(Guest)

I need immediate help regarding the bond and notice period

I am in a serious trouble and m very much confused as to what to do. I have joined a private company( IT Company) on 15 feb 2013 and they offered me a profile of client coordinator with a monthly salary of 15K in hand. It is basically a support Profile for some US based clients. I am a very bright student and have done MCA with an aggregate of 82%. But as I was a fresher and I was not getting any job so I joined this company. I have executed a bond of 1 lac rupee on 100 rs stam paper with this comapny and according to which I could not leave this comapny before 12 months.

But on 5 march 2013 I got an offer letter from another company who offered me a profile of software engineer ( development in java ) which is obviously my dream job. So I left this support profile without serving any notice period and joined this new company where I am a software engineer and m currently working here and m very happy and satisfied.

Now the problem is I got a notice from my previous company and they are asking me to pay a sum of 1 lac. The fact is, total period for which I worked with that company was hardly 21 days out of which 10 days were holidays (saturday and sunday). They have invested nothing in terms of training and all. I have taken my first salary (7500) from them, the only investment made by them on me. I left the job on 6 march 2013 and I sent them a resignation mail from my personal id on there official ID on 8 March 2013 and I talked to the HR and my Manager and appologiesed that I cant continue in a support profile as I am very ambitious and I ant to be in development and thats crucial for my carrier.

Now please help me what can I do in this case. Am I suppose to pay them 1 lac rs. I dont want to. I am not earning this much and I dont want my parents to undergo a burden of paying such a big amount or investing any money in court cases, Please help me..for a job that I did only for 21 days or less with no trainig at all. Why do I pay such a big amount. Please advice me as soon as possible.

the terms of bond are something like " should you wish to resign before 12 months from day of joining, you agree to pay the company an amount of Rupees one lakh at the discretion of the company as liquidated damages for the disruption of work and the possible loss of business to the company.

Notwithstanding any other clause of the letter of appointment the management reserves the right in its sole discretion without assigning any reason whatso ever, for the termination of your services with the company after giving you the notice of 1 month or 1 month salary in lieu thereof. "

This is written in my appointment letter. However the company has not provided me any compy of the bond that we have executed. Another thing is I was in the probation period when I left. Probabtion period was of 3 months and i left in 21 days.

Please advice me as soon as possible. Thanks in advance.

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3 Replies

RAJIV BHASIN (ADVOCATE) (Bhasin Legal Consultants(SOLICITORS & ADVOCATES) bhasin.laws@yahoo.com 9811210505) 25 April 2013

Dear Pallavi, The bond is illegal and void. No body can be restricted for better profession and job. It is sheer violation of Article 19 and 21 of Indian constitution. Better get the reply drafted from the lawyer experienced in service laws and reply them back. First of all tell your parents about this problem.Don't hide anything.Don't worry you don't have to pay anything. There are two Judgments of Delhi High Court on same point. Please feel free to contact me on my mail or mobile. Rajiv Bhasin (Advocate) bhasin.laws@yahoo.com 9811210505

(Guest)

Thank you so much sir. I will contact you once I discuss the entire matter with my parents. Thanks a lot.

1 Like

Kumar Doab (FIN) 29 April 2013

Mr. Bhasin has given valuable advice and has very kindly mentioned that thee are court judgments relevant to your case.

It is heartening to note that you have affirmed to consult your parents. As advised by Mr. Bhasin, it shall be appropriate to consult a competent and experienced labor consultant/service lawyer and to send a fitting reply to the notice and attempt to put the matter on a ‘Shut up Mode’.

Let your lawyer’s opinion be final on all points discussed in this thread, and you should proceed under expert advice of your lawyer.

Employee should always consult elders on the family, competent and experienced well wishers, lawyer/law firm before signing on the dotted line. It is always better to consult in advance than to repent later.

You have posted that:

-----“ you agree to pay the company an amount of Rupees one lakh at the discretion of the company as liquidated damages for the disruption of work and the possible loss of business to the company.”

