Kamalkantps
Advocate
Prasenjit.mitra
Human Resource-professional
Tajsateesh
Recruitment/talent Acquisition, Career Counselling
8125797292
Hr-executive
Lokesh Babu
Hr Generalist, Employee Relation Executive
Avi89
Sales Professional
+14 Others

Thread Started by #Lokesh babu

Dear all,
I had joined in a company as HR Trainee obliged to work for three years by signing an legal agreement(Bond) along with surety who is a government servant, after working for 16 months due to personal problems and for better opportunities i left the company, now the company is asking to pay an amount of Rs.75,000/- stating that bond Violation. They stopped my F&F, PF and relieving.
Key points in the agreement:
1.1st year of service as Trainee, 2nd year probation, 3rd year confirmation.
2. Relationship between company and employer is that of "teacher and student” and not master and servant.
3. Stating that “Company incurred lot of money for training” which is not true and there is no training given as such.
Now company executives are threatening me that they will file case in court if i didn’t pay the money.
I request you all to help me out from this problem by giving your valuable suggestions.
Thanks and regard
Babu

6th August 2012 From India, Hyderabad
Dear Lokesh,
If you have signed a bond at the time of joining, then you have no other way, you have to follow it.
If you are not following it, it's a breach of contract. And the company has thr right to take actions against you.
Generally a company also sign up bond amount, i.e. if you do not want to continue the service under any circumstances you have to pay back the amount. Check your bond paper for such clause.
If the new ooportunity is good, pay back the amount to your current organsiation and carry on.
For any clarification feel free to write or discuss.
6th August 2012 From India, Mumbai
Dear Sir,
Thank you very much for your valuable suggestion.
The bond has been executed at the time of joining itself.
In the name of giving on the job training, i was asked to execute bond for 3 yrs which is not true and i was handed over core job responsibilities right from the beginning.
In such situation how can i pay such huge amount which is twice the amount i received in the form of monthly salary.
Pls suggest.
Thanks & Rgds,
Babu.M
6th August 2012 From India, Hyderabad
Dear Mr. Babu,
If you have a copy of Bond please read thorughly the agreement literature first. If you can prove your self that they have not trained you and given core job responsibility then you can fight with them legally. Consult good legal advisor in this regard and go as per his guidelines. In any case if your bond is for one year and they asked for three years you can win the case. But it will take time and gives a negetive impact on your career. It is better to consult the higher officials in your office and request them to relieve you by telling your case. If they agreed it is more better.
With best regards,
Suneel
6th August 2012 From India, Vijayawada
Dear Lokesh,
Before anything that I could suggest want to know few queries - Firstly, Did you resign yourself properly with your organization?
- Did your employer agree to your resignation?
- Have you served your notice period as per their stipulated time period?
- Your HR Dept. is the ultimate entry and exit, so have you explained your situation for leaving?
Although, as apart from all these, suggested earlier by our able seniors, please go through the contract once again. I agree that paying such a huge amount may be difficult and there is always a fair chance to speak to the concerned than to plunk in despair.
6th August 2012 From India, Visakhapatnam
After taking in to consideration of the whole discussion made above,

I would like to add by asking you,

1) this question may look silly, but yes important, were you major while signing the agreement?

2) Do you have the access to the company policy??

3) Is there any specifications mentioned about the training in the agreement??

4) Have they mentioned the amount of compensation...... or the best is, may you send me the copy of your agreement, and the related documents, like appointment letter, stipend paid slips etc etc, what ever the documents you have and u feel it important to , and lets see what may be done with it.......

And, its kinds difficult to ask the specific question which helps you without the documents...... so you may send it the given email ID if you feel it necessary..........this looks like the issue of apprenticeship, and may find the legal rescue if any, but in any case, agreement is important to be looked in to..... but nothing to worry much about it......
6th August 2012 From India, Bangalore
Hello Lokesh babu,

I am with Prasenjit Mitra.

When you signed the Bond, you ought to follow it BOTH in spirit & deed.

You mention that you left 'due to personal problems and for better opportunities'--which of the two is the TRUE REASON? When you knew that you had a Bond, what made you think of even applying for a new job WITHOUT giving any thought to the Bond--the consequences thereof?

Frankly, I think you took things for granted--that the company wouldn't really bother. Or, that you could get away with it.

You seem to be stressing on 'no training given as such', by saying: 'was handed over core job responsibilities right from the beginning'. Could you pl explain what YOU mean by "core job responsibilities"?

You also mention that you joined as a Trainee, which means that there definitely MUST HAVE BEEN someone mentoring/training/guiding you even in your 'core job responsibilities'. Were you just assigned job responsibilities & targets right from day-1 WITHOUT any support mechanism in-place? I am sure NOT.

