Leaving a Job Before Bond Ends: Do I Need to Provide an Affidavit Now?

Hi All, I need some advice. I had signed a bond with my company for 1.5 years but had to leave the job before the end of the contract period. I was with this company for 4 years before I left it due to certain reasons which are listed below: a) No growth in 4 years which was very frustrating despite the fact that I was the best performer. b) Medical reasons. I tried to resign but the company did not accept my resignation as I had not served the complete bond period. After a few months of leaving the company, I joined another company at a better position. Now my previous company is asking me to give an affidavit stating that I am currently not working anywhere. There were at least 15 more people who left the organization without serving the bond period and no action was taken against them. Please advise if I still have to give the affidavit to the company? Can they take any legal action? The bond period is now over. Please help.

Dear Arora,

Please find a similar question and answer that I found on www.vakilno1.com. It may be of use to you:

[b]Question: I wish to know the consequences of breach of employment bond given by an employee:
On the employee himself,
On the company that employs him subsequently.
If the bond states that the employees can be used for criminal breach of trust on breach of the bond, how enforceable is this clause?

A. Regarding the breach of the employment bond given by an employee in this regard, it is advised that if an employee has signed a bond after receiving specialized training from the company, then a civil case can be filed against him for the recovery of the amount mentioned in the bond if there is any breach. As for the company that employs him subsequently, there is no liability on the company. Breach of the bond is not a criminal breach of trust; it has civil consequences that also have to be proved in the Court of Law. In no way can it be termed as a criminal breach of trust.

[Login to view]

Dear Arorad,

The language and clauses in the bond you signed are of consequence - i.e., what did they make you sign?

Normally, various court case laws have indicated that in most cases, the company has lost. Most exceptions are when the company has 'specially' spent time and effort (money) on you (say, overseas travel, training, etc.). In such cases, the company has the right to claim the money back through a legal case.

By the parlance of justice, no company can make employees sign bonds of employment. The legal framework has endorsed that the relationship between an employee and an employer is no longer a slave-master relationship. Those days are gone.

Companies who have fought legal cases know this but get bonds signed to retain employees by indirect threatening. Most bonds are illegal. Even by case laws, governments and PSUs have also lost cases on this subject.

If it is a routine service bond, you needn't worry; nothing will happen. But if they have spent money/special efforts on you in reference to any specific clause in the bond, they have the right to recover the money from you, legally.

Also, there is no criminal case/breach unless an employee has been framed in case of theft, violence, or money fraud in most cases. A regular bond is admissible as a civil case.

Do not sign any affidavit at all. You are no longer with them, and they hold no right to make you sign anywhere. With whatever information you have provided in your query, I advise that you refuse signing anywhere and keep silent.

Rahul

09968270580

Dear Members,

I am really thankful to all the members who replied to my query. Rahul, I agree with you that I should not sign/submit any legal document to the company as I am no longer under the bond period. However, the trouble is that they are neither accepting my resignation nor terminating me. They have waived off the bond for some of the people who traveled with me overseas and they have accepted the resignations of 10 more people who are now working in different companies. They also terminated a couple of people who were absconding. I am the only one they are harassing and asking for an affidavit to accept my resignation.

Keeping all this in mind, please suggest what stand I can take to protect myself.

Regards

You should send your resignation letter via registered AD post to the company and keep the AD card and post office receipt as proof of having sent the resignation. No one can deny having received it, and legally, this is sufficient to protect you regarding your resignation from the company.

Also, why should they be harassing you when they have accepted others' resignations is not clear to me.

Rahul

Hi Rahul,

Thank you very much for your advice. My cousin, who works in the same company, had signed my bond as a surety, and that is probably why they are harassing me. I also wanted to know if they can ask my cousin (the surety) to pay the bond amount or cause any trouble for him.

What action can I take if they ask me to pay the bond amount?

Regards

Your ex-employer is not in a strong legal position. Don't give or sign any statement. Section 27 of the Indian Contract Act, 1872, provides that agreements restraining a person from exercising a lawful business, trade, or profession are, to that extent, void. Any clause that prohibits employees from working with competitors after the cessation of current employment has been repeatedly struck down by courts. Restrictive clauses during the term of employment have been upheld in a few cases.

Hi, I would like to know if my previous company can ask my cousin, who signed the bond as a surety, to pay the bond amount as he works in the same company. What should I do in case they send me any legal notice? What should be my approach with the HR of the company on this issue? Thanks

Seek advice from a legal attorney who can verify the antecedents of your case and represent your side.

Surya

Hi Arorad,

Yes, they can ask your cousin to cough up the bond amount since he stood surety. He can be harassed, and his option is also to leave the company. As I had indicated, in case you have caused the company to spend money and special efforts on you, they can ask you to pay up legally. But, on generic employment contract terms, a 'service bond' is null and void under the law. Companies have legally lost cases of 'employee bonds'. This means that a bond that is meant to bind an employee to the job is illegal in nature. The law only recognizes the appointment letter that is fair and equitable on both sides.

I cannot exactly comment on your bond since I have not read its contents and purpose. But generally, I have advised.

Rahul
09968270580

Legal Implications of Breaching a Service Bond

Agreement in restraint of trade or profession is void vide Section 27 of the Contract Act. Moreover, it is a violation of Article 19 of our Constitution. In the event of a breach of a service bond, the employer can recover only the actual reasonable loss suffered by it. Further, they can file only a civil suit for recovery of the loss, and there can be no criminal case against an employee for breach of a service bond unless he has committed any forgery.

Termination of Employment Contract

A contract of employment may be terminated at any time by either side in accordance with the terms of employment. However, proper documentary evidence is to be preserved for issuing the termination notice to defend/fight yourself before the court.

What happens if the situation is reversed between the employee and the employer? My question is, will the employer be liable for the remaining salary of the bonded period if the bonded contract is terminated by the employer?

Kindly help me.

My wife has joined the company and signed the bond for two years. After the completion of 22 months, we gave our resignation, but the company is pressuring us for bond payment. If they pursue legal action, would it be considered a crime on our end? They have already provided us with a resignation letter with signatures, yet they continue to harass us.

Please reply.