Are Employment Bonds and Agreements Legal? Seeking Clarity on Contractual Terms and Employee Rights

Dear all,

I would like to have clarification on the following:

1. Are any agreements/bonds legal in the eyes of the law?
2. If so, under which law?
3. If a contract states that an employee is on a contractual basis only for 2 years and that the contract is renewable after 2 years, but the employee will be purely a temporary employee, are such conditions legal?
4. Again, under this agreement, if it is written that the employee can only leave after giving 2 months' notice, is such a condition legal, as on one side the contract states that the employee is on a contractual basis only and temporary employment?
5. If, against such an agreement, the company asks for an undated cheque amounting to 2 months' salary and states in the agreement that such a cheque will be deposited if any of the conditions in the stated agreement is not fulfilled, I would like to have a legal opinion on this condition.
6. If a company is permitted towards such kind of agreement, then the company can easily walk out by not paying gratuity to the deserving employees.
7. What are the legal implications of bonds/agreements?
8. How far are employees or labor safeguarded under such bond or agreement?
9. Certain companies even ask for a pay order deposit which will be released back with a 5% interest after 1 year. No deposit slips are given towards it.

I tried to refer to labor law for the above-mentioned questions but couldn't find suitable answers to them. I request you all to help me with these questions.

Meghal

Answers:

(1) Yes, agreements are under the law, e.g., labor contract agreement under the contract, etc. Duration preferably 11 months.

(2) All workers under the contract are casual or contract workers and are bound to obey the company's rules and regulations. They also have the right to enjoy some recreational activities within the organization. They should not exceed 240 days in a year and are required to take breaks. A temporary employee is like a trainee for a duration of 6 months or 1 year.

(3) Trainees and those who are directly employed by the organization on a contract basis are required to complete the specified notice period mentioned in the organization's employment letter. If they leave before the notice period, the organization is liable to deduct salary for the remaining days of notice.

(4) Gratuity is payable only after completion of 5 years under the Gratuity Act.

Above all, contract laborers fall under the Contract Act, and the rules and obligations to be followed by them are mentioned in the agreements between the company and the contractor. Otherwise, the rules and regulations of the company apply in case you are confused.

Dear All,

All agreements are governed by contract law. For an agreement to be valid and binding and to be enforceable in a court of law, it should not be:

1. opposed to public policy.
2. contrary to the law of the land.

If the agreement also fulfills the criterion of capacity of the parties and is with the free consent of the parties and is for consideration, a contract is said to be legal. When reviewing any agreement or bond, it is essential to keep these principles in mind.

If an agreement is contrary to the law or regulations in force, then it is invalid. By interpreting the bond or agreement in question in line with these principles, it will bring about the solutions that you are seeking.

Mohamed Jameel

1. All agreements/bonds are not legal in the eyes of the law. They may be void depending upon the conditions stipulated within them.

2. The nature of a contract/agreement reflects the law under which it is governed, primarily contract law.

3. It is illegal. However, if the parties agree to the contract terms, a person who continues to work for more than 365 days is entitled to permanent employment. If they voluntarily accept a 2-year contract, little can be done as it is a common practice.

4. It is valid as both parties accepted it.

5. It is a wrongful practice to hold individuals as bonded labor - it is not allowed.

6. The company must ensure compliance with regulations.

7. An employment contract between the employer and employee is permissible depending on the lawful covenants.

8. Bonded labor is banned.

9. It is a wrongful practice.