Being a HR person yourself, I do hope you know & realize that MANY companies [usually SMEs] would rather prefer to train/guide freshers WHILE-AT-JOB rather than have structured/separate/formal Training sessions--for multiple reasons, some of which are to do with economics. Hope you get the point.

Rgds,

TS
6th August 2012 From India, Hyderabad
Dear all,
In india bond is illegal. It is only one sided. As per law the employer cannot enforce Bond. I various decisions the various high courts and supreme courts has held that the bond system is violation of the fundamental rights under article 19 of the constitution of india. No employer has a right to insist on the employee to serve the company against the wish of the employee. The employee has a right to quit the employment at any time when he wants. Its up to him to decide when and till what day he want to work. The only thing is that due notice should be given to the employer.
6th August 2012 From India, Kochi
Dear Mehrunisa,
Kindly cite some court cases in support from either high court in India, that will be helpful for this gentleman. I am with you that bonded labor of bond is against fundamental rights under article 19 of the constitution of India.
S K Nain
Head HR
09824916886
7th August 2012 From India, Ahmadabad
Dear Lokesh Babu
The Bond you have singed is not enforceable by law because it is not legal and it is against fundamental right. So don't pay the money to the employer. If your employer file any case against you face it legally with the help of any advocate with courage and stamina.
As far as withdrawal of PF contribution is concerned you can dircetly file the withdrawal FORM to the PF office after obtaining your signature from the Bank Manager where your account is being operated.
7th August 2012 From India, Mumbai
Article 19 of the constitution is subjected to the reasonable restrictions!! So the bond for a reasonable specific period is valid and agreed party is bound to comply.......
7th August 2012 From India, Bangalore
Accepted judicial fact, but it is not just about the notice but he shall have to pay the compensation as agreed by both the parties during the contract.....
He may leave when ever he wants leave, but he can not breach the contract... so he shall do whatever mentioned in the agreement under the clause which speaks about leaving the company.....
And again, Art. 19 is subjected to the reasonable restriction, not an absolute right given under the Constitution of India......
7th August 2012 From India, Bangalore
I agree, as said above, must have thought well before taking a decision to quit the job or to continue..... But there are many companies who provide the training in theory, hardcore responsibilities would indicate the good training,........

........ but also may be interpreted that the employer want to completely utilise the candidate without giving to status of the employee, these are also the tricks of many companies who fail to invest on HR, and who utilise the students for such jobs to be done..... keeping this apart,...... how can a company entrust the core responsibilities to a person who is not even an employee of the company ?? is this because you may escape from personal liabilities if something goes wrong and you can put such losses on a trainee?? or you may escape from saying that the trainee was not employee of the company at all????

These kind of cases are plenty in India and such kind of exploitations (these are the manipulation activities)...... there are companies of that sort all over India...........
7th August 2012 From India, Bangalore
Hello BSSV,

I am totally with you in your statements.

But, at the same time, there are always TWO sides to a coin.

W.r.t. your remarks as below....

"But there are many companies who provide the training in theory, hardcore responsibilities would indicate the good training,................ but also may be interpreted that the employer want to completely utilise the candidate without giving to status of the employee, these are also the tricks of many companies who fail to invest on HR......."

I do agree to what you mention...BUT LET'S NOT GENERALIZE.

If we go by the so many Postings in CiteHR of those who want to jump the Bond/Agreement & ask for advice on how to do it WITHOUT facing the consequences, can we assume that ALL FRESHERS ARE THE SAME? Definitely NOT I guess. Just as there are companies who do take people for a ride[actually have seen some companies take advantage of even experienced employees who didn't have a choice], so too would there be individuals who blindly sign such Bonds since IT SUITED THEM AT THAT POINT OF TIME. And when they learn the job, they try to find flaws & justifications for jumping the Bond/Agreement [just use the reSearch facility to see how many postings we can find in CiteHR itself].

This is NOT TO JUSTIFY crook companies [which you indicated]. What I think we need to stress & realize is that the relationship has to be fair to all parties. In a nutshell, it has to be a WIN-WIN relationship--else things are bound to go awry--if not now, then later for sure.

If you can recall, the culture of Bonds wasn't there in such a wide-scale until about 15-20 yrs ago in India. If one can analyze the causes/reasons on why it came into practice as a SOP, it could be a sort of an eyeopener.

Even though Lokesh Babu's thread relates to a situation in a very limited sense, what I was trying to focus on was the much larger picture--that of degradation of Basic values & ethics in-general, & among HR professionals, in particular.

