90,000+ Legal Questions Answered
Employment bond
6 months ago
I joined a organization with 2 years of bond, if i fail to serve 2 years i was suppose to pay 2 months gross and 2 months notice period. in 2nd year i was given with increment and market correction so the notice period was changed to 3months with other terms and condition remains same. I have successfully completed 2 years and came out of bond again they promoted me and in the promotion letter it was written as if i fail to stay in organization less then 1 year, I am liable to pay 2 months of gross pay and 2 month compulsory notice period. I have not been given any training after promotion or company has not spent on me for my grooming. And all the terms and condition of employment bond was written on company letter heard and I have signed. and presently i have put my paper and serving notice period of 2 months, so my question is still am i suppose to pay 2 months gross pay? which is 1,30,000 Rs.
Please help me out with any similar case to prove my organization guilty
A.Dear Client,
You mentioned that you signed an employment bond with specific terms. You should carefully review the bond agreement to understand your obligations and the conditions for repayment. If your notice period and terms have been modified in the promotion letter, those changes should be valid only if you willingly accepted them. It's crucial to review the promotion letter and understand the terms you agreed to. Generally, courts tend to uphold reasonable bond agreements. Ultimately, whether you are required to pay the 2 months' gross pay will depend on the language in your bond agreement, the changes made during your promotion, and the specific circumstances of your employment.
You mentioned that you signed an employment bond with specific terms. You should carefully review the bond agreement to understand your obligations and the conditions for repayment. If your notice period and terms have been modified in the promotion letter, those changes should be valid only if you willingly accepted them. It's crucial to review the promotion letter and understand the terms you agreed to. Generally, courts tend to uphold reasonable bond agreements. Ultimately, whether you are required to pay the 2 months' gross pay will depend on the language in your bond agreement, the changes made during your promotion, and the specific circumstances of your employment.
Helpful
Helpful
Share
A.Dear Client,
An employment bond is a contract and is subject to the provisions of the Indian Contract Act 1872. Article 19(1)(g) of the Constitution of India guarantees that all citizens have the right to freely practice their profession and trade, subject to reasonable restrictions. 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. As per the mandate of Section 27, any terms and conditions of an agreement/bond 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. Hence, even if you want to leave before the stipulated bond period, you are not legally required to pay any amount to your employer being the bond itself is not enforceable under the law. Further, Section 73 of the Contract Act makes provision for unliquidated damages (not stipulated in a contract) and Section 74 of the Contract Act deals with liquidated damages (stipulated in a contract), and no compensation is attracted for mere breach of contract u/s.73 and 74 of the Act unless such breach resulted in an actual loss or damage to the opposite party. In the context, the case of Superintendence Company v/s Krishna Murugai( 1980 Air 1717) of Delhi High Court and the case of Percept D' Mark v/s Zaheer Khan ( Appeal (Civil) 5573-5574 Of 2004) may be referred to. Normally an employment bond is executed at the time of joining employment that involves certain expenses incurred for training, and grooming of an employee, but the same terms of a bond cannot be reinforced at the time of promotion of an employee that he deserves by virtue of his skill, performance and dedicated service for the growth of the Company. When you tendered your resignation and now serving the notice period in terms of your employment, and on expiry of the notice period, if the company demands any compensation in terms of employment bond, then if you are not holding a position of manager or supervisor in the Company, but a workman as defined under Sec.2(s) of the Industrial Dispute Act, 1947. serving a legal notice to the Company reach out to the office of the concerned Labour Commissioner to file a complaint against the company over alleged unfair labour practice for redressal of your grievance, But, if you are holding the position of manager or supervisor in the Company, you have to file a civil suit against the Company before the Civil Court taking the recourse of the relevant law as explained hereinabove for desired relief in the matter.
An employment bond is a contract and is subject to the provisions of the Indian Contract Act 1872. Article 19(1)(g) of the Constitution of India guarantees that all citizens have the right to freely practice their profession and trade, subject to reasonable restrictions. 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. As per the mandate of Section 27, any terms and conditions of an agreement/bond 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. Hence, even if you want to leave before the stipulated bond period, you are not legally required to pay any amount to your employer being the bond itself is not enforceable under the law. Further, Section 73 of the Contract Act makes provision for unliquidated damages (not stipulated in a contract) and Section 74 of the Contract Act deals with liquidated damages (stipulated in a contract), and no compensation is attracted for mere breach of contract u/s.73 and 74 of the Act unless such breach resulted in an actual loss or damage to the opposite party. In the context, the case of Superintendence Company v/s Krishna Murugai( 1980 Air 1717) of Delhi High Court and the case of Percept D' Mark v/s Zaheer Khan ( Appeal (Civil) 5573-5574 Of 2004) may be referred to. Normally an employment bond is executed at the time of joining employment that involves certain expenses incurred for training, and grooming of an employee, but the same terms of a bond cannot be reinforced at the time of promotion of an employee that he deserves by virtue of his skill, performance and dedicated service for the growth of the Company. When you tendered your resignation and now serving the notice period in terms of your employment, and on expiry of the notice period, if the company demands any compensation in terms of employment bond, then if you are not holding a position of manager or supervisor in the Company, but a workman as defined under Sec.2(s) of the Industrial Dispute Act, 1947. serving a legal notice to the Company reach out to the office of the concerned Labour Commissioner to file a complaint against the company over alleged unfair labour practice for redressal of your grievance, But, if you are holding the position of manager or supervisor in the Company, you have to file a civil suit against the Company before the Civil Court taking the recourse of the relevant law as explained hereinabove for desired relief in the matter.
Helpful
Helpful
Share
Read Related Answers
Variable Pay Components - How to add Variable pay in offer letter and salary slips
Dear Client,
Variable pay or compensation is determined based on two main factors – the employee's performance and the company's overall performance. An employee becomes eligible to get variable pay...
layoff as BU is closing
Dear Client,
Apart from compliance with the statutory formalities required under the Companies Act, 2013 for the closer of the business of a company or part of it, the Company has to comply with the s...
Termination
Dear Client,
Termination without notice amounts to illegal termination and is defined as an industrial dispute under Section 2A of the Industrial Dispute Act, 1947 which also violated the mandatory p...
FnF amount not received
Dear Sir
Please approach the following authority or similar authority in a state
The Office Commissioner of Labour
Karmika Bhavan, Dairy Circle,
Bannerghatta Road, Bangalore-29.
080-29753078
labou...
No Leave Encashment - Worked for 18 plus years in the organization
Dear Client,
Leave Encashment Rules for private companies vary according to their policies and local regulations. Each company has a unique leave encashment policy. Some may have a cap on the number o...
Read Blogs on Employment and Labour
Employment and Labour Lawyers
Find Lawyers by Location
