signed the appointment letter. I came to know from few former employee's of the company that company had sent them deducted 20000/- but as they were not having any dues towards company so they didnot respond to the company and company didnot take any action against them too.

So I have been cought in this  as i resigned before getting my salary of tow months.

Kindly guide me.

Regards

Kumar Doab (FIN)     09 January 2012

One should never sign on the dotted line without consulting the elders in the family, competent and experienced well wishers, lawyer/law firm. If you were given an appointment letter on 17th and your joining date was printed as 25th then what was the hurry for you to sign the acceptance without really under standing the implications of terms and clauses expressed in it? You could have at least; very well, enclosed a covering letter stating that Manager Personnel has expressed that clause of liquidated damages shall not be applicable and obtained acknowledgment.

Believing the company after  the offer letter is supplied to him , the employee quits from the previous company and joins the new company, within the date specified by the company in offer letter.

After the employee has quit the previous employment the employee was made to attend some training programme. This training programme in all probabilities was product training programme, which company is under obligation to conduct for its products and related marketing strategies. Denying salary for such programme is unethical and unfair.

Is the employee supposed to understand the products and strategies of the company on his own and his cost before joining and during employment?

After completion of training  programme and after the employee is made to join the duties, employee is asked to  sign an appointment letter containing clauses binding the employee to pay liquidated damages and an oral committement  is made by Manager -personnel which is a good office of the company, that this amount  shall not be deducted. You may charge this employee in his personal and professional capacity.

Why should an employee pay liquidated damages for product training which has nothing to do with enhancement of qualification or skill of the employee. Who provided this training, some trainer on rolls of the company, or some outside faculty, and how many participants attended this training? How does the company arrive at a sum costing Rs. 20000/ person?

What were you made to do from 17th to 25th after you signed your appointment letter on 17th and why no salary for this period was paid to you?

You should approach a competent and experienced service lawyer as ap with all records and explain the matter.

Even the Regional Managers of many companies are competent to approve leave, they act only as forwarding point to Head Office, appoint or terminate, their reportees and some of them in pharma sector have represented to o/o Labor Commissioner.

You may visit o/o labor Commissioner/wages inspector and discuss in person also. They are supportive and helpful. It is not necessary to be represented by a lawyer. If you do not send a lawyer, company can also not send their lawyer. It  shall be appropriate to proceed under expert advice.

Pankaj (Area Sales Manager)     09 January 2012

Sir,

          I am realy thankful to you for your kind advice. there were 17 people who were getting this training. I will definatly follow your advice by 2moro and meet my area's labour commissioner/wages inspector 2moro only. I will inform you all the devolpments 2moro evening.

Regards and thanks a lot.

Pankaj (Area Sales Manager)     09 January 2012

Sir,

The company considered my joiniing date, when I started feild working on 25th feb after reached back to my HQ.  I was released from office on 17th, after introductry meeting, then I have to sign the appointment letter in the office, only before leaving for my HQ and company has taken my resignation of previouse emplyer in the training time . That was the reason, so I was being forced by the circumstances to sign it.  

Kumar Doab (FIN)     09 January 2012

This implies that this company asked you to resign (from your current employment at that time) and perhaps dictated you the resignation letter, and perhaps collected it from you and posted it on their own.  Thus they kept you unemployed for coming ……….days. Did you suffer loss of notice pay from your previous employer? Did this employer compensate you for notice pay?  You should demand this amount.

Perhaps they have done the same with all 17 candidates who were with you. If all of you can be a witness to each other then all of you can lodge a complaint at your respective locations and make this company run to 17 locations.

You all can tame and shame them. Include the name of this manager-personnel in his/her personal and professional capacity.

It is nonce again suggested that you should sit with elders in the family, competent and experienced well wishers, lawyer/law firm, prepare your notes and strategy and jot down the points you should and you should not put before any forum including o/o Labor Commissioner/wages inspector.

Do not hurry. Prepare well. Do not leave any loopoles. Be smart.

Pankaj (Area Sales Manager)     09 January 2012

ok . thanks sir,

i was in touch with two UP managers, both had left. other people were from West Bangal. Aasam nd few from south, Chennai and kerala. I didnot got any call from them. I dnt know even from which place they were posted for. But I will definatly act according to your advice. but I want to tell you that I dnt hv any brother or sister elder to me, nor frnds belongs to this proffession. So I am alone to take the decision. But sir, I have to bring this in commissioner's knowldge. What do you think?

Regards  

Kumar Doab (FIN)     10 January 2012

It shall be better if you can  visit an experienced and competent service lawyer/labor consultant, with all records,before you start. 

If there are financial constraints you can explain these to your lawyer. Your lawyer maty agree to guide you at very nominal charges or even may not charge at all.

If possible go thru the provisins of IDA.

Pankaj (Area Sales Manager)     10 January 2012

Sir,

2day I met with Labour commitioner. He told me that Labour commission is helpless as my salary is too big. They can take the cases upto 12000.

Sir what is IDA. Kindly tell me in detail.

Regards

Kumar Doab (FIN)     11 January 2012

On your own you may not be able to handle your case.

It shall be better if you can  visit an experienced and competent service lawyer/labor consultant, or a trade union leader,.with all records.

Kumar Doab (FIN)     13 January 2012

Pls send your email id, contact details, by PM. We may be able to refer you to some of the  Area Sales Manager who have successfully contested their case in Labor Court and have won.

You may confirm you were in which sector e.g. Telecom, FMCG, Pharma,  etc.


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