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Companies generally aske it's new recruits to enter into a bond say for one year or two.
What is the final supreme court position on such bonds and what happens if employee breaks the bond in between and joins another company?
pls guide

From India, Pune
Mr.Anand
A bond is a contarct enforceble in law for any breach there of by the party who promises to fulfil the conditions stipulated therein and prescribes summary damages for such breach.Thus if an emloyee breaks the bond and joins another company, the employer will seek to enforece the bond and claim summary damages stipulated in the bond.
B.Saikumar
HR & Labour Law Advisor
Mumbai

From India, Mumbai
Dear Sir, i have just got one article on this. i am attaching it here. After it’s perusal it seems that bonds are actually not legal.
From India, Pune

Attached Files
File Type: pdf Bonds in employment-negative covenant in contract of employment.pdf (108.5 KB, 775 views)

Dear Anand As of now No company has taken the bonds from employee . Each and every terms&condition they are mentioned in Offer letter.
From India, Hyderabad
Dear Anand
It is too sweeping to say that a bond is illegal, when the Contract Act 1872 itself accords legal force to bonds. A bond is enforceable so far as it does not travel beyond the boundaries stipulated by sec.27 of the Indian Contract Act.That is the essence of the article.
B.Saikumar
HR & Labour Law Advisor
Mumbai

From India, Mumbai
Dear Mr.Anand,
Service bond will not be constitutionally valid which has been repeatedly clarified by the Suprement Court and the High Courts. Freedom of changing employment for improving service conditions is a vital and important right of an employee which cannot be restricted or curtailed.
Regards,
J.Basak
HR Professional

From India, Calcutta
At that time all company surely ready for bond because employee are more than three or six month after that change job so company start this type of rules and regulation for employee and i think this is best for company.
From India, Ahmadabad
Mr. Anand Some big & small company are still use bond system for new employee. its not eliminated.
From India, Chennai
Dear All,

When Human Trust and Trustworthiness are put to test, then the Employee Bonds become the order of the day. HR Professionals should be aware on how to use this Bond as a tool effectively.

A Bond is effective before the employee resigns from the Organization/company. Any contract with futuristic clause, other than disclosure of Trade secrets, would NOT be admissible by Indian Courts.

The onus of Burden of proof, is again left on the initiator of proceedings, (the employer).

To understand its technicality, read the following:

The negative covenants operative during the term of the contract are not hit by section 27 of the Indian Contract Act because they are designed to fulfill the contract and not to restrict them.

On the other hand, when a restriction applies after the contract is terminated, the restriction on freedom of trade, business or profession takes the form of

restraint of trade, business or profession.

This distinction which is of a fundamental nature has to be borne in mind; otherwise the perspective will be lost.

With Warm Regards,

V.Govindarajan.

Manager-Continuous Improvement.

Raysoft Technologies.


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