Feeling Trapped by a Forced Service Contract: Can I Challenge This Legally?

Dear All, I have just joined a company 15 days ago. They informed me that I would have to sign a Service Contract for 2 years and that I cannot join a competitor during that period.

After two days of joining, they presented a backdated 50 rupees stamp paper and made me sign a contract stating that I cannot leave the company on any grounds except defined medical grounds.

If I leave during that period, I will have to pay two years of CTC. I am in operations and don't require any kind of training. Additionally, the stamp paper used was dated 20 days before my date of joining. The profile they promised has not been provided, and the workload has increased significantly due to this signing. I have been made to work from 8 AM to 12 PM.

My Concerns and Queries

My query is that in this clause, only the company has the right to terminate, and I don't have the right to resign. I was not offered anything in return for being faithful to the company. Furthermore, if I resign due to work pressure and later join another job, would I be under litigation in the future? Can a normal citizen of India challenge and win against these big multinationals? Please help and advise.

Regards

Nowadays, a lot of queries are coming in on the above subject. I am unable to understand how somebody can get your signature on a paper forcefully without your acceptance. Can you sign an asset transfer paper to somebody? No, no. Then how have you signed the agreement paper?

At the time of joining, everything seemed rosy, and you accepted everything and signed. How can you sign a paper without taking the time to read and understand, especially a paper where your personal interests and rights are affected?

Employers are conducting background verifications and various inquiries, so why aren't you doing the same? It is surprising that within just 15 days, you are feeling uncomfortable and considering leaving.

The agreement is very vague and goes against the interests of the employees. It would be better to consult with a leading advocate well-versed in labor laws and proceed. I hope that at least you don't repeat a similar mistake in your future assignments.

Regards,
Kamesh

Sub-Bonds - Service Contract

When an employer offers a post with certain terms and conditions, and you have accepted it for certain considerations (salary/package) in writing under your signature, a contract has come into existence within the meaning of Sec. 2(h) of the Indian Contract Act, 1872. Such a contract is binding on both parties and is enforceable under Sec. 10 of the said Act. However, not every contract can be a valid contract. A contract obtained under coercion or misrepresentation will be void as it suffers from the lack of an essential ingredient to validate a contract under the Act, namely 'consensus ad idem,' meaning the meeting of minds. In this case, there does not appear to be a meeting of minds.

However, there cannot be any contract preventing you from joining any other company after you resign from the present company, as it is opposed to Sec. 27 of the Indian Contract Act. Therefore, you have every right to resign. But if you want to leave the service, you have to pay two years CTC to the company. It does not appear to be notice pay but in the nature of summary damages, which appears to be punitive. The courts have the right to examine the adequacy of any such clause. Anyhow, try to settle the issue amicably with HR on the issue of notice pay.

Regards,
B. Saikumar
HR & Labour Law Consultant
Chipinbiz Consultancy Pvt. Ltd
Mumbai

Thank you, Mr. Kamesh and Mr. Sai. Please understand that after I joined the company, I did not have a choice to say no as I did not have any other job in hand. The stamp paper that they made me sign was given to me after two days of employment, and neither did I know that I would be given such a tedious and demanding job.

Query Regarding Employment Contract

The only query I have is: as I don't have any training expenditure, can the company sue me since my appointment letter states a one-month notice period, yet the company is not providing me with anything in return for this fixed tenure? Can the company challenge two contradictory documents (appointment letter and stamp paper) of the same date with different clauses in court? Please advise me on how to come out of this situation.

Regards