regarding the bond with the employer
2 years ago
Hi i had written a bond for 4 years for the amount of 4lakh rupees, and i have completed 3 years and looking to change my job.
what may be the consequences here.
Do i need to pay the complete 4 lakhs or 1lakh while parting.
or can i also say i cant pay the amount as they are shifting me to new category which is i am not interested.
Ankur Goel @ Complete Law Shield
Responded 2 years ago
A.4 lakhs
Helpful
Helpful
Share
Sidhaarth
Responded 2 years ago
A.Under the bond you shall be liable to pay Rs four lakh as stated in bond. Bond is legal and enforceable against you.
Helpful
Helpful
Share
Ayantika Mondal @ Prime Legal
Responded 2 years ago
A.Hi,
The sum is determined by the agreement's terms. After reviewing the agreement we can establish whether or not you are required to pay.
If you find this answer helpful please rate my answer. Thank you.
The sum is determined by the agreement's terms. After reviewing the agreement we can establish whether or not you are required to pay.
If you find this answer helpful please rate my answer. Thank you.
Helpful
Helpful
Share
A.Hi,
The amount depends on the terms and wording of the agreement. Also only after going through the agreement can we determine whether you need to pay or not.
If you find this answer helpful please rate my answer. Thank you.
The amount depends on the terms and wording of the agreement. Also only after going through the agreement can we determine whether you need to pay or not.
If you find this answer helpful please rate my answer. Thank you.
Helpful
Helpful
Share
A.Dear Sir,
If they have not spent on your training then you need not pay anything.
======================================
While granting liquidated damages under the employment bond, Courts apart from going into the legal injury caused to the employer also take into consideration factors like actual loss suffered by the employer, period of service already completed by the employee under the contract and other conditions, if any, stipulated under the contract. Only after going into these factors, courts determine the loss suffered by the employer to reach a reasonable compensation figure. For instance, in the case of Sicpa India Limited vs Shri Manas Pratim Deb (MANU/DE/6554/2011), the employer incurred expenses, while imparting training to the employee for which an employment bond was executed. According to the bond, the employee was to serve the employer for period of three years or to make payment of rupees two lakhs to the employer. The employee left the employment within two year of signing the bond. To enforce the agreement the employer went to the court, which awarded sum of only Rs 22,532 to the employer as against the compensation amount of Rupess two lakhs stipulated in the contract. While coming to such conclusion, the Court relied upon the law laid down by Supreme Court regarding liquidated damages. The law with respect to liquidated damages have been crystallized by the Supreme Court vide two landmark decisions. First is the decision in case of Sir Chunilal V. Mehta And Sons, Ltd vs The Century Spinning (1962 AIR 1314), wherein it was held that liquidated damages are not in the nature of penalty and can be awarded as mentioned in the contract if loss from the breach of contract cannot be calculated for the remaining period of the contract. Whereas, in the case of Fateh Chand vs. Balkishan Das (AIR 1963 SC 1405), the provision of liquidated damages in the nature of penalty was held to be void, since the actual damages could be calculated and, thus the liquidated damages were held as the upper limit which are to be paid once the actual damages are proved. Since in the present case the damages could be calculated, Court considered the total expenses borne by the employer and the period of service completed by the employee under the contract and thus, divided the total expenses incurred into three parts for three years and awarded the damages for the remaining one year of the employment due to the breach of contract.
Therefore, from the above discussion, it is evident that employment bond stipulating a specified sum as payable by the employee in case of breach of contract is enforceable only if employer has actually spent money on the employee against a promise from the employee that he or she would not leave the employment for the specified duration and has consequently suffered a loss on account of the employee having received the training and leaving the employment before the stipulated period in breach of the employment bond / contract. With the employees in our country free to decide their employment these bonds play an important role to protect the interest of the employer and enable the employer, in appropriate circumstances, to recover the money spent or incurred by the employer in case of an early resignation by the employee.
If they have not spent on your training then you need not pay anything.
======================================
While granting liquidated damages under the employment bond, Courts apart from going into the legal injury caused to the employer also take into consideration factors like actual loss suffered by the employer, period of service already completed by the employee under the contract and other conditions, if any, stipulated under the contract. Only after going into these factors, courts determine the loss suffered by the employer to reach a reasonable compensation figure. For instance, in the case of Sicpa India Limited vs Shri Manas Pratim Deb (MANU/DE/6554/2011), the employer incurred expenses, while imparting training to the employee for which an employment bond was executed. According to the bond, the employee was to serve the employer for period of three years or to make payment of rupees two lakhs to the employer. The employee left the employment within two year of signing the bond. To enforce the agreement the employer went to the court, which awarded sum of only Rs 22,532 to the employer as against the compensation amount of Rupess two lakhs stipulated in the contract. While coming to such conclusion, the Court relied upon the law laid down by Supreme Court regarding liquidated damages. The law with respect to liquidated damages have been crystallized by the Supreme Court vide two landmark decisions. First is the decision in case of Sir Chunilal V. Mehta And Sons, Ltd vs The Century Spinning (1962 AIR 1314), wherein it was held that liquidated damages are not in the nature of penalty and can be awarded as mentioned in the contract if loss from the breach of contract cannot be calculated for the remaining period of the contract. Whereas, in the case of Fateh Chand vs. Balkishan Das (AIR 1963 SC 1405), the provision of liquidated damages in the nature of penalty was held to be void, since the actual damages could be calculated and, thus the liquidated damages were held as the upper limit which are to be paid once the actual damages are proved. Since in the present case the damages could be calculated, Court considered the total expenses borne by the employer and the period of service completed by the employee under the contract and thus, divided the total expenses incurred into three parts for three years and awarded the damages for the remaining one year of the employment due to the breach of contract.
Therefore, from the above discussion, it is evident that employment bond stipulating a specified sum as payable by the employee in case of breach of contract is enforceable only if employer has actually spent money on the employee against a promise from the employee that he or she would not leave the employment for the specified duration and has consequently suffered a loss on account of the employee having received the training and leaving the employment before the stipulated period in breach of the employment bond / contract. With the employees in our country free to decide their employment these bonds play an important role to protect the interest of the employer and enable the employer, in appropriate circumstances, to recover the money spent or incurred by the employer in case of an early resignation by the employee.
Helpful
Helpful
Share
A.You have to read the whole bond agreement to understand the nitty gritty whether it is differential in nature or you have to pay the whole amount whenever you leave. You should speak to your manager and find out the full details or you can share a copy with a lawyer and the lawyer can tell you exactly what to do.
Helpful
Helpful
Share
Read Related Answers
Can a company deny experience-relieving letter for violating NDA
Dear Client,
For a breach of the terms of an employment contract, an employer can take legal action against the employee claiming damages arising out of the breach of said contract. But the action of...
Illegal Termination
Dear Client,
From the contents of your query, the management's action, prima facie, appears to be highly arbitrary and illegal and can be termed as victimization and unfair labour practice. When the c...
Employee accident
Dear Client,
Section 3 of the Employees Compensation Act, 1923 deals with the Employer's liability for compensation payable to an injured employee in case the injury is caused in the course of and ari...
Job fraud
Dear Client,
It appears from the query, that you are trapped by a fraudster company by alluring with fake employment that costs you a sum of Rs.2 lakhs. When you are in receipt of an offer letter issu...
Applicability of Factories Act and Shops & Establishments Act for NGOs in Karnataka
Dear Client,
Non-profit organizations/NGOs, even though they may not engage in commercial activities, may still fall within the purview of the Shops and Establishment Act if they provide services or...
Read Blogs on Employment and Labour
Employment and Labour Lawyers
Find Lawyers by Location
