swati-hr1
7

I had an offer from X company, after joining i.e on the day of joining they have given some documents (employment contract) to sign.

Although HR has explained clearly about every condition and points of the contract, but there was one point which says that I have to stay with the firm for the next 2 years i.e I cannot resign before the completion of 2 years and if I do so I have to pay Rs.1 lac.

So, I refused to accept this condition and did not sign their contract papers, in return to which they revoked my job offer, and I am jobless at present.

In fact I had an argument also with them, that they should have informed me about such conditions before releasing the offer, I would have decided and taken the decision there itself and not wasted time for both of us.

To which they had no answer.

I request the professionals to please clarify my concern with such conditions that employers force on the candidates they hire.

Is it legal to hire on contract when the employment documents state the role to be permanent?

From India, Noida
PROFESSIONALS AND BUSINESSES PARTICIPATING IN DISCUSSION
Dinesh Divekar
Business Mentor, Consultant And Trainer
Umakanthan53
Labour Law & Hr Consultant
Saswatabanerjee
Partner - Risk Management
Sumitk.saxena
Service/manager-hr
Swati-hr1
Hr Professional
KK!HR
Management Consultancy

Dinesh Divekar
7710

Dear Swati,
What we call an "Appointment Letter" is an employment contract. An employment contract is between an "employer" and an "employee". However, before entering into the contract, both parties should have discussed what would be the terms and conditions of employment. Both parties entered into the contract with assumption. The assumption was discovered at a much later stage.
Now both parties have suffered losses because of the assumption. Since the employer could not employ a selected candidate, he will have to continue to work without the employee. It could suffer that department's work. On the contrary, the employee's loss is far more severe. She will have to put up with disruption in monthly cashflow. It could put up her financial planning in haywire.
However, there is no legal solution to this problem. The learning for you and others from this incident is to clarify clearly the future terms of employment.
As a candidate, I recommend you start searching for a new job vigorously. May you be destined to get a better job.
Thanks,
Dinesh Divekar

From India, Bangalore
sumitk.saxena
252

Dear Swati,

Greetings for the day,

As far as ur matter is concern I have gone through the type of Bond. Bonded labour in any condition is totally abolished by the the law but the 'Surety Bond' is still in domain of various Public Sectors Undertakings under Government of India and Private Sectors Enterprises the candidates who are selected for the post of Management Trainee under Coal India limited had to sign a surety bond which states :

1)They will have to serve the corporation for a minimum period of prescribed months, with regard to which a bond of Amounted to be signed with the selected candidates.

2)An amount of ----- will be deducted from the selected candidate’s salary for 60 months which will be refunded with interest on completion of 60 months

3)In case the candidate’s performance is found unsatisfactory by the corporation, the service of the candidate during the probation period will be terminated in accordance with the terms & conditions of offer of appointment & receipt of satisfactory police report.

so please go through the type and defination of the bonds and seek legal advice befor signing the same.

Thanks & Regards,

From,

Sumit Kumar Saxena

From India, Ghaziabad
saswatabanerjee
2357

True they should have told you about the condition when recruiting you.

But legally you have little rights because you did not sign anything before that point. Oral agreements (offer and acceptance), though valid in law, is difficult to prove in a court of law.

I did not get from your post where exactly did they put you on contract. In general, put on contract means its a fixed term employment, or employed through a contractor or the work is not full time and you are not on the payroll of the company (Paid professional fees). So i think you need to check your wording and your understanding of the terms or you will end up with a wrong advice.

That being said, employment bonds are recognised in India only in cases where the employer is providing a certain specialised training, imparting skills by way of formal training and not otherwise. Further, courts have also held that the value of the bond can not exceed the cost of training. In most cases, in house training and on job training are not counted for this purpose. Therefore even if you had signed the agreement, unless they were giving you specific training, the bond would be non-enforseable

From India, Mumbai
swati-hr1
7

@Saswatabanerjee and @Sumit Kumar Saxena
There is no such condition as mentioned by you.
It was a full time employment for the post of Senior HR Manager.
The Offer letter includes this statement.
They have also mentioned while convincing me that they will write the same thing in appointment letter as well.
The only condition as per that agreement was that I cannot resign before the completion of 2 years irrespective of any reason, if I do so I had to pay the amount mentioned in the contract.
They also mentioned if I fail to pay the amount they will follow legal path.
Now, being into HR, if I myself is not satisfied with this condition, how will I convince other employees joining after me to agree on this point, in-fact the one which is completely illegal.

From India, Noida
saswatabanerjee
2357

ok, so what exactly is your question?
From India, Mumbai
sumitk.saxena
252

Dear Swati,
Saswata and I already made it clear about SURETY BOND but in current scenario In various organisation you go through the terms and conditions of notice period if the conditions is not fulfil then u have to pay what company mentioned in their STANDING ORDER which have legal validation.So please go through the legal opinion from any legal expert.
Sumit Kumar Saxena

From India, Ghaziabad
saswatabanerjee
2357

Dear Sumit
You have made an interesting point.
Do you know any case where standing orders mention that the employee has to pay if they do not work for a certain number of years?
Based on my understanding, Standing Orders have to be approved by the Labour Commissioner before they are certified. And no labour officer will accept these terms in the standing order. I am specifically asking because you have raised an important point. it could be used to bypass the terms of the supreme court judgement on employment bonds.

From India, Mumbai
umakanthan53
5959

Going through the post and the responses, my observations are as follows:
1) The poster's contention that a permanent job for which applications were invited was later converted into a contractual job after selection is not correct.
2) Employment Bond requiring a new appointee to serve the organization for a minimum period after induction or to pay a specific sum of damages by the employee in case of failure cannot be considered per se as illegal. It depends on the nature of the job and the duration of time and the amount of money invested by the employer to train the new appointee.
3) But fairness and transperancy of communication requires the prospective employer to mention such a condition in the advertisement for the job itself or at least in the offer letter after selection. The facts described by the poster show that such a condition was revealed to her for the first time only after her joining. Thus the very process of recruitment and appointment not only lacks professional standards but ethical too in view of the nature of the job position advertised and offered.
4) Since the job is that of a Senior HR Manager, no one can reasonably think that it would require any long duration of on the job training after appointment or two years to be a period of notice to be given by the newly appointed employee in case of her resignation later.
5)Juxtaposing the comparative losses incurred by both because of this unhappy situation created by the employer, the poster seems to be at a greater loss because she has lost her previous job and the present one due to the communication failure of the organization which appointed her unconditionally but later insisted on the execution of the employment bond that could not be accepted by the poster for reasons which are valid and reasonable. Therefore, the employer is bound to compensate the poster for her present unemployment and the mental agony virtually created by the employer.
The poster can institute a civil suit against the organization, if she desires and claim damages though it can be a long drawn battle. She can consult an experienced civil lawyer well versed in service matters. After all professional ethics is more important in matters of employment.

From India, Salem
sumitk.saxena
252

Yes Saswata agreed my point is exactly same as u mentioned. sumit
From India, Ghaziabad

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