Employment Service Agreement
7 months ago
Hi I have received a mail from my previous employer asking me to pay ₹2.5 lacs as Bond money as I did not serve 2.3 years of my service agreement. Recently I received a notice of 30 days from the company asking me to settle with the company amicably otherwise they initiate legal action against me. I should clarify that I did not resign from the company but was given automation resignation as I refused to work from a specific work location. Kindly advice me what to do next
A.Dear client,
You can write a letter to your employer to clarify about the confusion. You have to respond to that legal notice, or else he can initiate a legal action against you.
You can write a letter to your employer to clarify about the confusion. You have to respond to that legal notice, or else he can initiate a legal action against you.
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A.Dear Client,
Both the mail you received from your previous employer asking bond money differs from each other, whereas the first mail is a little bit harsh, the next mail is soft and lenient in nature proposing you settle the matter amicably. When you tender your resignation under a condition of automation resignation which refers to the application of technology, programs, robotics or processes to achieve outcomes with minimal human input and you were relieved or discharged by the Company from the service before the completion of the Bond period being aware of a breach of the condition of service Bond, Company is now estopped from claiming any compensation for breach of the condition of service bond applying the doctrine of estoppel as defined u/s.115 of the Evidence Act, 1872. A service bond itself does not create any relationship between an employer and an employee unless and until it is followed by the essential steps required to make the Bond valid and enforceable under the law. Service Bond, cannot make an employee liable to face any legal consequences for deficiency on the part of the employer. The validity of Employment bonds can be challenged on the basis of Section 27 of the Indian Contract Act,1872 which prohibits any agreement in restraint of trade and profession. The law states that an agreement (employment bond) will be illegal only if it restrains someone from exercising a lawful profession/ trade/ business. As per the mandate of Section 27, any terms and conditions of an agreement that directly or indirectly compels the employee to serve the employer or puts a restriction on them joining the competitor or other employer is not valid. The employee has the right to resign from the employment even if he has agreed to the employment bond to serve the employer for a specific period of time. In the case where the employer is able to prove that the employee is joining the competitor to disclose the trade secret then the court may issue an injunction order restricting the employee from joining the competitor. The following are the requirements of a valid employment bond agreement. 1) The agreement must be signed by the parties with free consent. 2) The conditions stipulated must be reasonable and 3) The conditions imposed on the employee must be proved to be necessary to safeguard the interest of the employer. 4) The employment bond is to be executed on a stamp paper of appropriate value in order to be valid and enforceable. You may serve a legal notice to the Company and get in touch with a Corporate Lawyer experienced in the subject for guidance and steps.
Both the mail you received from your previous employer asking bond money differs from each other, whereas the first mail is a little bit harsh, the next mail is soft and lenient in nature proposing you settle the matter amicably. When you tender your resignation under a condition of automation resignation which refers to the application of technology, programs, robotics or processes to achieve outcomes with minimal human input and you were relieved or discharged by the Company from the service before the completion of the Bond period being aware of a breach of the condition of service Bond, Company is now estopped from claiming any compensation for breach of the condition of service bond applying the doctrine of estoppel as defined u/s.115 of the Evidence Act, 1872. A service bond itself does not create any relationship between an employer and an employee unless and until it is followed by the essential steps required to make the Bond valid and enforceable under the law. Service Bond, cannot make an employee liable to face any legal consequences for deficiency on the part of the employer. The validity of Employment bonds can be challenged on the basis of Section 27 of the Indian Contract Act,1872 which prohibits any agreement in restraint of trade and profession. The law states that an agreement (employment bond) will be illegal only if it restrains someone from exercising a lawful profession/ trade/ business. As per the mandate of Section 27, any terms and conditions of an agreement that directly or indirectly compels the employee to serve the employer or puts a restriction on them joining the competitor or other employer is not valid. The employee has the right to resign from the employment even if he has agreed to the employment bond to serve the employer for a specific period of time. In the case where the employer is able to prove that the employee is joining the competitor to disclose the trade secret then the court may issue an injunction order restricting the employee from joining the competitor. The following are the requirements of a valid employment bond agreement. 1) The agreement must be signed by the parties with free consent. 2) The conditions stipulated must be reasonable and 3) The conditions imposed on the employee must be proved to be necessary to safeguard the interest of the employer. 4) The employment bond is to be executed on a stamp paper of appropriate value in order to be valid and enforceable. You may serve a legal notice to the Company and get in touch with a Corporate Lawyer experienced in the subject for guidance and steps.
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