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Piyush (SE)     17 October 2011

Legality of service bond

Hi,


I worked for a private IT organization from the period of 1st June 2005 to 2nd June 2006. I was made to sign a service agreement which bound me to work for the same employer for at least 3 years or pay Rs. 50000 for liquidated damages.

I was getting a mearge sum of approx Rs. 6000 pm and the work conditions were very hostile, so I decided to quit the job after one year of service, but did not get my relieving letter. I couldn't serve any notice period as well and was ready to pay for the notice period amount mentioned in the Service Agreement (2 months salary).


I had contacted the employers for settling the matter and issuing me the experince certificate in 2007 as well, but they were not ready to help unless i paid Rs. 50000 + 2months salary + a few other charges.


I am attaching the copy of the service agreement which was made between me and the employer. Can someone please suggest if I can challenge this in court or not? I need an experience certificate to produce for my new employer.


Thanks in Advance,

Piyush



Learning

 20 Replies

Nahid (Head of Legal & Compliance)     18 October 2011

I have gone through the agreement you attached.

  1. The contract seems to me one sided.
  2. In such a case the courts give a less favourable view to the employer.
  3. However, for getting favorable view the employer will have to prove the resonableness of imposing restraint on your profession.
  4. You can serve them a legal notice.
  5. However, you may be required to prove that the training they provided doesn't worth such a damages or  restraint on your profession.

Please keep me updated.

 

Thanks in advance.

 

Nahid

nahidemon@yahoo.com

Surendra Singh Chandrawat (Lawyer)     18 October 2011

Attached Service Agreement for the period of 36 months seems unreasonable, you may send legal notice to company for obtaining experience certificate.

Piyush (SE)     18 October 2011

Hi Nahid / Suresh,


I sent a legal notice to the employer almost 3 weeks earlier but they are not ready to respond positively. There was no formal training provided during my tenure in the organization.

I learnt from somewhere that you can only challenge such agreements till the time of 3 years after the dispute. But it has already been almost 5 years now. Can this be challenged in the court now?


Regards,

Piyush

Nahid (Head of Legal & Compliance)     18 October 2011

YES.


The employer didn't raise any concern finding no reasonableness in favor of them.

 

Keep on moving.

Nahid (Head of Legal & Compliance)     18 October 2011

If you need the experience certificate, sue against them for that. In your case no limitation period will be considered as for your future career/prospect you may need the certificate.

Piyush (SE)     18 October 2011

Hi Nahid,


The reason i am a little apprehensive is if I lose the case after challenging in court, it may backfire on me. That's why i want to be sure on the time by which it could be challenged.

 

Regards,

Piyush

Kumar Doab (FIN)     18 October 2011

1. Work experience certificate/service certificate, FNF statement, form 16, PF accumulation reports and withdrawal/transfer forms, and acknowledgment of company property submitted by you can not be denied.

If you have not submitted company property submit as ap under proper acknowledgment and obtain comments that nothing is pending.

2. Company can sit on relieving letter which is released after all settlements have taken place.

Certificates/dockets mentioned at 1can suffice to be as good as NDC for new employer. All employers are aware of the practices in the trade and can accommodate you.

If the employer is adamant and is not responding you may approach o/o labor commissioner. If you do not send your lawyer to labor court and represent yourself, company also can not end their lawyer.

It shall be however appropriate to proceed under the expert advice of service lawyer/law firm/labor consultant. If you are a member of a trade union, you can be represented by union.

Surendra Singh Chandrawat (Lawyer)     18 October 2011

Its better to approach to labour officer directly marking the same notice (cc) to your employer for non-receipt of PF, FNF statement and relieving letter till the date and show the negligence on their part.

Surendra

Piyush (SE)     20 October 2011

Hi Surendra Ji,


I am not aware of the procedure to approaching the labour officer. Can you shed some more light on this?


I sent the notice to my employer with help of a lawer but he's also not very sure on the next proceedings.

Regards,

Piyush

SURESH GODBOLE (ADVOCATE)     28 October 2011

In my opinion NO CASE MADE OUT .

                                    PLEASE Pay them whatever they ask and get the Experience certificate .

                                    The Agreement is EXPLICIT and there is no Escape from it .

                                     Do not waste time energy and precious Money which may eat up at leaast 25-30,000 till you get a NEGATIVE ORDER FROM ANY COURT >

 

                                    Its my opinion , PLEASE GO THRO THE AGREEMENT , AND FEEL ONCE THAT YOU WERE THE EMPLOYEE , WHAT YOU WOULD HAVE DONE .WHAT HAPPENS TO THE PROJECT FOR WHICH YOU WERE TRAINED. AND YOU LEFT SUDDENLY .

                                    THe terms are favourably tilted towards the Employee .

kumar (tester)     29 October 2011

hi sir,
i have signed a bond of training-cum-employment on date 22 oct in this bond have promises like..breach,3 year service bond etc..and and i also accept offer letter on 22oct 2011..and my joining date is 16Nov 2011 but now i do not want to join the company..can this agreement legal before joining the job...but in agreement says that it works from 22oct..before joining its work for me??plz answer me i have very limited time

kumar (tester)     29 October 2011

hi sir,
i have signed a bond of training-cum-employment on date 22 oct in this bond have promises like..breach,3 year service bond etc..and and i also accept offer letter on 22oct 2011..and my joining date is 16Nov 2011 but now i do not want to join the company..can this agreement legal before joining the job...but in agreement says that it works from 22oct..before joining its work for me??plz answer me i have very limited time..plz answer this Question plz

SURESH GODBOLE (ADVOCATE)     29 October 2011

Pl explain : -

 

                   (i) Are you being paid Full Salary wef 22Oct 

                   (ii) Is there any such provision  in Bond which deals with this intervening perid from 22Oct to 16Nov

                 (iii) If they are not paying what is the term which defines this in between period

                   (iv) Is there any clause in the Bond which indicates some penalty of not joining the Org on 16Nov physically  or actually.

                   (v) The date of completion of the Bond is 22 Oct 2014 or 15 Nov 2014

                   (vi) Have they also written in Bond the time period of Three yrs and days or just three yrs starting from _ to _______ .

                            Is there any discrepency

                   (vi) What is the penalty clause stipulating the penalty to be imposed if you do not honour the BOND Fully

                   (viii) Are you being treated as an appointee from 22Oct  or from 16Nov

                           Have they given reasons for such gap being a REQUEST FROM YOU WHICH THEY ARE MEETING

 

                       Pl look at them very carefully  and You will get the solution yourself , or talk to them

                      Or state them here and we will see what is best for you

                      0-9929596546

Kumar Doab (FIN)     29 October 2011

It is believed that your offer letter is valid up to 16Nov 2011. If you do not join within this date offer letter shall become dyfunct. Kindly revert on (iv) mentioned by learned Mr.Godbole.

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


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