Vipul Badhik
Hr Manager
Mba , Pharmacy , And Ovously Clubbing.
Talent Acquisition / Consultant - Catalis
Consultant In Legal Matters
V. Balaji
Ir & Hr
+2 Others

Thread Started by #hi5

Dear Sir,
I am with a company for last 1 year and with a bond for 2 yrs with the same.
I am getting a good offer from other companies as well as professional development as well.
Please advice if i break the bond and join another company. What could be the impacts?
Please advice!!!
Thanking You.
21st June 2013 From United Kingdom, London
Dear Friend, Impact would be the same mentioned in your bond.
21st June 2013 From India, Pune
In Bond, it is written 1 yr salary if i break the bond which comes across 3.5 Lac. Do i need to pay the same. Pls advice !!
21st June 2013 From United Kingdom, London
Can’t help it accept managements discretion to waive it. You have to go by that.
21st June 2013 From India, Pune
A lot of things will go into this before answering this question.
1. What is the clause of the bond - If it comes into enforcement right from your joining date or from the date of your confirmation?
2. What is the clause of payment? Are you to pay the bond amount if you break the bond and resign or even if they are to terminate your services?
3. Have they provided you any training?
4. What is the separation policy?
If you can share the exact details of the service agreement (you can hide the company's name and you name for your benefit) and give us rest other details, we'd in better position to understand the impact and hence give you solutions.
21st June 2013 From India, Mumbai
Dear Hi5,
this really critical situation, and I know because we have bond system..
If you will break the bond then you are required to pay everything which is mentioned in bond dear...
think over this...
then and then take..
according to me if you have to pay that much for breaking the bond then you should not break the bond dear.. It will also create your bad profile in another organization.. Let it go.. you will get more good opportunity....
best of luck dear...
21st June 2013 From India, Rajkot
Dear Friend.
It is not desirable to break the bond, once you have been offered a job with condition of service bond then you have to fulfill the condition of bond.
But it is not possible to remain continue in your present job then after fulfill the condition of service bond and pay the amount of bond and relieve from service.
If bond condition is one way and bond is like contract between Goat & Lion then breach the bond.
22nd June 2013 From India, Mumbai
Ask just one question to yourself.

a) Why was the bond signed ? Did they commit to give you training and which resulted in skill development or any other benefit to you, which will result in material loss to the organisation if you leave.

If yes, then, pay up and move on.

But, if the answer is no, then just move on

If, they have not added any value to your skill sets, then, the bond is not enforceable. The reason is, that, a contract is deemed to be in force when the terms of agreement by both sides are effected and fulfilled to the satisfaction of both the parties. If one side does not honour the commitment, then, the other person is in a position to either walk away from such contract or seek damages.

So, in case they have not delivered to what they have committed, then you can walk away or even seek compensation for having wasted your time in the company assuming that they will honour their commitment of training you or enhance your skill sets, which have not happened. Bond cannot be one sided. If the above has not happened, then you can write to your HR to honour the clauses of the bond, which would have mentioned that they will train or enhance your skillsets.

Just getting a bond signed without giving considerable enhancement of skills or training is deemed to be bonded labour which is banned in the country and the person who signed it from the employers side can be imprisoned.

And also please understand that the duration of the bond has to be commensurate with the value that has been added to you. Just by putting you through a training which costs some USD 1,000 and ask you to sign a bond for two years is not valid. The reason being the material loss, thus caused, is not significant compared to your profile, since you say you earn INR 3.5 Lakhs.

But, in case, they have sent you abroad for a training which is not available in India and you have a task to come back and transfer that learning to all others, then the period of the bond has to be equivalent to the time taken to transfer the skills after returning from the training abroad.

Or for that matter, if you are sent for a MDP program to IIM or Harvard, then the bond for 2 years is valid.

Or for that matter, if you have been given a very specialised training, which very few people have, then the bond is enforceable

In case the above elements or elements similar to above are not fulfilled, then the bond is null and void. Also the court would reprimand the company for having taken advantage of a person's helplessness, especially, if the bond is signed after the employee has joined. And in case of a fresher, it does not matter, if it is signed before joining or after joining, the company is taking advantage of the candidates helplessness and this is considered illegal.

There are numerous cases in the manufacturing sector where the Supreme Court has given judgements favouring the employees. Whereas, in the IT sector every second small company seems to be signing up bonds and the employees do not consider suing the company because they are in a hurry to go abroad or are in a hurry to become a VP or CEO by 35 or 40 and so don't want a blot in their resume,and hence this illegal habit of signing the bonds are quite rampant in small companies.

Please look at the contents of the bond and check whether they have honoured the commitment. But, if the bond clause says that company will invest in your training, and after that, during the tenure, if the company has not given you a letter stating the type of training that is being given with reference to the clause of the bond, then such bond is not enforceable.

Because two years is a huge period in one's life and as per various Supreme Court judgements, an employee cannot waste his career assuming that the so called enhancement of skill sets or training is getting implemented. It has to be specifically spelt out in a separate letter after you join with the date of commencement of training and the date it ends on and who will train you and where will such training happen and the letter has to refer to the clause of the bond that you have signed.

If all the above are not fulfilled, then the bond is only a piece of paper and tell the employer that in absence of the above, the contract has not been fulfilled and hence you are leaving the organisation.

Have a great future ahead.

22nd June 2013 From Indonesia, Jakarta
All companies do business and your engagement also a business only. You offer them services and they return it to you by paying salary. If the job demands a specialised training and the employer "invests: huge money on such training, certainly it is fair from his part to look for return. The skills and the knowledge injected in you by training becomes inseparable throughout your life and it is irrevocable.
Therefore an agreement is signed between the employee and the employer. Employee agrees for such arrangements and signs the same. Then if the employee wants to separate and wants to work for some other organization, the employer has to be compensated for his efforts to train him. There is nothing wrong in his expectation.
Still you want to move to another company, better you pay the money as per the agreement you signed.
V. Balaji
25th June 2013 From India, Madras
hi this is amith,
i have signed a1 year bond with a company and they have taken 1 lakh rupee check as security. If i break the bond will the company produce the check to bank...will it be huge problem
26th February 2014 From India, Chennai
Employment bond is not valid in India as per court judgements.
Read the blog here to know better.
CS RAJAN KUMAR's......Blog: Bond is illegal
27th February 2014 From India, Lucknow
If the cheque bounces, then, it will be a huge problem indeed.
28th February 2014 From Indonesia, Jakarta
Hi Amith,

Many IT companies practice the bonds because they give extensive trainings to their employees to make them productive.

The bond amount / security deposit that they ask for is usually related to the training and opportunity costs involved in the process.

Many of my friends had this scenario and yes, ideally they encash the cheque and keep the amount with them.

Once you start completing the blocks of months of your bond, they usually repay that amount in installments relatively.

You can talk to your HR about the details of the bond, how will they keep the cheque and how will they repay that deposit over a period of time....

Hi Pon,

In respect to your following post -

Bonded employment is surely illegal but that don't mean that service agreements by itself is illegal.

Service agreement is an agreement / contract between the two parties.

Usually both parties agree to be with each other for a certain duration.

A proper service agreement is as applicable to the employer as to the employee and in case if the company terminates the employee, the employee in such case do have a right to be compensated except if he is terminated due to misconduct or some gross offence.

Serivce agreements applicability and legality depends on case to case.
27th April 2015 From India, Mumbai
You may like to read the thread "Need to get relieving or service certificate without paying bond money" referring to some relevant legal provisions. But as far as possible comply with your terms.
27th April 2015 From India, New Delhi
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