Is My Employer's Service Bond Legal? Seeking Advice on Breaking It Without Legal Trouble

Dear all,

Greetings to all of you. I need guidance from you all regarding my issue.

I had joined a manufacturing company a few months back. During the interview or at the time of issuing the appointment letter, I was not told that I have to sign any service bond in the future. After a few months of joining the company, my employer asked me to sign a service bond for a heavy amount (approximately Indian Rs. 14 lakhs), which is much more than my annual CTC. When I refused to sign, they asked me to leave the job, and hence unwillingly and forcefully I had to sign a bond. However, it was not signed in front of a notary or in court. All these things happened within my probation period.

Now, because of some personal reasons, I had to break it and come to my native place. I have just completed my probation period at the time of leaving the job but have not yet been issued confirmation. My employer is asking me to pay their expenses, or they will approach the court for legal actions.

I would like to know if it is legally right? Can my employer really take any legal action? What should be my response to it? Please guide.

Thanks in advance,

Nishant

Dear Nishant,

I have written earlier regarding this query raised by someone, and all our friends from Cite HR agreed on the same. This type of bond does not have any legal authenticity. You have to follow the terms of the appointment letter for one month or three months' notice. If it is stated in the appointment letter, it should be followed.

Don't worry, chill out. Legally, they cannot take anything from you.

Thanks

Dear sir,

Many thanks for your prompt advice. I had referred a few cases before I posted my query. Please check the below-mentioned query of user "money 24" and the answer given by Mr. Madhu T. K. (board Moderator). My case is somewhat similar; I had attended an overseas training (which was totally useless and arranged solely for the purpose of a training bond) and now the company is asking for training expenses, which are very high compared to the standards in European countries.

You are requested to refer to the comments mentioned below and please let me know your opinion again.

Many thanks,
Nishant

[Employment Bond]
Hi, can you please tell me if employment bonds are legal in India? As far as I know, it's illegal, and the person can sue the company. How true is this? Please provide the correct details. Email me at [link removed for privacy].

Regards

Money_24
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Board Moderator
Join Date: Sep 2007
Location: Kannur
Posts: 1,314
Blog Entries: 11

Employment bonds are illegal. However, this does not mean that an employee who has undergone training at the employer's expense and gained knowledge should leave the company before a reasonable time without providing valuable service in return. If an employee does so, the employer's interest in recovering the training costs will be protected.

Regards,

Madhu T. K.

Dear Sir,

I have the same problem. I have received a good job offer just after completing training overseas. The company had me sign a 2-year bond with an amount of 3.5 lakh. However, I did not sign on stamp paper. My colleague signed it for me. He wrote everything on my behalf and even forged my signature. The front page was the only one on stamp paper, and it did not mention any conditions. It only stated a "Tripartite agreement" between me, my surety, and the company. Additionally, my colleague wrote his name and address as the surety.

I do not want to miss out on this job opportunity. Please help me.

Thank you.