Stuck Without an Experience Letter: How Can I Legally Handle Bond Money Demands?

Hi, I am working in the IT sector. I left my last organization because of some reasons. There was a bond with my previous employer that required me to serve the company for 1.5 years. When I resigned, I could not go to the office, and after resigning, I received an email stating that I needed to pay 1,54,000 INR as bond money. I explained that I am unable to pay such a large amount due to financial barriers. They responded that they wouldn't issue me my experience letter or relieving letter until I paid the bond money. Now, I cannot afford the bond money, and I need my experience letter and relieving letter to submit to my new employer. I have requested my ex-employer several times to issue the letters, but they have denied my requests. I am currently feeling depressed. Please help me figure out what I can do. What legal actions can I take against my ex-employer since bonded labor is a crime in India? Your suggestions in advance are greatly appreciated. Thank you.

First, you need to convey to your new employers that you have signed a bond with your old employers for a specific time period. However, I did not fulfill this time period because I left the company for a great career growth opportunity. Now, the company's policy is that if an employee does not clear the bond, they will not issue any certificates such as an Experience Certificate or Relieving Certificate.

Regards

First and foremost, an unconditional bond cannot be enforced, as bonded labor is illegal. However, if the amount specified is linked to the training provided to you, it can be enforced if the company can prove the quantum spent on training. That being said, I think that the only person who can help you is a good lawyer, who, after reviewing the said bond, will give you the right advice. Also, a lawyer will be the only person who will draft the required reply/notice to your previous employer.

On this forum, we, the members, offer what we deem to be correct without the entire relevant information about your situation.

Regards,
Savio

If you are aware that bonded labor is a crime, then why did you sign the contract for 1.5 years? The bonded labor you are referring to is different from the contract you are mentioning. Do not get confused. If there is a contract that states you shall not leave the company within one year and if this is mutual, irrespective of whether you are given training or not, the contract is valid.

If you need correct and good advice, then one needs to know all the facts, and it is better you consult an advocate in your place as advised by Savio.

Regards,
Sivasankaran

Thank you for your valuable responses. I underwent training for six months with my ex-employer. As per the details of the bond money, the breakdown of the whole amount is as follows:

• Rs. 63,469/- towards 50% of the total compensation paid from the date of joining to date.
• Rs. 68,125/- towards 50% of the total computer time utilized during training at Rs. 250/- per terminal hour.
• Rs. 15,000/- towards recruitment cost.
• Rs. 8,000/- towards training costs.

Please tell me if all these components are valid and if they can demand the same from me based on the training they provided. I need suggestions from all of you once again.

@Muralidhar: Thank you for your reply. I have mentioned the details; please check them once and do reply. Thank you once again. :)

@UvJadeja: Hi, I have tried the best possible way to convince my ex-employer, but all in vain. Now I am afraid that if I tell the same to my new employer, they may terminate me for non-submission of documents. If you have a better idea to convince them, please let me know. Thank you. :)

@Savio: I have mentioned the breakup of the bond amount. Could you please guide me on whether it is valid or not? Please do reply, and thank you for your reply. :)

@T.Sivasankaran: I did not sign the bond for 5 months, but then I received an email from HR stating that if I did not sign the bond, they would not allow me to continue with my training. So, at last, I was compelled to sign the bond. I later came to know that this is not legally valid. Could you please suggest what I should do now? I will be waiting for your reply. Thank you. :)

Regards.

Understanding Fair and Unfair Compensation Claims

What I am providing here is my understanding of what is fair or unfair.

• Rs. 63,469/- towards 50% of total compensation paid from the date of joining to date. This is not valid. They cannot make you refund the salary you have received for services rendered.

• Rs. 68,125/- towards 50% of the total computer time utilized during training at Rs. 250/- per terminal hour. This can be a valid cost on the condition that they can justify the working of Rs. 250 per terminal hour.

