Dear All,
Recently, I received an interesting judicial pronouncement regarding breach of bond, according to which such agreements are not against public policy and are not void. Please check the attachment. Furthermore, I would like to share the following views with you:
Whether a particular service contract is valid or not depends entirely on the terms and conditions contained therein, as well as the manner in which it is drafted, subject to various provisions of the law.
For example, if an agreement for training includes a provision that the employee must serve the company for 2 years after completing training abroad, and in the event they leave before the specified period, they are liable to pay damages to the employer, equivalent to 6 months' salary, it is not illegal or void.
In various judicial reviews, courts have held that such restrictions are not considered a 'restraint in trade,' therefore not violating sections 23/27 of the Contract Act or the fundamental right under Article 19. However, drafting must be done carefully, and restrictions must not extend to the post-employment period; they must be genuine to recover the cost of training.
An employee is free to leave, but they must compensate the company. In my opinion, such an employee cannot have it both ways, i.e., benefit from the training, join a competitor, and abandon their previous employer in the midst of business operations. This behavior is entirely immoral, unethical, and unprofessional. If they choose to leave, they can do so but should pay for the training costs.
Please review the attached article and judicial pronouncement.
SUBMITTED FOR YOUR KIND VIEWS.
Regards,
Amit Kishore Singh
Recently, I received an interesting judicial pronouncement regarding breach of bond, according to which such agreements are not against public policy and are not void. Please check the attachment. Furthermore, I would like to share the following views with you:
Whether a particular service contract is valid or not depends entirely on the terms and conditions contained therein, as well as the manner in which it is drafted, subject to various provisions of the law.
For example, if an agreement for training includes a provision that the employee must serve the company for 2 years after completing training abroad, and in the event they leave before the specified period, they are liable to pay damages to the employer, equivalent to 6 months' salary, it is not illegal or void.
In various judicial reviews, courts have held that such restrictions are not considered a 'restraint in trade,' therefore not violating sections 23/27 of the Contract Act or the fundamental right under Article 19. However, drafting must be done carefully, and restrictions must not extend to the post-employment period; they must be genuine to recover the cost of training.
An employee is free to leave, but they must compensate the company. In my opinion, such an employee cannot have it both ways, i.e., benefit from the training, join a competitor, and abandon their previous employer in the midst of business operations. This behavior is entirely immoral, unethical, and unprofessional. If they choose to leave, they can do so but should pay for the training costs.
Please review the attached article and judicial pronouncement.
SUBMITTED FOR YOUR KIND VIEWS.
Regards,
Amit Kishore Singh
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