Applicability of Serivce or Labor Bond for Foriegn Posting in a PSU
2 years ago
Hi, I have been posted to a foreign branch for 3 years after working for 7 years in a PSU after the selcetion and interview process. While sending to the foreign location I was to sign an Foreign Service Bond drafted by employer which was non-negotiable for discussion. I have signed the Bond and also agreed for other penalties if I resign from Foreign branch (Like relocation allowance, one time allowance and travel expenses). Also, the bond amount had GST applicable on it.
After my posting here, the company decided to put the branch under run-off in first 6 months and asked us to wrap up the branch operation asap. This triggered me to find a job in the local market here.
In the above scenario, if I now resign from Foreign Location, can you please answer follwoing:
1. What is the legal sancticity of Bond here, as the posting is merit based and does not involved any training cost asscoiated with it?
2. Since, I was posted for 3 years, I had signed the Bond but since now that the Branch is under runoff, isn't the contract is now frustrated?
3. Is GST even applicable on such Bonds which a compensatory allowance?
4. Are the incidental costs of sending me here such as relocation allowance, one-time allowance are recoverable?
1. The bond is legally valid regardless of the process involved as you and the employer both executed it the intention of having it in place
2. The branch might be under runoff but you are supposed to get back to the Indian location after your stint.
3. No GST should not be applicable to such bond as that is not a service. At max stamp duty will be applicable as it could be executed on stamp paper.
4. They can be recoverable as per the policy of the employer or the bond that was executed.
The answers to the abovestated questions can be given only after referring to the agreement that was signed between you and the company. Please consult a lawyer and proceed accordingly.
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