• Rs. 15,000/- towards recruitment cost. This is not valid since you have worked there for more than a year anyway. Also, they have to justify the working.

• Rs. 8,000/- towards training costs. This is valid.

In your situation, it would make sense to consult a lawyer to draft a reply as well as to work out a settlement with your previous employer. Litigation is time-consuming, so get a lawyer who will help you avoid that. Also, remember that in the event of future reference checks, the company can mess it up for you. It may be unethical, but it happens.

Your aim from here should be to work out a settlement and leave. If they don't agree, then fight it out.

All the best and regards,

Savio

I agree with Savio. Try to settle. Organizations generally do not accept to settle at a reduced amount as there is a fear that others will also expect this to be reduced.

Try to get a letter from them stating that you would make the payment over a period of one year, and they can mention the same in the relieving order. However, the new company may insist on you getting clearance without any such condition.

Fighting it out at this stage of your career may not be the right option.

Regards,
SIVASANKARAN

@savio: Yes, that breakup was part of the bind when I was forced to sign the bond. I worked there from 13 June '11 to 17 Jan '11.

@Sivasabkaran: They said that I could pay this amount within a year, but only after paying the full amount will they provide me with a relieving and experience letter. The question is whether their demand is legal. Can any employer ask an employee to pay the amount they are demanding from me?

As Savio mentioned, they cannot deduct 50% of the total compensation paid from the date of joining till resigning. No system costs 250 per hour, as it is not feasible.

I have already paid 10,750 INR as a final settlement amount, which they paid me in excess (as informed by my ex-employer).

Savio and Sivasabkaran, I am highly thankful to you for providing your valuable suggestions and giving me your time. Once again, a thousand thanks to both of you. :)

I am eagerly awaiting your response. :)

Unfortunately, you have agreed to pay them as per the breakup, willingly as well, because they gave you the option of signing or leaving the organization; hence, the demand is legal. Too bad that what I said about the legality would hold good only if they had not given the breakup in the agreement.

The best option is to give them periodic post-dated cheques for the total amount and get a letter from them stating that you have handed over responsibilities and that all dues payable have been settled through post-dated cheques. You will get a no dues clearance on realization of the cheques. I think that would suffice for both your ex and current employer.

My sincere advice is "Do Not" attempt to fight it out with your ex-employer over an agreement you've signed. They can always ruin a reference check.

Regards,
Savio

I have gone through the entire conversation and come to the conclusion that this is not such a big issue. The first thing I would like to tell you is that the bond and the amount you mentioned (breakups) are not at all valid or payable. You don't need to worry about this and should consult a good advocate who is dealing with similar cases. Let them study your appointment letter and the bond. They can send a notice to your client and get things done easily.

It's better if you don't inform all these matters to your new employer, as it may create a wrong impression of you. I hope this will be solved soon without any tension for both.

Regards

Thanks a lot once again for spending your valuable time in giving a reply. I am thankful to you. Is there any way to get my experience letter and relieving letter without paying bond money? 

Thanks for replying. Could you suggest how I can get my experience and relieving letter without paying bond money and what I need to do for that? I will wait for your reply. Thanks in advance. 

As they are not listening and moreover insisting on bond money, the best way to get your experience letter and relieving letter is to send a legal notice to them. As I told you in my earlier interaction, what they are asking for is not valid, and moreover, it's illegal. Consult a good advocate who is dealing with similar cases and ask him to send a letter.

A Few Things I Would Like to Know

1. Is it a registered Indian company?
2. Are you a contract employee of them?
3. How many months did you work in this organization?
4. What is your regular attendance status?

Please let me know this and also send me your company details. Let me check from my side so I can advise you more on this. Also, if possible, send me the scanned copy of your appointment letter and bond agreement. You can email to [Email Removed For Privacy Reasons] and cc [Email Removed For Privacy Reasons].

Hi Shikha,

Can you tell how much money you paid in the final settlement? I am facing the same problem.