Understanding Service Bonds, Employment Contracts, and Legal Implications for Employees

Hi, I am a new member of this group, and I really enjoy being part of it.

Can anyone tell me about the legality of service/employment bonds that some companies insist on executing at the time of joining? I would like to know the legality of such bonds in the following scenarios:

1. When a person agrees to a bond for 2-3 years and there is no training or any intellectual property being transferred to the employee during the tenure.
2. When the bond is signed by a well-experienced person, for example, someone with over 11 years of experience.
3. What legal measures can the organization enforce when an employee leaves without honoring the bond period?
4. What legal options does an employee have if they are terminated during the bond period?

I look forward to your valued inputs. Thank you.

Hi Sherine,

Bonds/contracts hold no value as the Government of India has already abolished the Bonded Labour Act. These are not legally enforceable to the best of my knowledge. Wipro makes people sign bonds, and these same people break them. Let me update myself on the issue, and I will get back to you on it.

Regards,
Scarecrow

Hi Scarecrow,

I am also keen to know about these details. Looking forward to your help.

Shradha

Hi,

Check out the following link which appeared in today's Economic Times: "Bond or no bond; you are a free bird." It is very informative.

URL: [http://economictimes.indiatimes.com/articleshow/1196073.cms](http://economictimes.indiatimes.com/articleshow/1196073.cms)

Hi,

I am working in a Malaysian company in the IT department. I signed a two-year bond with the company which states that if I terminate my employment before 365 days, I will have to pay 6 months' salary, flight tickets, visa fees, and other expenses incurred by the company. If I terminate after 365 days but before 2 years, then I will have to pay 3 months' salary along with the above costs. I am originally from India.

I have already completed 1 year of service, but the company has not given me my bonus or any salary increment. The bonus is supposed to be 10% of my salary based on performance. However, the company claims that my performance is not up to the mark. Additionally, I am facing family issues as my mother is unwell, and I have provided a medical certificate for this. Despite this, the company is still demanding the bond money. I gave them a 3-month notice after discussing with my manager, who verbally assured me that he would waive off the bond if I improved the processes. I worked hard and completed my tasks as requested. Now, my manager has stated that the decision lies with HR, and he is no longer in charge. I have heard that he is leaving, and the new Head of Department is also uncooperative. Several Indian employees have already left due to the poor treatment by the company, and some have not paid the bond amount. I could do the same, but I wish to leave peacefully.

Can someone please advise me on how to handle this situation? I submitted my resignation in April, with my last day planned for July, but the company is unwilling to waive the bond. Due to the high bond amount, I have rescinded my resignation for now.

One important note is that the bond clause is mentioned in the appointment letter and not in any separate agreements.

Regards,

Vicky

For more information, visit https://www.citehr.com/9912-service-...#ixzz0oM6OW0Hz

Dear Madam
Damages for Breach of Service contract.
A contract for service is arising under the Indian Contract Act, 1872. As per sec. 73 of the said Act is provided as under:
“Sec. 73. Compensation for loss or damage caused by breach of contract –
When a contract has been broken, the party who suffers by such breach is entitled to receive, from the party who has broken the contract, compensation for any loss or damage caused to him thereby, which naturally arose in the usual course of things from such breach, or which the parties knew, when they made the contract, to be likely to result from the breach of it.
Such compensation is not to be given for any remote and indirect loss or damage sustained by reason of the breach.
Compensation for failure to discharge obligation resembling those created by contract - When an obligation resembling those created by contract has been incurred and has not been discharged, any person injured by the failure to discharge it is entitled t