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verukal (entry level)     02 March 2011

Service Bond Query

Hello,

I was recruited from campus by a MNC and joined in 2010. At the time, during orientation, there was a group of 300-350 new recruits and we were all asked to sign a cartload of documents. Among these was a confidentiality agreement and a one sided service bond with one year period with one lakh being the amount if breached. The offer letter has a clause stating that the offer is contingent upon agreeing to authorize the company to recover a sum of Rs.1,00,000 (Rupees One Lakh Only) as cost incurred towards training during the course of employment, in the event I leave the company before one year. 

The training was roughly 30 days conducted at an external location and resembled an unofficial tuition centre. During this time, we had no access to company property. On completion of training (which I passed with a good percentage), I was not deployed immediately. Instead, I had to keep attending interviews within the company (after training), and I was sent from one location to another in the same city. The company has 5-6 locations in the city. They would tell me I was put into Project A, but then when I went to that location, they'd send me back to the resource allocation people who would make me wait for a week or two before putting me in Project B. This situation continued for 4 months. During this time, I spoke to my immediate manager, my HR, my resource allocation person and many others in order to improve my situation. Nothing happened.

Finally, I got an admit to higher studies. At this time, they put me in Project N and I said that I would rather go for higher studies since I had been going through this torture for 4 months. They said fine, got my resignation accepted, and sent me out. 

One month after resignation, I was asked to pay 20000 to clear my settlements. I paid it. A week after that, I received my full and final settlement acknowledgement letter and my experience/relieving letter. 

Then one month after that, I get another mail saying that I have to pay the initial training bond amount of Rs.100000.  I tried to tell them that I have settled my accounts. They just keep telling me I have to pay within one week. 

I am no longer employed. I am doing my studies. If I have to pay this, it will be coming out of my parents' pockets.  

 

What are the legal ramifications of my situation should it go to court?

I would sincerely appreciate your views and suggestions on this.



Learning

 12 Replies

verukal (entry level)     02 March 2011

 I was in the company for five months + a few days. 

PJANARDHANA REDDY (ADVOCATE & DIRECTOR)     02 March 2011

ONCE YOU GET RELEAVED FROM SERVICE WITH F&F, NO LOCUS STAND TO SUE YOU IN ANY COURT ON YOUR SERVICES. FORGET ALL ENJOY  IN NEW SERVICES.

verukal (entry level)     02 March 2011

Thank you, Sir!

I had been worried a lot because they have been sending couriers to my parents' residential address saying I have to pay the amount. 

I'll stop worrying about it then!

Thank you, again!

subhashmahavadi (cashier)     01 May 2011

Verukel.

This type of bonds are performance guarantees only to add psychological wieght on your staying with the company.they arenot legally valid documents uless and until they are registered as such by the company.with any giovernment aurthority.or labour commissioner.

now you have been relieved as well so nothing to worry about it.

 

Subhash Mahavadi

1 Like

verukal (entry level)     01 May 2011

Dear Mr. Mahavadi, thank you for reaffirming Mr. Reddy's opinion and giving me encouragement on the matter. The company is now harassing my parents by telephone asking them to inform me to pay up as soon as possible since I have asked my parents to no longer accept the company couriers. I am also not responding to their e-mails. I tried reasoning with them regarding the situation they had put me in but I don't think they are even considering dropping the matter. I am worried. 

I have three questions: 

- Does using a stamp-paper to obtain your sign mean that it is a valid  legal document?

- Can a company register your service agreement with the govt without telling you about it? 

 - Is there a way to find out if the company has registered this service agreement with a govt. authority or the labour commission? 

These people should really stop asking just-out-of-college students to blindly sign a service agreement without even bothering to explain what the legal terms are. Or the colleges should make a basic course on labour laws compulsory in all streams. It would really come in use. For me, my parents aren't educated in the basics of law.  The people who signed the bond with me that orientation day (there were 350 of them) -all of them were just-out-of-college students and were in the same boat as me. We were asked to sign many documents, nearly 15-20, and we just signed. When I tried asking one of the coordinators if they could give a short explanation about each document , she refused saying she had no time. A basic course on labour laws would really be helpful. 