That we can find many technical employees resorting [or trying to resort to] such Bond/Agreement breaking practices is common knowledge. But it becomes very concerning when HR professionals attempt go the same way without any qualms--given that the very function of a HR person is to PRE-EMPT/PREVENT such practice wherever they work.

I recollect a Quote here: " A 'bad word' from the mouth of a commoner is 'blasphemy' from the mouth of a priest".

Hope you get the point.

Going back to what you mentioned about '.....may be interpreted that the employer want to completely utilise the candidate....', I don't think that Lokesh Babu would fall into this category--if we go by what he mentioned about his career progression. He does seem to have learnt in 16 months [when he got a better opportunity], what the company presumed would happen in 36 months [3 yrs Bond period]--which points to the sort of support he got from his seniors/peers in this company, APART from his own efforts.

Rgds,

TS
7th August 2012 From India, Hyderabad
Hello Babu,
I am agree with TajSateesh,you must have taken your job as granted,although being a person we always look for our betterment.But rules and regulations are organised for our betterment only ,what if you have completed three years according to your bond and then you would have left this job with vast experience and seniority.
Well,we can only see the situation what you are saying but may be something is not true at the other side and you are forced to leave that place.
Further,try to analyse your own mistake and learn from it.
Regards,
Anila George.
7th August 2012 From Pakistan, Karachi
I am afraid, my reply to the thread and the query asked by the individual would become Generalized and may be applicable to all, I am glad to know that......

And crooked is the string word against any company which I never use, I request take the as usual meaning of my sentences.......

Thirdly, I am bothered about any company or any other person, because each issue has its own values and differences.....

You might have missed my previous replies, I have clearly mentioned, that unless I would be able to see the agreement/bond, a clear opinion based on facts can never be given.......

I feel this matter is more of a legal point of view than a HR point of you, because, if it is in HR point of you, as you and every one already pointed out, this person has no other choice either to rejoin his company or to pay the compensation....

And, even if you observe my replies, I have just added the missing points but have not commented, because I am not opposing anyone's reply here...

Anyways, I could understand the strong emotion behind your words stated above and I hearty respect them..... Also thank for the message.....

Have a nice day.......
7th August 2012 From India, Bangalore
I am not at all surprised that so many H.R. "professionals" in this list are defending the imposition of a bond on so-called trainees. It is these HR people who use such measures as a substitute for good HR practices which will retain employees. Not only do they impose a bond with a financial penalty but many companies also retain the original certificates of the trainee as a measure of enforcement!

Unfortunately, I am unable to cite actual Court decisions, not being a HR or Legal person. But courts have time and again upheld the fact that merely signing a contract does not make it enforceable if the contract itself is illegal. And the courts have also opined that such bonds can only be imposed if the company can clearly establish that it has specifically incurred expenditure in "training" the individual.

For example, if a company sends a trainee abroad for training with a collaborator, it is clearly incurring expenditure for imparting skill to the trainee, and the trainee is not adding any value to the company during this period. In such a case, the company can ask for a bond to the equivalent of the expenditure they have incurrred, if the person does not serve for a reasonable time after the training. Of course, the definition of "reasonalbe time" also comes into question here. Also, in this particular case, how has the company determined three years as the bond period and how have they arrived at Rs.75,000 as the appropriate compensation? Would the same amount be applicable even if the person left the service of the company, say, after serving two years and 10 months?

My own experience of almost all Indian comanies is that the trainee gets a completely minimal "training", and there is virtually no expenditure iddentifiable by the company as specific to the training. Of course, they pay a stipend, but against this almost every trainee starts doing value-adding work in return almost from the first few weeks.

This whole business is nothing but bonded labour - taking advantage of the young person who is desperate for a job after incurring huge expenditure on education. No developed country tolerates this kind of illegal imprisonment.

The trainee has no rights during the so-called bond period. Who will guarantee that he will be treated fairly and rewarded commensurate with his hard work, when he does not have any option to protest? How is this different from landlords "buying" bonded labour with no right to leave their jobs till a contract period is over? How is this different from the awful practice of slavery in America before the Civil War?

Think about this issue with a humanitarian perspective. HR professionals should fight with their management againt this abhorrent and archaic practice!

Raghav Rao

Hyderabad
7th August 2012 From India, Hyderabad
Yes Mr. Raghav,

It is not possible to state anything unless we peruse the document. And void abinitio, can not be applied unless and untill we go through the document able to prove it.....

Yes, many companies do withhold the certificates, but only for the specific period of time....

And, regarding, bond with a specific "reasonable period" , is legal because, it has to provide justice to the investor also, in this case the companies investment on trainee... (also depends on the kind of training companies provide, so it will not call for absolute application of the rule....)

And, regarding the expenditure on training, we can not assure this benefit untill we know what kind of agreement he has signed and what are the other clauses in the agreement which may support this.......

