Industrial Relations And Labour Laws
Labour Laws Consultants
Recruitment/talent Acquisition, Career Counselling
4th October 2014 From India, Kannur
4th October 2014 From India, Nagpur
It is not a matter of labour laws. As both the parties has agreed to fulfillment of certain tasks and agreed for deduction of security which is refundable subject to Completion of stipulated MOU period and notice period at the time of resigning.
As such you may lose the security deposit if resigns before the completion of stipulated time period.
6th October 2014 From India, Delhi
As specified in my earlier reply, this is not a "Contract" for fulfillment of certain tasks in certain time. I agree to what you say, which is perfectly valid for say a software development or for a contractor to complete the building work within stipulated time. As said in my original post, it is an "understanding" between me as a "Professional" and my company. Instead of being treated as an "Employee" with standard deductions, I am working here as a Professional and signing all official document/ letters of the company.
I hope I have made myself very clear.
6th October 2014 From India, Nagpur
7th October 2014 From India, Kannur
Further to what Madhu.T.K mentioned, there is ONE VERY CRITICAL point that you need to keep in mind--irrespective of which Act this MOU falls under.
The Clause "3.2.2. Stipulated notice period at the time of resigning, on completion of MoU period or even during extended period after completion of stipulated MoU period" literally gives the absolute right to the Organization to hold you to ransom perpetually [the key words being "or even during extended period....."]. So practically the Organization can keep extending the MOU period.
Also Clause 3.1 mentions "The Trust has an amount of Rs.XXX/- (Rupees XXXX only) from the Professional’s previous agreement as a security deposit". What's this about? Since when have you been working here?
In Total, how much does the Hospital hold your money as Security Deposit--as of date?
Pl give more inputs so that the members can give more realistic & actionable suggestions.
7th October 2014 From India, Hyderabad
Thank you all for your comments and advice. I have joined this organization on 01-Jun-10 as a "Professional" and designated as "Chief Operating Officer". The initial engagement was for 3 years which expired on 31-May-13. The MoU was renewed for a further period of 3 years from 01-Jun-2013. To get a clear view, I am pasting the whole MoU wording below. Obviously, certain words are replaced with XX for reasons best known to you all. Pl. go through the entire MoU and comment. TIA.
MEMORANDUM OF UNDERSTANDING
The MOU is made on 1st day of June 2013 between XX, bearing its office at XX, hereinafter called as “The XX”
Mr. Deepak Kanade resident of XX, Cell:XX, e-mail :firstname.lastname@example.org, hereinafter called as “The Professional”.
They have mutually agreed upon the following:
1. Professional Fee:
1.1. The Professional will render his services as an Executive and Consultant to XX and allied XX and will be paid a consolidated professional fee of Rs. XX /- (Rupees XX Only) for 240 hours per month for his services from XX and allied XX taken together.
1.2. The exact modalities including tax details will be done by Accounts / Finance department as per the policy of The XX. TDS as applicable will be deducted from professional charges & incentives payable.
2. Tenure of Agreement & Notice Period:
2.1. The Professional will render his services for a minimum period of 3 years from 1st June 2013 to XX.
2.2. The XX will give a one months’ notice to The Professional for discontinuation of services. However, the MoU can be terminated prematurely by The XX with or without giving any prior notice, with or without any remuneration, if it is observed that any act or behaviour on the part of The Professional is not found to be in harmony with the conduct of The XX or causing disrepute to The XX. The decision of The XX will be final and will be binding on The Professional.
2.3. This MoU will be in force for a period of Three Years initially and will continue to be in force till such time the next MoU is signed OR there is a written notice for discontinuation of service from any one of the party.
3. Security Deposit:
3.1. The XX has an amount of Rs. XX /- (Rupees XX Only) from the Professional’s previous agreement as a security deposit. Additional Security Deposit of Rs. XX /- (Rupees XX Only) will be recovered at the rate of Rs. XX /- (Rupees XX Only) per month.
3.2. The security deposit will be refunded to the Professional if the Professional does not violate any of the following terms:
3.2.1. Completion of stipulated MoU period.
3.2.2. Stipulated notice period at the time of resigning, on completion of MoU period or even during extended period after completion of stipulated MoU period.
