Feeling Trapped by an Employment Bond: Can I Leave Without Paying the Penalty?

Hello Seniors, I am not an HR professional, but I find myself in a situation where I need guidance. I am a Chartered Accountant. When I joined my current job, I had to sign a Rs 100 bond for two years. The agreement stated:

"I hereby agree to work with xxx co pvt ltd. for a period of two years, failing which I will pay Rs 3 Lakhs to the company, and indemnify them against any damages resulting from my negligence."

The surety sign is missing.

My work does not involve IT, which I am trained in. It primarily revolves around finance, an area in which I am fully qualified and need no additional training. It has been a year since I started, and one more year remains on the bond. However, I am now being asked to handle responsibilities that were previously shared by two employees for less than one salary. This raises the question of the validity of the bond. Am I obligated to stay even if I have valid reasons for resignation, such as undue pressure? Can the company refuse to release me from the bond?

Thank you for your assistance in this matter.

You might have viewed a heated group discussion on a popular English news channel based in Chennai two years ago. If I remember correctly, two viewpoints—one in favor and the other against—were vehemently presented by the panelists, the majority of whom were top HR professionals. Personally, I support the practice of companies recruiting freshers for core activities, providing necessary training at a considerable investment of time and money, and then placing them in suitable positions. However, the practice of requiring bonds from individuals who are well-qualified in support roles like yours at the time of entry, and using pressure tactics solely for this reason, is unethical and deplorable.

You may have signed such a bond with full awareness. Therefore, it is advisable to develop a thicker skin and remain impervious to any pressure during the remaining period, and then consider leaving. Alternatively, if you are brave enough, submit your resignation letter detailing your reasons and depart without waiting for any response. Nonetheless, it is recommended to seek advice from an experienced lawyer specializing in employment matters beforehand.

Here are my views, which differ from yours. With due respect to you and your knowledge, I submit the following points briefly due to time constraints:

• It is a violation of fundamental rights as given by our Constitution.

• The Supreme Court has stated that no employee can be forcefully employed against their will just because they signed a contract with their employer.

• The Indian Contract Act states that if a contract is one-sided, it is null and void. Also, if it is enforced and harms any party, it violates the principle of natural justice.

• IPC Section 368 says if any person or institution holds back any document or uses any legal document or threatens any legal suit or action and thus forces a person to perform any act against their will or wish, it is illegal or wrong.

• A bond can be executed only when a company incurs any amount on training the employee on their personal grooming and enhancement, not just on their better performance.

Regards.