HI. I joined one company and i have signed for a service bond of 18 months. And the bond is 100/- Rs bond and My relative had signed for that bond as surety and I gave the address of my relative. If I break that bond then i have to pay 60000/- Rs for the company. now I am planning to leave the company. I have not submitted any original documents to the company. If i leave what all the problems i can face. and also will it make any problem to my relative. ???
Is this type of activity allowed in the Indian Constitution. like bonded labor thing and all, and also this service agreement and all..
please do help me with this heavy problem.

From India, Bangalore
Consultant In Legal Matters
+1 Other

Under sections 73 and 74 of the Contract Act, reasonable amount of damages can be recovered proportionate to the expenditure incurred upon the employee in imparting training etc, irrespective of the liquidated amount stated in the bond. Such is the prevalent law today.

However, a new dimension of diminishing of liability of employee under bond is visualised which may be tested in judicial fora. Thus in respect of employees governed by State Shops and Establishment Act, and those governed by Payment of Wages Act, it is generally laid down under the Acts that wages shall be paid without deduction except when authorized by law. Thus even if employer and employee agree through agreement, then even employer cannot recover any amount from the wages of the employee, except in the manner authorized by law. It follows that the above bond agreement between employer and employee is superseded though executed under contract Act. The provisions of Payment of Wages Act and Shops and Establishment Act supersede contract Act provisions to that extent. If debt from employee cannot be recovered from wages of employee as it is bad, so it cannot be recovered from surety. This is new dimension of diminishing of liability of employee in the above line of approach.



From India, New Delhi
Hi all,
I had signed a Employment contract as a Software engineer with more than 7 Years work exp with a Job agency to work for 12 months at Client Location. But i haven't joined yet and so didn't specified the Joining Date also.
But in the Appointment Letter it is written - "In the event of your failure thereafter to Join the company and honor the contract, the Company may initiate such action against you as deemed suitable or Advised" .
But if i don't join itself in the 1st place then how could they take any action !!
I am expecting a Job offer to come.
Thanks in advance.

From India, Pune
Till you join the company, you are not an employee of the company and cannot derive benefits of Karnataka Shops and Establishment Act, whereby after joining you could have resigned as per the provisions of contract. But before that stage arises you will be governed by provisions of Contract Act whereunder sections 73 and 74, the job agency may require you to pay suitable damages because of rescinding and repudiating contract by you in terms of the Apex Court decision in Kishori Lal vs Union of India decided in 1959.

From India, New Delhi
The Bond in question was created by employer in lieu of what and is it stated in the Bond that in lieu of ......................employee has agreed to work for...................day/months?

This is the question that needs to be answered by the querist and the Bond needs to be examined verbatim alongwith job advt.,job application,employment application,interview call letter, selection letter,offer letter,appointment letter, Bond, copy of resignation etc..............................

The liquidated damages stated in Bond need not to be paid on demand and may have to be proved.........

As per various publications/threads the Bond/service Agreements have become a nuisance and even unscrupulous employers that do not honor labor laws ,rights of employees ,do not pay wages on time, do not give Over Time, indulge in malpractices, unfair practices and are thus offenders………………..are throwing Bond to sign…………………
The employees that do not unite, form unions,become members of employee’s unions, affiliate trade unions like CITU,AITUC,INTUC,BMS etc…………….are exploited………………………

Are you aware that ‘Works Committee’ as in Industrial Dispute Act: is an authority and many states have made it mandatory to form Grievance Redressal Committee in each company.
The united employee’s can negotiate service conditions and union leaders can help to fight such exploitation………………………

From India, Chandigarh
Thanks for the Reply.
Employee has agreed to Work for 12 months at CLIENT Location and IF I don't then i have to Pay a Sum of Rs. 100,000 INR to the Employer i.e the Job Consultancy(3rd Party Payroll Company). THis is mentioned in the Employment Agreement. Secondly when i talked to the HR he said this penalty will be levied when i join the Client Location.
But, i missed on one Point in Appointment Letter :-
Under 'DUTIES & OBLIGATIONS' section : Termination :-
Your Employment is Liable to be Terminated without assigning any reason.
Similarly i can resign by giving 90 days notice period only if the project duration is Over OR resignation approved by Concerned Project Incharge.
In the event of LEAVING the Company Without giving ANY notice , you shall pay to the company a Sum Equivalent to 3 months of your last drawn salary.
If i don't join in the first place, why would i pay anything !!
Request for your inputs experts.
Thanks !

From India, Pune

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