4.1. The Professional shall attend the XX from 08:30AM till completion of the work on hand for the day.
4.2. The Professional shall log-in a minimum of 8 hrs. of working per day.
4.3. The Professional shall attend emergency/ night calls as and when necessary and/ or as per the duty schedule.
5. Working Relationships:
5.1. The Professional need to have good interpersonal and professional relationship with other XX.
6. Responsibilities and Performance Expectations:
6.1. The Professional will be responsible for all day-to-day XX and other activities/ functioning of the XX, projects and work assigned to him from time to time.
6.2. The Professional will be responsible to assign the work and get the assigned work completed from AGM/ Managers/ In-charges and other staff members.
6.3. The Professional will be responsible for complying all statutory requirements, registrations and licenses.
6.4. The Professional shall be responsible for safety of personal, equipment and instruments in the XX and at its projects.
6.5. The Professional will take necessary steps for enhancement of revenue generation and curtailment of expenditure.
6.6. The Professional shall act as a change catalyst and enhance the speed of changes by suggesting/ implementing/ monitoring/ reporting the changes suggested/ required/ desired towards a better functioning system based XX.
6.7. The Professional shall formulate and implement various policies in team within the required time frame.
6.8. The Professional shall take active participation in management and administration.
6.9. The Professional shall show a visible team leadership.
6.10. The Professional shall conduct/ attend required management meetings as per the directives and timings published from time to time.
6.11. The Professional shall engage in active learning process to keep himself constantly abreast.
6.12. The Professional shall give thrust on continuous process improvements together with effective & efficient execution with quality and system oriented scalable work culture in the XX.
6.13. The Professional shall be responsible for storage of data, data management, backup of data, keeping secrecy of information and data related to hospital.
7.1. The Professional will report to the Board of Trustees.
7.2. The Professional can be posted in any of the periphery centers of XX on temporary duty for management of hospital. The Professional will have to visit periphery centers of XX as & when directed.
7.3. The Professional shall conduct/ attend daily morning meetings conducted at 09:00AM. It is expected that The Professional will discuss issues related to process/ system changes and stabilization. The Professional is also expected to act as a “Change Catalyst/ Change Agent”.
7.4. The Professional shall not bring disrepute in any way to the XX by discussing the style of management, remuneration aspects, performance etc. with the outside agencies/ individuals. The said behaviour shall be treated as “breach of trust” and shall be admonished as found suitable by the management.
7.5. The Professional will be fully dedicated to the XX and its associate XX as and when necessary and directed by the management. The Professional will not provide his services outside in any form (neither private practice nor charity).
7.6. In addition to the monthly professional fee, the Professional shall be paid an annual leave reimbursement of 20 days on pro-rata basis for the completed financial year. The reimbursement will be paid along with professional charges of May in the succeeding Financial Year.
7.7. The leave reimbursement shall be admissible in total if the attendance during a financial year is 270 days. For annual attendance below 270 days, it shall be paid on proportionate basis.
7.8. The professional will get facility for management training at XX for one month.
7.9. The XX hopes that with The Professional experience, training, involvement and dedication The Professional will be able to build a department of international standards for The XX to be proud of.
Mr. XX Mr. Deepak Kanade
Date: __________________ Date: __________________
7th October 2014 From India, Nagpur
7th October 2014 From India, Nagpur
The security deposit as it is not illegal especially since you have agreed to it and there has been a considerable deduction from the past. Therefore, you cannot dispute it now. Termination of the MoU is possible by giving one month notice (is it not one month?) to the company and with this the amount held as security deposit will become as per 3.2 the amount is payable if you complete the project or leave the company after giving the notice as required. Moreover, since the MoU is not less than an employment, the company is not in a position to hold a security amount for unreasonable period. When viewed from the perspective of Contract Act also, the restrictive clause compelling a person not to leave until the project is completed is illegal and may make the contract voidable.
From the TDS part I also understand that you have professional qualification to substantiate your engagement, otherwise the tax would be 1%.
7th October 2014 From India, Kannur
I am back after almost 8 months. Frustration of having to loose almost 2 lac on account of security deposit and settling down in new engagement took that much of time.
My request to you all:
1. Is the "memorandum of understand" legal?
2 if not, can i initiate legal course of action?
3. If affirmative, where to demand it? I have relocated to another city.
14th May 2015 From India, Nagpur