Need to resign without serving notice period and paying bond amount
4 weeks ago
I joined a consulting firm on 22 Feb 2024. Initially, I was on a 3 weeks probation, after which I was registered as a permanent employee of that firm. It's been only 3 weeks of probation + 2 weeks as an employee, Now I have a better offer than my existing salary and want to resign but don't want to serve / buyout the notice period and also don't want to pay the charges for breaching the employment agreement. What can I do? I don't want the relieving letter as I won't be showing this experience.
A.Dear Client,
A service/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 based on 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 of the Indian Contract Act,1872, 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. In the case where the employer can 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 Act makes provision for un-liquidated damages (not stipulated in a contract), Section 74 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 employer. So, in the prevailing situation, if the Company takes any legal action against you and you are not holding the position of Manager/Supervisor but a workman as defined u/s.2(s) of the Industrial Dispute Act then after serving a legal notice to the Company, reach out to the office of the Labour Commissioner concerned for filing a complaint against the employer over alleged unfair labour practice to resolve the grievance. Otherwise, you need to file a civil suit against the Company in Civil Court seeking appropriate relief in the matter.
A service/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 based on 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 of the Indian Contract Act,1872, 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. In the case where the employer can 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 Act makes provision for un-liquidated damages (not stipulated in a contract), Section 74 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 employer. So, in the prevailing situation, if the Company takes any legal action against you and you are not holding the position of Manager/Supervisor but a workman as defined u/s.2(s) of the Industrial Dispute Act then after serving a legal notice to the Company, reach out to the office of the Labour Commissioner concerned for filing a complaint against the employer over alleged unfair labour practice to resolve the grievance. Otherwise, you need to file a civil suit against the Company in Civil Court seeking appropriate relief in the matter.
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