Is there a site online somewhere anyone could link me to so that I won't repeat this mistake again? I'd really appreciate if you could give me pointers regarding what to read so that I can be more careful next time. 

Sincerely,

Verukal. 

Originally posted by :subhashmahavadi
"
Verukel.

This type of bonds are performance guarantees only to add psychological wieght on your staying with the company.they arenot legally valid documents uless and until they are registered as such by the company.with any giovernment aurthority.or labour commissioner.

now you have been relieved as well so nothing to worry about it.

 

Subhash Mahavadi
"

Kumar Doab (FIN)     02 May 2011

The learned members/experts have given their valuable opinion.

You were asked to pay and you complied and paid Rs.20000/-as so stated settlement expense and thereafter have been issued F&F, relieving letter. Matter is over. If the company has anything to prove you shall hear

One of the combat strategy is “We will cross the bridge when it comes".

If you are still perturbed you may show all documents to your service lawyer/law firm and your lawyer shall draft the letter/notice/legal notice as deemed fit, to be supplied to the company.

Each and everyone in the company was hand in glove and in connivance with each other they executed their game plan and laid trap to fresh and gullible young pass outs. They have offended in their personal and professional capacities. If the situation arises you and all others may summon them in their personal and professional capacities. Courts are not dumb, they understand that if 100 pass outs tell they were not allowed to examine or even brief explanation of the documents was refused, it has to be true.

You may maintain the record with dates who (name, designation and address) aid what to you and at which place (address).

For the days you have not worked and remained idle, you must have not marked your attendance. Were you paid any salary even for these days. How can they keep you without work and more importantly without salary even if they have not allocated any work to you. Hope you were not asked to sign a leave application for such days and you have not signed.

You should send at least an email to the resource person (employee of the company) or reporting authority and enter company's official email id (as n their website e.g. info@abcd.com) stating that you were asked by Mr……..on dated....to meet Mr…..at address.....at time....and you met and you were told that i should remain at home and wait for further instructions and should attend office till instructed by company.

And that on dated…….time ………Mr. .called on from phone…………. number…..at your phone number……and asked you to meet Mr......at address.........and you met and you  were asked to report to .Mr.....on dated……at time ....at address........and you were asked to work on project............at address........from dated.........

How they calculated so stated settlement expenses and did they supply any itemized detail on company letterhead.

College authorities to improve their rating do not arrange or counsel students on the documents demanded by the companies to be signed by them, although they being guardians are expected to ask the companies what are their formalities in campus placements, although they have their own legal dept, lawyers, law firms.

If all of you can unite you can seek legal counsel for filing class suite.

You may note that you ought to be vigilant and should be careful before you sign on the dotted line. It is understood that you need to work. But be smart. Don’t be in haste.

DON’T LOWE YOUR GUARD.

Make it a habit consult your family, experienced and competent well wishers, and seek legal advice.

It is always better and economical to retain a competent lawyer/law firm to advice you, than to repent later.

1 Like

verukal (entry level)     01 July 2011

Thank you, Mr. Doab! I'll be very vigilant the next time onwards. I've been telling my juniors and 2011 passouts to be more careful while being asked to sign a bunch of documents. But they don't allow parents into these places/halls where they do this mass-signing business. There's nobody to ask.

No, I hadn't been asked to sign a leave application for the six months they kept me without work. I'd to mark my labour hours every week. Some seniors said this is so that the company can charge its customers saying so-and-so person worked these many hours this week. I don't know. 

In my case, yet another chapter of the drama opened up now: 

<i>This is the xth communication to you with respect to amounts owed by you
to XYZ.  The first communication was
sent on dd-mm-yy. 

PLEASE NOTE THAT THIS AMOUNT OF Rs I lakh /- IS DUE AND PAYABLE
IMMEDIATELY.  IF WE DO NOT RECEIVE THIS AMOUNT WITHIN 2 DAYS FROM THE DATE
OF THIS NOTICE WE WILL TAKE SUITABLE ACTION AS APPROPRIATE

Such action may include, but are not limited to, initiating suitable legal
action against you, mentioning this in any background check requests that
may come to us, and mentioning that you have not completed all your
obligations towards the Company. In addition, we will also consider action such as
making an entry to this effect in your NSR profile, as applicable.

