Dear All,

One of my friend is working in a cooperative bank in the designation of administrative manager. He was issued with a appointment letter during his joining stating that he has to agree to the terms of the agreement which was not at all specified and he will be placed under probation for a period of 01 year and further extension based on performance. During the formalities he was made to sign the contract for 05 years which was one sided stating that he has to forego or pay 3 months of salary with 3 months notice and 2 lakhs if he is leaving before agreement period. He had no option than to sign the agreement because he had already resigned from his previous company.

After a year, his contract was extended for a further period of one year and after that he was extended for further two years (i.e, 1 then 2 yrs). He has now completed 3 years.

He was assured that after 01 year they will make him permanent whereas till now he is continuing under contract agreement only.

If he leaves what will be the consequences as they are now saying that three months notice without pay and 2 lakhs has to be paid if he wish to leave.

Certain questions raise here :

1) Is this type of agreement is valid in law.

2) If he leaves the bank what will be the consequences

3) They are not ready to give relieving or experience certificate.

4) He cannot show this experience in his CV as they are not ready to give relieving or experience certificate.

Can the experts guide him what should he do further.
24th November 2016 From India, Hyderabad
Dear Querier,

You have mentioned that your friend was issued with an appointment letter and later he was made to sign a contract for Five years with certain stringent conditions.

The reply to your queries are given in seriatim:-

1) Is this type of agreement is valid in law:- This type of agreement or contract are getting signed to create psychological fear in the mind of employees but in practice those are difficult to implement being, one sided in nature.

2) If he leaves the bank what will be the consequences :-They will issue him a letter quoting the violation of terms & conditions of the contract. Besides they will not issue him the relieving and experience certificate.

3) They are not ready to give relieving or experience certificate:-Surely they will not, as mentioned in my earliar reply.

4) He cannot show this experience in his CV as they are not ready to give relieving or experience certificate:-You are correct or he has to explained the circumstances to the new Employer talking him into confidence.

BS Kalsi,

Member Since August, 2011
25th November 2016 From India, Mumbai
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