Understanding Employment Bonds and Legal Notices: Employee Rights and Responsibilities

Hi,

I am an HR professional in an IT MNC company. My company requires freshers to sign a bond, stipulating that if they do not complete one year in this organization, they will need to pay 1.5 lakhs to the company. Recently, one of our employees signed such a bond but left the organization after completing only three months. I have a query regarding whether we, as a company, can send him a legal notice and what consequences the company might face. I also wanted to inquire if bonded labor is allowed in India.

Please help.

Dear Avani,

I want to introduce myself. I am Jayant (B.Sc. LL.M. Labour Law). The bond between the employer and employee indirectly suggests that neither party has faith or trust in each other. If the employee is breaching the conditions of the bond, then the employer has full rights to take action against the employee. However, it is also important to note the reason for the employee's resignation. If the employee is mentally harassed by his seniors or colleagues and thereby compelled to resign, then the employer does not have any rights against the employee.

Hi, thank you so much for your reply. I completely understand when you say that when an employer makes the employee sign a bond, it becomes a matter of trust. However, since the employer invests a lot of time and money in the employee's training, it becomes necessary for employers to take precautions like making the employee sign a bond.

The question at hand is: Is bonded labor legal in India? I mean, is it allowed? Does our legal system give employers permission to sue employees in case they breach the bond? Kindly advise so that we can proceed with the procedure.

Thanking you in anticipation.

Avani

Dear Avavni,

This is not a question of the Bonded Labour system. Bonded Labour and the bond given by the employee are two different things, and you should not mix them up. In your case, based on my experience, 1) your bond may not be valid; it may have certain legal complications, 2) what is the reason why the employee breached the conditions of the bond?

If all the mentioned points are very clear, then you may proceed against the employee. Otherwise, it may be a waste of your valuable time and money, and legal complications may increase.