This is the never ending discussion, only we may enjoy arguing, but the person who has put forth the query has neither attached any doc, not sent by mail, or even putting his efforts to provide the needed........ so no point in keep writing the sentences excluding the party.... :-) ;-)
7th August 2012 From India, Bangalore
Much appreciated,
'No point' also has points:
1. It is basically a conflict between Employer's perspective vis-a-vis employee's perspective and the attitude. It is about maturity of mutual understanding. The race remains a continuous race, never won by anyone. Morale lost once is lost forever. Rs. 75000.00 penalty imposed does not really boost employer's earning. It is a clash of feeling of gratefulness. Employer never creates jobs to remain vacant. They never employ to retrench, they have right to expect employee to remain in long term, other wise it is never a win-win.
2. The pain is both sided
3. Compromising, accepting the reality are the answers; unless both the parties have no other business than to continue such never ending legal proceedings.
Best regards
db
7th August 2012 From India, Pune
Dear Mehrunisa,

Please do not misguide anybody by saying that the 'In India the bond is illegal because it is very much legal and believe me i have got many enforced against many. The only technicality in this is that the employer will have to prove that he has actually spent the amount claimed in the bond on the training of the particular employee. Article 19 gives the liberty to leave the job at will but does not curtails the rightful right of an employer to recover the money spend on the training of an employee.

I also agree that most of the employer do not impart proper training but get the bond signed. Those bonds are illegal but for the fact that they have not imparted the training and claiming the wrong money and not because the bonds are illegal per se. Do not get confused between Article 19 and legality of bond. In the instant case the bond may be illegal because the quester mentioned in his query that he has not been given any training.

The Legality of bond can only be determined by seeing the bond. Please send the copy of bond and after seeing that i will be in a position to Opine on this.
7th August 2012 From India, New Delhi
I totally agree to it. Article 19 can not curtail the statutory right of the Employer if he has actually spend the money on training of an employee.
7th August 2012 From India, New Delhi
Hi Lokesh Babu,

Many views are already logged in this discussions, & they talk about legal or moral aspects of the matter. But any such decision is to be taken on "practical" base more than legal or moral thoughts.

As you say, 75000 INR is twice the salary they were paying, & you are changing for "better opportunity", so I guess you will be earning more in the new job. Calculate your preferences, if you want to be stuck in this job for 20 more months with same (with periodic increments) salary or more salary (Again with periodic increments). May be paying 75000 will be more practical.

Also, check with your new employer, if they are hiring you as trainee. If yes, they might not need experience certificate / reliving letter from previous employer. In that case, you can consider not to pay the amount.

If new employer is joining you as experienced person, you can try to ask them to contribute for this 'Fund', so you can join them with experience certificate. If they really need you & the amount is not much, sometimes they pay for it!

Remember, Company can register a case & give a lawyer to play legal terms. They can afford it to make a example. They may already be paying a lawyer for other services.

Do you really want to spend time & efforts to go that way? Would you afford to pay a lawyer than to pay the old employer?

If after all calculations, you still think it is wise not to pay, then think also about not to leave the job for 20 months. It is seen that in such periods the employee moral is very low & productivity is down. But then try to persue your targeted goals in this period. Acquire additional qualifications / gain insight training in the company / give time to family... You might find these 20 months more fruitful than to persue others goals in new company......

Regards,

Amod.
7th August 2012
Excellent & a very different way to look @ the issue Amod.
Let's see what choice Lokesh Babu will prefer/adopt--which we would know ONLY if he responds to the various views expressed so far, on which I would keep my options open :-)
However, pl desist from mixing up the alternatives @ hand [not that one would do it knowingly, but it's quite easy to slip into such a trap, and not realize until it's very late--have seen many such instances]--there would also be some situations [including ones like the one under discussion here] that call for legal option to be exercised & some where the moral option will need to be adopted--each with it's own set of consequences/results. Like the Quote goes: 'In nature, there are no 'rights' or 'wrongs', only consequences'.
The key, I guess, is to adopt the MOST APPROPRIATE solution under a given set of circumstances--AND NOT PASSING the consequences of our actions/choices on to others.
Rgds,
TS
8th August 2012 From India, Hyderabad
Dear Lokesh

You have laws of India in your support but the moot question is whether you are willing to fight or not. As far as my knowledge and experience goes as an individual one will compromise but given an opportunity he will advice others to fight.

(1) Any bond executed between an prospective employer and employee , heavily loaded in favour of powerful [ prosepective employer in this case ] can be stuck down by courts if you are willing to challenge and spend time, money and peace of mind .

