Employment bond breakage
5 months ago
I have joined 2 months back in a startup company as a intern, they are not given any offer letter and taken my certificates,i am signed for 4 years bond. Now I am rejected due to some family problems. I am already trained at some Institute. Now I am resigned the company.They given my certificates & They asked to pay 7 lakhs for training investment. Otherwise we will go through legally. Now I am fully tensioned. What I have to do
A.Dear Client,
An employment 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. 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. 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. 74 of the Act unless such breach resulted in an actual loss or damage to the opposite party. So, if you are facing any action or threat from your ex-company, 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 before the Civil Court for desired relief in the matter.
An employment 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. 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. 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. 74 of the Act unless such breach resulted in an actual loss or damage to the opposite party. So, if you are facing any action or threat from your ex-company, 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 before the Civil Court for desired relief in the matter.
Helpful
Helpful
Share
A.Dear Client
If you haven't already, submit a formal resignation letter to the company. Clearly state your reasons for resigning and express your intention to resolve any outstanding issues. Return any training materials or company property as requested. This will demonstrate your willingness to cooperate. Be aware of your legal rights as an employee or intern. Labor laws vary, and understanding your rights can be essential when dealing with employment-related disputes. If you believe the company's demands are unjust or unlawful, you can explore the option of filing a complaint with labor authorities or seeking redress through appropriate channels. A labor lawyer can advise you on the specific steps to take in your jurisdiction.
If you haven't already, submit a formal resignation letter to the company. Clearly state your reasons for resigning and express your intention to resolve any outstanding issues. Return any training materials or company property as requested. This will demonstrate your willingness to cooperate. Be aware of your legal rights as an employee or intern. Labor laws vary, and understanding your rights can be essential when dealing with employment-related disputes. If you believe the company's demands are unjust or unlawful, you can explore the option of filing a complaint with labor authorities or seeking redress through appropriate channels. A labor lawyer can advise you on the specific steps to take in your jurisdiction.
Helpful
Helpful
Share
Read Related Answers
Listed company registered office in residential premises.
Dear Client,
The use of a residential building for commercial purposes is not permissible under the law unless the class or character of the building is converted by the competent authority i.e, Munic...
Boss told me to resign
Dear Client,
An employee who is being forced to tender a resignation that amounted to illegal retrenchment/termination, if you can prove the allegation with substantial evidence. Once you succeed in p...
Commercial flate
Dear Client,
Regardless of the character of the flat, commercial or residential, a common area maintenance(CAM) charge is payable by the owner of the flat to a Society or Association.
Resignation wihout notice period
Dear Client,
A resignation without complying with the terms of employment i.e, service of notice period may liable an employee to face legal consequences for breach of terms of the contract. An employ...
Service Overlap issue
Dear Client,
There is no overarching law that prohibits a person from doing multiple jobs. It is not illegal however both companies should not have the clause “cannot take up work full time in some o...
Read Blogs on Corporate and Incorporation
Corporate and Incorporation Lawyers
Find Lawyers by Location