The liquidated damages are for the possible loss.

Has the company proved/narrated/explained/itemized its loss to you in its demand letter to you?

Has the company agreed to pay Rs.1 Lac to you if it decides to terminate the service agreement, for the possible loss employee may suffer?

------“ Notwithstanding any other clause of the letter of appointment the management reserves the right in its sole discretion without assigning any reason whatso ever, for the termination of your services with the company after giving you the notice of 1 month or 1 month salary in lieu thereof. "”

Can employee also terminate the services without assigning any reason like employer?

------“ However the company has not provided me any compy of the bond that we have executed. “

This is unfair practice. Company should have provided a certified copy on the spot.

Did you object any time in writing or in office to such practice and demand certified copy?

You may raise a demand for the same and mention that company obtained your signatures on so many documents which you were not allowed to go thru and take out for consultation and company should supply you the copies of all documents it has in its record bearing yur signatures by redg. post only so as to reach you in next say 7 days.

Was this agreement was signed by any of the sureties /guarantors provided by you? If yes you may not mention that you have not seen the agreement………..However you may still demand that certified copy be supplied to you as the company personnel; signed after you and sureties………and copy signed by company was never supplied to you.

MERE USE OF WORDS "LIQUIDATED DAMAGES" AND "PENALTY"' IN A CLAUSE NOT TO BE DECISIVE

The question that arises is as to what is meant by liquidated damages, and secondly, whether or not the stipulation in the contract is in fact for penalty or liquidated damages. Under Common Law, a genuine pre-estimate of damages by mutual agreement was regarded as a stipulation for liquidated damages, a stipulation in contract in ierrorem is a penalty and the Court refuses to enforce it, awarding to the aggrieved party only reasonable compensation.

The use of the term penalty or liquidated damages by itself is not decisive, even what is described as liquidated damages could turn out to be penalty on the face of given case. The essence of penalty is a sum paid as in terroem while the essence of liquidated damages is a genuine covenanted pre-estimate of damages. A penal stipulation cannot be enforced. Liquidated damages must be the result of a genuine pre-estimate of damages and they do not include a sum fixed in terrorem. The question Is one of construction of a contract to be judged as at the tim c it was made, and mere descripttion as penalty or liquidated damages though relevant is not binding.

The company may claim it has suffered legal injury due to breach of contract.

-------“Another thing is I was in the probation period when I left. Probabtion period was of 3 months and i left in 21 days.’

3 months period during probation is unreasonable.

During probation employee does not have any lien on employment. During probation period company tests the employee and can terminate the employment without assigning any reason.

It may become necessary to terminate somebody during the

probation period itself for incompetence or for not working as per the requirements of the company.

The probation period can be extended by the company……….

During the probation period has the company covered you by PF, ESIC, gratuity etc……

Has it supplied you the pay slip and PF number?

You should not have acted in haste and you should have explained some reasons in resignation terming the employer as unworthy of being employed with.

All said and done Employee should also tender some notice of resignation as suitable, to employer even if the contract of employer does not entails to so and handover the charge and company property under proper acknowledgment.

You may approach your lawyer as ap show all documents, give inputs in person and proceed and proceed under expert advice of your lawyer.

You may find the attachments as useful.

Since you are in IT/ITES industry you may keep in touch with unions/employee groups:

https://www.itecentre.co.in/

Contact Us

Please contact us on
mail id : contact@itecentre.co.in.
ph : 9620907912

Please Join ITEC group for discussion among IT-BPO employees. To join the group, please send a blank mail to itec_bangalore-subscribe@yahoogroups.com

https://ithiworld.wikispaces.com/News+Update

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of women employees in IT and ITeS

Attached File : 733569250 417759075 validity of employment bonds.pdf, 733569250 background paper.pdf, 733569250 trade unions in karnataka.doc downloaded: 233 times