(2) For a bond or contract where you are not allowed to modify or delete clauses not in your favour is again defective and can be challenged. If all employees have put their signature on similarly worded bond , you have additional point in your favour.

(3) The present practice of drafting a bond for "compensation of amount spend on training " is a loophole devised by some companies. This can also be struck down , if it is signed before you join company as an employee. The companies are eligible for compensation for formal training [ like sponsoring your training at professional institute in India or abroad/sponsoring higher studies/ fully paid leaves for training or professional courses etc '] and not what you have learned ON JOB. You have protection by Indian laws , if your company can not show payment to third party for your training.

Now my advice , even though Indian laws are in your favour, most of us don't have choice other than signing on papers without even a single reading.Since a number of companies indulge in this malpractice, your FIGHT will make these companies LIMP in offering job to you.

Even though it is illegal and unethical , companies who don't have sound HR policies to retain talent uses your vulnerability, as job seeker, for this BOND to retain talent. You have long earning life probably another 35 years. Your company may not survive that long. Go ahead find other job, jump bond without remorse. If payment of bond amount is unavoidable,

pay the bond amount. It is not training for which you are paying but LEARNING from bad experience.

Best of luck and wishes for grand future earnings which will make this payment look very tiny.
8th August 2012 From India, Mumbai
Dear All

Section 27 of the Indian Contract Act. Agreement in restraint of trade void. - Every agreement by which any one is restrained from exercising a lawful profession, trade or business of any kind, is to that extent void.

Exception of this section is that

Exception-1 : Saving of agreement is not to carry on business of which good is sold – One who sells the goodwill of a business may agree with the buyer to refrain from carrying on a similar business, within specified local limits, so long as the buyer, or any person deriving title to the goodwill from him, carries on a like business therein, provided that such limits appear to the Court reasonable, regard being had to the nature of the business.”

In Superintendence Company of india Vs Krishna (1980 AIR 1717) Supreme court held that a contract for restrain for trade is one by which a party restrains his future liability to carry on his trade, business or profession in such manner and with such person has he choose. A contract of such class is prima facie void.

In Pepsi Foods Limited and Others v Bharat Coca-Cola Holdings Pvt. Ltd. and Others (1981-1985 DLT-) delhi high court has held that that freedom of changing employment for improving service conditions is a vital and important right of an employee, which cannot be restricted or curtailed by a Court injunction.

The learned Single Judge of the Delhi High Court in Ambience India Private Limited v Naveen Jain ( 2005 (3) KLT SN 61 ) observed that the law is well settled that all contracts in restraint of trade are void and hit by section 27 of the Contract Act. He also held that prima facie view that the agreement between the parties prohibiting the defendant for two years from taking employment with any present, past or prospective customer of the plaintiff is void and hit by Section 27 of the Indian Contract Act. The court also held that the employment contract between the plaintiff and defendant was determinable in nature and as such the defendant was entitled to determine the same and seek another employment. Everybody has a right to strive for progress in career. The restrictions imposed upon the defendant in the agreement, therefore, were void and unconscionable.

In Star India Private Limited v. Laxmiraj Seetharam Nayek and Another the Bombay The Court observed that if the plaintiff had right to terminate the contract on the ground of misconduct, it cannot be said that the Defendant had absolutely no right to resign from the employment on account of better prospects or other personal reasons. If he finds a better employment with better remuneration and other service conditions, he cannot be tied down under the terms of the service contract. The Court held that any agreement restraining an employee, post-termination, from seeking employment elsewhere.

In R. Babu and Another v. TTK LIG Ltd Chennai,( 2005 LLR 71 (Mad. HC)). has vacated the injunction order issued by the learned Judge whereby an employee after tendering his resignation has joined another Company notwithstanding that he has entered into agreement that after cessation of his employment with the Company, he would not seek any employment in any establishment elsewhere of similar nature for a period of five years. The Court held that an agreement whereby an employee agrees not to join another competitive concern for a specified period after cessation of his employment, will be violate of public policy as stipulated by Indian Contract Act hence it cannot be legally enforced in the Court

We should understand that Most of the Employment bond are one sided and it is drafted in such a way that it only favors the employers and not the employees. The poor employee are signing the bond only to get a job and to earn a livelihood and there are employers who take advantage of the same. It is to be noted that when the employer gives training to the employee trainee they also make them work for the same and they are only giving them very less amount as salary. So according to me and as per the above quoted judgment by the Supreme Court and various High Courts the bond system ( Employment Bond) is against the law and against the mankind.
8th August 2012 From India, Kochi
Even if you quote 100 cases pertaining to section 27 of contracts and Art 19, it is clearly established in India that, the bond which hinders the development of the individual, and the bonds which are void abinitio, the bonds of malafide intentions, acts impossible to do anymore, would only be made exceptions..... In this case, it is only for 3 years, and that too are bifercated, secondly the purpose is clearly established, both parties benefit from it, thridly, terms and conditions of the contract and any clauses in it does not prove the malafide intentions nor does it highlight the exploitation....... And, as discussed earlier, very true and agreed that No body can force any one to do anything, in such cases the other party who under go the losses can not keep quite in silence, he also has the right in personam to get what he was asked for and invested upon, so can always claim either for specific performance, surely for compensation and damages......

