Preeti1986
Software Engineer
Omkarnik
Working
+2 Others

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Is service bond legal in India?

Being an active lawyer for the past 22 years, I can tell you that no company can hold an employee to work against their will in this country. Having that said, if a company bears some expenses for your training/visa, etc, you are required to pay the amount to break even incase you depart before your time period.

You have the right to obtain an itemized list of expenses incurred during your training period. This is usually always lesser than the bond amount. If the company denies you list and your relieving letter--You can take them to court.

We recently worked on a case involving an employee having a 2 lakh 2 year bond with L&T. L&T refused to give a relieving letter to the employee after 1 year of service. After the employee asked for the expenses incurred, L&T instead gave the relieving letter without any fuss.

I would request all employees who would like to break their bonds to not pay the bond amount but ask for the exact expenses incurred by the company and pay that amount to get the relieving letter.

Regards

Dr. TSG

Hello Dr.TSG,
I am from Kerala. I am in a similar situation. I was a part of L&T till November 2011.I would say it is rather the same problem. I breached the service bond since I was denied certain benefits and I received rather a harsh treatment from the authorities. L&T sent me a legal notice which mentions about 2 lk bond money with 18% interest to be paid.
The point which you explained "list of expenses" is vague to me. What if the company produce a fake list of expenses? can you elaborate on that? Also please expatiate on the type of expenses which bond money can contain? For instance,Expense can be due to travel,accommodation etc.Will those be included in the bond amount.
Looking forward to hear from you.
Thanks and regards
Amenon.

Hello Anand,
How many months did you serve with the company?
Companies like L&T will not provide anything fake. They will have to give you a break-down of all the expenses incurred like external software training, travel expenses, accommodation, etc. In any which case it is highly unlikely that this would be 2lakh. If you have served a considerable amount of time(1year+), you can get significant reduction in the bond amount. You may only need to pay what others pay when they leave after their notice period(2 month salary or less).
Please do not leave the company until you have sorted all of this. Do not abscond as then it is when they can send a notice. If you stay with the company until all is negotiated they cannot send you any legal notice.
Regards

Dr.TSG,
I am already out of the company.To be frank I am absconding since last November.I served in the company for 16 months(June 2010-November 2011).I had training for initial 8 months.We dealt with nothing.We had a couple of trips the total expense of which would never be more than 50 thousand. Moreover,I havent got LTA which sums upto 23000 Rs(which is a part of the salary). I was supposed to fetch this when I completed one year term.I was denied that too.I got the legal notice already.I am all set for giving a reply to them.Will it be advisable if I claim for the list of expenses and relieving paper?
Kindly clarify.
Thanks and regards
Amenon.

Dr. TSG,
I am facing a similar situation. I joined L&T Infotech 4 months back as a fresher and signed a similar bond of Rs 2 lacks for 2 years. I want to leave the company now. What is the best way forward? Please suggest?
Regarding the expenses occurred, did you sent them a legal notice asking them to list out the expenses occurred, or was it over email?
Regards

Dr. TSG
i joined a company with 2 years and 2 lakhs bond, i was there in company for 33 days.. i was v.good performer among the entries.. They created a mental stress, where i coludnt perform or i was not in happy working with them in future.... so i left the company on the 34th day.. still 43 days of training to be complete.. after 10 days they sent me my resignation... after 6 months now they are asking me for the 2 laks bond amount.... so what are thee consqequences...??

Hello Dr.TSG,
I am in a similar situation as your client, and with the same company. Could you please tell me what exactly has to be asked for?
and if it has to be sent in the form of a legal notice or just a mail to the hr?
In desperate need of your help.

Yes sir, please guide I have joined a week ago and got a new offer so want to leave l&t ecc.please guide about the service bond thing
Hello Sir
I am working with L&T Infotech.Its been 1 yr and 2 months.I have bond period of two years if i leave before that i have to pay 2 lakhs.I want to leave the company.What can be done so that i don't have to pay 2 lakhs.I am ready to pay 2 months salary.Please help on this.

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