</i>

Should I do something? 

  1.  I'd given reasons for resignation - did not abscond.
  2. I'd served the notice period they asked.
  3. I'd already paid a settlement amt
  4. I've received payment ack letter, relieval & work ex letters

My main concerns are: 

1. What's this legal action they are talking about? 

2. Can the company do a blacklisting on NSR? Can I complain to NSR if they do something like that? Will it solve my problem? 

Any input from the legal experts here would be greatly appreciated, please. 

Kumar Doab (FIN)     01 July 2011

-Learned Mr. Reddy has already advised that:

ONCE YOU GET RELEAVED FROM SERVICE WITH F&F, NO LOCUS STAND TO SUE YOU IN ANY COURT ON YOUR SERVICES. FORGET ALL ENJOY  IN NEW SERVICES.

-You have paid Rs.20000/ to clear your settlements. Under which head this amount of Rs.20000/ was demanded from you in writing. If it was demanded verbally is it shown in your F&F? You are within your rights to demand the total expenses in occurred by company, if any, on all employees present in the training. Sum total divided by number of employees is expense on you. Company has to file the bills in their expense statement when they file their returns. Believe it company shall run away to provide the relevant documents in labor/civil/criminal court etc..

Moreover you have already paid Rs.20000/, which also seems to be illegal, and collected forcibly.

-Although you were not on any assignment at home or in office, still you were asked to clock labor hours every week, so that the customers can be charged. Company shall run away from supplying this detail also in any court of law.

-Kindly clarify again you received F&F, experience certificate, and relieving letter also or F&F, experience certificate only.

- Do you have copies of cartload of docs signed by you? If not you are within your right to demand certified copies from company.

Since company is threatening your parents you can lodge complaint with local police and involve area councilor and persons of repute. Maintain the record of calls e.g. phone numbers and name of persons calling your parents.

-         No notice with a period of 2 days is reasonable.

-         - What is this NSR. Company has stated in writing “mentioning this in any background check requests that
may come to us.
“ This is a threat to lower the prestige, and make an innocent citizen unemployable.

-         You can try and take the help of any consultant/ small company known to you/family and let the company pass any comments on you in writing by email from official email id of company, by letter and then sue them. If it verbal, you should be able to produce witness if required.

In nutshell enough is enough. Either let the notice come to you or be proactive and show all your docs to elders in the family, experienced and competent people known to the family, labor consultant/lawyer/law firm, and file a complaint with labor authorities.

It is simple process and you can attend on your own or thru a representative.

This should solve your problem.

You can demand Rs.20000/- paid by you + interest. You can demand a written apology for coercion and threats in writing, and a written retraction that they shall not pass any adverse comments against you verbally and in writing.

VIJAYKUMAR (CONSULTANT)     18 August 2011

Can you please tell me what if F&F has not been done / given but relieving letter has been given at the time of leaving the company ? Will the employee be still liable to pay the amount demanded by the employer subsequently ?

 

Warm Reagrds
 

PJANARDHANA REDDY (ADVOCATE & DIRECTOR)     18 August 2011

ONCE YOU GoT RELEAVED FROM SERVICE WITH/withouT F&F, NO LOCUS STAND TO SUE YOU IN ANY COURT ON YOUR SERVICES. FORGET ALL ENJOY  IN NEW SERVICES.

VIJAYKUMAR (CONSULTANT)     18 August 2011

Sorry to bother you again. Suppose they give a provisional relieving letter and mention in there that any dues form whpever employer or employee need to be settled. Will they still not have the Locus Standi to sue in court ?

 

Regards

 

Vijaykumar

PJANARDHANA REDDY (ADVOCATE & DIRECTOR)     18 August 2011

ONCE U GOT RELEAVED UNDER WITHOUT ANY FUTURE LIABILITIES ONLY, I.E UNDERSTOOD BY RELEAVING FROM SERVICE.


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