I kindly request you to read the case completely, and please know the difference between complete restraining/restrictions and reasonable restrictions, because the cases you have referred are irrelevant in this matter...... I would rather request you to check out for the case for "breach of employment contracts" in which the rights and libilities of the employer and employee.......... and also refer the cases under apprenticeship act......

In this case, if the areement is valid and the employer is bonafide mens mentis , then the candidate here can never escape the liability........

In simple words, no body can force you to do the act, but once you have agreed to do the act, which is legal, possible to be completed, then you are ;iable for what ever you are agreed for, and in case of your failure to do such acts agreed upon, you will have to pay the compensation and damages to the otherparty.....

Just think generally, if what ever the cases mentioned in there apply in every case, what should the employers do?? every on leave after the training..... who will substantiate the losses and what is the return on investment???

If still could not grasp the points said, I can explain the same taking each case being quoted and how they are not relevant in this particular matter, and how the issues completely differ.......

Both the parties are equally supported by law, what ever may the matter, afterall natural justice can never be ignored.....
8th August 2012 From India, Bangalore
Dear Babu,

The Company may offer you to sign service bond at the time of joining. However the Service Bond to be valid and enforceble should fulfil following conditions. If these conditions are not fulfilled the bond may not be valid and enforcble.

1) The company should have spend at least Rs.75,000/- towards your

training and personal devlopment etc.

2) Or the company should have offered you additional amount by way of

Retention of Salary or by any another means over and above agreed

Salary offered to you for signing the Bond. If no addtional benefits are

offered the Bond is invalid.

3) In your absence if the company is in fact sufferieng loss of Rs.75,000/-

only then only they can claim the said amount by way of

Liquidated Damages.Before the said amount is claimed from you they

should be able to establish with documentary proof that they will suffer

loss of Rs.75,000/- on acount of your absence.

4) Under the provisons of Indian Contract Act no party can claim Penalty

from opposite party. The imposition of penalty is prohibited in India.

5) Under present laws no employer can withhold Provident Fund or any

other dues from employees.These are retained by Statutory authorities

and could be withdrawn in absence of employer.

Under such circumstance only option avaliable with your employer is to

file only civil suit for recovery of their Bond amount if they could justify

their demand before court of law.

Just because you have signed Service Bond does not mean that you are

required to deposit any amount to your employer.

If they recover any amount from your full and final settlement amount

they would be doing so at their own risk and cost and shall also be liable

for prosecution under The payemnt of wages act.

P.N.PATHAK.

SR HR MANAGER.
8th August 2012 From India, Pune
Dear Mehrunisa,

You are again mixing things. No bond says that you have serve the management for eternity. Every bond says that the employee has to serve till the money spent on the training of that individual employee is recovered and even though you want to leave the organization of the employer, you may do so but in that case you have to pay the amount the employer has spent on the training of such employee.

One simple question from you, Suppose you are the employer and you train a fresher or any employee to raise his skills in his work domain and just when he gets trained he leaves your employment by saying that now i know how to do such things and some other employer is paying me more hence i am going. Just step into the shoes of such an employer, dont you feel it is cheating against him. The employer spends a lot on employee training and he is well within his right to get benefit out of it to some extant. The bonds are totally legal documents. Believe me i have got them enforces in the court of Law. But the same were genuine ones.

Article 19 and section 27 are different Scenarios. they give you safety from being slave of a company not from cheating a company.
8th August 2012 From India, New Delhi
Hello Everyone,
Where, in this mela, is Lokesh Babu?
Looks like he's vanished into thin air--after realizing that he can't misuse the many well-intentioned provisions of law--not even clarifying some points as requested by some members.
However, a BIG WORD OF THANKS to him--got to learn a lot due to this thread initiated by him.
Thanks everyone for such a high enriching level of debate.
Rgds,
TS
8th August 2012 From India, Hyderabad
Mr. babu,
first of all Bond is not valid in India under fundamental right, second at the time of resignation u r under probation period i.e. they have not permanent you, relation between \'teacher and student\' dose not stand because training period over(after 16 months)and if we consider this relation then question who is teacher and who is student because they have hired your service, ask company to give you training documents which you have signed that indicate that you have been given proper training, and never use word \'prove\' before company,company can prove it.
Best of Luck
8th August 2012 From India, Ahmadabad
It is true........ only party can not take the advantage of the other party under the shelter of precedents, because issues differ and the rule any such case apply to only such issues....

Actual damage to the employment of the individuals, and actual hindrance to the opportunities, yes agreed when the employee is no more connected with the company anymore and has dispatched his liabilities towards having towards the other party as agreed under the contract in accordance with the law........, but when he is connect with the company, and also has the liabilities towards the same in accordance with law, he is bound by the agreement.....

For example, A student who would complete his graduation in the very next year, Mr. Apple, join the company

Mrs. Orange which provides opportunity to work with it but on a condition that he must not leave Mrs. Orange for 3 years, is this an invalid, or against law ??

2) the same Mr. Apple gets apprenticeship for an year and and assurance of job opportunity on a condition that he would not leave Mrs. Orange for 3 years, is this illegal??

3) Mr. Mango, who is not a student, get employment opportunity with Mrs. Pumpkin, on a condition that he shall not leave Mrs. Pumpkin for 5 years, in which an year a training period, 6 months probation and upon satisfaction the employment...

4) The same, Mr. Mango get another employment "offer" with Mrs. Carrot, but on a condition that he shall not leave the company for 10years.....

5) Mr. chimp gets and employment 'offer', on a condition that he shall not leave the company for 15 years in which 3 years will be training, and 1 year for probation......

6) Mr. Chimp get another Offer on a condition that after working for 5 years as per the agreement with Mrs. Monkey, he shall not join any another company of a same sector for 2 years....

7) Mr. chimp get other offer on a condition that after leaving the company he shall not join 'any other company' for 1 year........

So, if you can identify which are the above are legal and difference between reasonable and unreasonable you would get the solution for the issue in question.........
8th August 2012 From India, Bangalore
Please, its a request not to mislead anyone, conditional employment agreement are absolutely legal in India, and what ever the cases you have quoted has no relevancy in this case............I am clear on this aspect as myself being an Advocate....
Go through the Section 27 and Art. 19 thoroughly, in those provisions it self you will get the explanation and its applicability......
8th August 2012 From India, Bangalore
Dear all,
All my friends in this discussion should understand that I am not here to disprove some one or prove myself. I am posting my view and others can post their views. All the judgments quoted above relates to the service bond only and it supports my view.Those who are opposing my view may please give some proof or any judgment of the Supreme Court so that we all can learn about it. Who is misleading and who is not, let the members of Cite HR decide by reading all the posts .
8th August 2012 From India, Kochi
In such case all the service bonds do relate to the judgements dealt regarding the employment bonds!!!! (...any employee filing a case against his employer regarding his rights and liabilities may refer the cases quoted above!!) Whether the matter in question or the issue relates????????

I don't really think any one would ask for a judgement when it comes to the common knowledge of common people.....

Infact, you being completed Law, no offense, you must be knowing that the term "reasonability" or "reasonable" has got NO specific definition, but the Apex court of India has clearly said that the reasonable, which is something that is accepted and acceptable by every normal person in normal circumstances as reasonable and acceptable...which is considered as fair... one which is "morally due" ; "to a fairly sufficient extent" ; "which does not prejudice the rights of others" ; "legally due" ; these are some of the words used by the courts interpreting the word.....

If you have access to manupatra, or any site which provides access to precedents, just type the word for search, you get n number cases....

And regarding Art. 19, the provision it self explains reasonable restriction, which does not make necessary to open the judgements.....

(Just because the leaves are green all trees does not fetch the same fruit..., so the issue/fact in question is important not all the related facts and dealt issues under one head... that is why Legal process has gained that prominence...)
8th August 2012 From India, Bangalore
One fact shall also to be considered that, here Mr. Babu, is not yet an employee of the company at all....... So, there is necessity to look at the agreement/bond so that we may come up with some legal back up if he needs .....
8th August 2012 From India, Bangalore
Dear Mehrunisa
Being an advocate i can tell you that reading only cover note of the judgment can be misleading. One should always read the whole text. There may be some factual or legal differences in the judgements and the real situation at hand. We in out day in and out deal with such situations on daily basis, where some judgment seems to be good enough but later it proves to be worthless in those given circumstances.
8th August 2012 From India, New Delhi
Dear All, I completly Agreed with Basima.If the bond is in Two Way then only It will be Valid Otherwise It will be Not valid.
20th August 2012 From India, Narsapur
I think a bond with an employer to serve him for a particular period after getting training at the expense of employer is legally valid.But agreement forbidding the employee from joining any particular class of companies(say competitors )is not legally valid as it is against art;19 o
f the constitution.
Varghese Mathew
23rd August 2012 From India, Thiruvananthapuram
Today regarding a case between the Nurses association and hospital management in Supreme court ( case relating to nurses strike in Kerala) the Indian Government has filed a affidavit that the the direction has been issued to all the state government that the bond system should not be enforced in Hospitals. If in hospitals bond system cannot be made then why not in other establishments. I will update regarding the same as soon as I receive the further information.
27th August 2012 From India, Kochi
Thanks to all seniors who are actively involved in this discussion.
Sorry for not responding to your query's, promising all from here onward , will be available for all clarifications.
for your reference here by attaching Bond agreement papers.
Thanks & Rgds,
Lokesh Babu.M
27th August 2012 From India, Hyderabad

Attached Files
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File Type: doc Articles of Agreement (Trainee).doc (43.5 KB, 156 views)

you may refer the doc... and i say that the agreement has stand and you're under obligations..... you mention that you have worked there for 16 months and now left the company, so in that case after the training period of one year, the company must have drawn the employment agreement and laid down the new terms and conditions. you were related to the company as the trainee and in case of 16 months, what was your role??

You must have objected for the clauses 08 and 14, and it's tripartite agreement as it also involves the person who guarantees. Anyways, since you are sure about your employer that no good amount is being spent on you during training period, you may defend the situation.

But I personally suggest you that you join the company as employer but make sure that the terms of the employment are bound by the period and also in favour of the employee unlike the present one, in the present one no choice of the trainee is taken in to consideration. You Can always take up the defense saying that you could hardly learn and satisfied with your training and you have no hope that your career path will be drawn and it is hindering your growth. Demand for more salary so that they can not offered you. Read well and understand before signing any document!! I can not guarantee the absolute escape but chances are there testing your luck....
27th August 2012 From India, Bangalore
ON the job training fall under Apprenticeship Act, and the agreement is not in accordance with such law........ so you may rely on BSSV’s reply....
27th August 2012 From India, Bangalore
Dear Mehrunisa Basima,
The case at hand is a policy decision at Government level. It has nothing to do with Bond in the private sector, which is signed to safeguard the interest of such employer who has bonafidly invested to raise the skill level of any employee. The strike was called over various other issues also. Please see the link below.
Kerala nurses’ strike over pay intensifies pay spreads in
It depends upon situations on case at hand and bond per se is not an illegal concept. Whatever judgments you referred earlier were on bonded labour system, which is all together different thing or were false bond cases. Genuine ones are still very much enforceable and legal.
28th August 2012 From India, New Delhi
by the way, Lokesh, what is the name of that company and where is it?? (just out of curiosity I am asking, always better to know the pitfalls.......)
28th August 2012 From India, Bangalore
That is why any one needs to be very accurate & conscious while signing to anything and to be well versed with the agreement clauses and its effects.....
The below link is one such funny and brilliant example of interpretation of law and facts.......
Click on the Link : http://en.paperblog.com/samsung-pays...-coins-294795/
29th August 2012 From India, Bangalore
hahahahaha BSSV :-) No wonder they say — the law is an ass!!! — no pun intended pl. Rgds, TS
29th August 2012 From India, Hyderabad
Very good interpretation really BSSV. But i have my doubts it is real but still this could be a possible way to comply. Ha Ha Ha Really good.. :)
29th August 2012 From India, New Delhi
Now "But i have my doubts it is real but still this could be a possible way to comply.", this is advocacy on HR Site !! HHe hhe, ha ha ha ha ha ......
29th August 2012 From India, Bangalore
Hello BSSV & Kamal Kant Tyagi,
Knowing Koreans, I wouldn't be surprised at all if this is indeed true--seriously :-)
But in all this mela, where is Lokesh Babu? Not sure if he has already made up his mind on his course-of-action.
I wish he gives an update from his end too.
Rgds,
TS
29th August 2012 From India, Hyderabad
Damages for Breach of Service contract.
A contract for service is arising under the Indian Contract Act, 1872. As per sec. 73 of the said Act is provided as under:
“Sec. 73. Compensation for loss or damage caused by breach of contract –
When a contract has been broken, the party who suffers by such breach is entitled to receive, from the party who has broken the contract, compensation for any loss or damage caused to him thereby, which naturally arose in the usual course of things from such breach, or which the parties knew, when they made the contract, to be likely to result from the breach of it.
Such compensation is not to be given for any remote and indirect loss or damage sustained by reason of the breach.
Compensation for failure to discharge obligation resembling those created by contract - When an obligation resembling those created by contract has been incurred and has not been discharged, any person injured by the failure to discharge it is entitled to receive th
1st October 2012 From India, Panaji

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