Stuck in a Training Limbo: How to Handle an Indemnity Bond Dilemma in a Multinational Company?

Employment Dilemma in a Multinational Company

I am employed in a multinational company, and upon joining, they had us sign an indemnity bond worth 5.5 million rupees. The terms of the bond were that the company would try to arrange training for two years (it may be more or less), and after certification (indicating complete training), I would have to work for an additional three years.

It has been two and a half years, and the training is still incomplete and unlikely to be finished in the next few years. During this time, we are mostly idle in the office, meaning we are doing almost nothing. This situation is quite dire for me as I was unaware of this before signing the agreement. While the company is attempting to complete our training, they are mostly failing to do so. Additionally, my pay has not been updated (currently very low compared to my colleagues in the same job) as they claim I am non-productive at the moment.

The dilemma I face is that I cannot be productive before completing my training, and on the other side, they are failing to arrange adequate training for us.

Thank you.

Do you know of any situation where an employee broke the indemnity bond and still remained safe? I do not want to personally break this indemnity bond, but on the other hand, I might have to jeopardize my career. Please provide legal advice; it would be greatly appreciated. The link is not working.

Thanks,
Muddasir Masood

Which nation does this firm belong to, and where was the bond signed? The laws of the land will remain valid. This firm seems to be either an NBFC or software. Sectoral laws would remain a point of reference. I am mailing this to a corporate legal expert in India. Let's get connected to someone from the nation where you signed your bond.

It would be necessary for you to upload the document/bond to analyze its legality. You can block certain personal information/company name, etc., in case you are not comfortable disclosing it on the forum.

Without seeing your bond, it is difficult to say. In addition, most of the members here are from India, and the laws here would differ from Pakistan. However, our laws are derived from British law and share a common heritage, so chances are that contracts and torts will be the same as ours. They have promised you training and taken an indemnity bond to defray the cost of the same. However, the training was not provided. So, since the condition, which is the central consideration for the contract, is not fulfilled, the contract and bond are void ab initio. Meaning you are not bound by it. You can resign and leave. I doubt if any court of law will force the employee to follow the terms of a bond when the employer has not done their part.

I agree with the general observations of Saswat, as given above. This is a one-sided bond, unfair, and oppressive; moreover, the company has not even fulfilled its side of the bargain. The prospective employees are forced to sign such bonds under financial duress and not out of their free will. The penalties are not commensurate with the benefits offered. In my opinion, such bonds will not stand the scrutiny of the courts of any developed, democratic country.

Warm regards.

Thanks for your valuable comments.

@ Z. N. Hans and (Cite Contribution), I am attaching this agreement here for your reference and support. It will be greatly appreciated. Thanks for your comments too.

@ Raj Kumar and Saswat: They sent me for the training, but the bond is tied to certification, and this certification requires extensive training to be done by me. However, my employer has failed to provide it in due course of time (two years as mentioned in the bond, but they included the term "be it more or less" to keep them safe). It's not in the mid-way. They told us that we would be extensively and continuously deployed onto many projects to learn before getting certification, but they hadn't done so. We received one training after sitting idle for six months, and then another onsite training, which is project-based, was done after almost one year. We don't know how long we may be waiting for the next project. Six months have passed up to now.

I have also attached the agreement for your reference and will be looking for your kind advice on it. From my perception, this bond is greatly biased on the employer's side. We hadn't noticed this at the time of signing, and moreover, we aren't in a position to negotiate. It's either sign or leave.

Regards,
Muddasir Masood.

I am still waiting for your valuable comments! Please advise me on how to get rid of this agreement?

Regards,
Muddasir Masood.

I have gone through the scanned files. You will need to take the help of a lawyer who knows Pakistani laws regarding the actual method to be followed.

Understanding the Legal Framework

Assuming Pakistani laws are similar to Indian laws since both countries adopted British jurisprudence, the following points are important:

- Rs. 5.5 million is high. The actual training cost cannot be that much.
- The period of 2 years of training and 3 years of work afterward is too long.
- If the company failed to provide proper training and delayed the same for whatever reason, the bond will get invalidated. You should be able to give notice of termination.
- The agreement can also be invalidated as being given without the application of a free mind due to undue influence and false promises (of training and work experience).

Employee Rights and Labor Protection

Generally, labor courts will not allow a company to bind an employee to work under circumstances that affect the career and future earning potential of the employee. These principles of jurisprudence are the basics of labor protection law, as the employee is always working to enhance their future earnings, and the employee rarely has bargaining power.

Next Steps

You need to find another job quickly. Thereafter, give notice of termination of the bond and resignation. But have a lawyer prepare a strong termination notice. If you have given a check to them, ask the bank to cancel that check (stop payment order).

Legal Implications of Indemnity Bonds in India

After going through the indemnity bond and considering that the Contract Act is similar to what we have here in India, there are judgments passed by our Supreme Court stating that a one-sided unreasonable contract or bond like this is not sustainable and is in violation of the Contract Act. The bond would be illegal under Indian laws. The bonded duration of work and the liquidated damages are excessive. On the other hand, the company cannot simply recover the money from you just because it is accepted under the bond; the company needs to justify how and why it is entitled to the said amount before the court.

Furthermore, the contract or bond is completely one-sided, ambiguous, and lacks reciprocal clauses towards specific performance of the contract. You will need to research such judgments. I am sure there are many similar cases, and then make an informed decision after consulting a lawyer at your location.

I fully agree with the opinion given by the Employment Lawyer. In fact, I have held this view earlier, as reflected in my previous post. Such one-sided agreements (bonds), with no quid-pro-quo, are purely intimidatory in nature and would not find favor in any court of justice. Moreover, in these days of "hire and fire," as conscientious HR professionals, we should discourage such bonds that are exploitative in nature.

Warm regards.

Thank you so much for your valuable comments. Let me try to explain the complete story of my agreement and work thereafter with this company.

Agreement and Initial Expectations

We had been told that we needed to work for the company for a period of three years after receiving training, which we hadn't initially been concerned about as they promised us that the training would provide great development and full international exposure. They assured us that we would be continuously working on different projects that would benefit both the company and us. At the time of signing this agreement, we raised concerns about the excessive amount mentioned in the contract and the clause stating "company reserves the right to terminate training, and any losses incurred in this case must be compensated by us." However, the company assured us that this was just a formality required for approval from higher management.

Training and Role Assignment

After nine months (which was essentially idle time) of signing the agreement, we were sent for training, the cost of which, as they informed us, was around 21,000 euros. Four months after this training, I was appointed to a different role as "HSE Manager," despite my lack of experience in this field. This assignment was not part of my initial agreement or job description. They could have hired an expatriate for this role but chose me to save on costs. Despite my lack of experience, I diligently worked and successfully completed the task. Five months after completing the HSE Manager role, we were sent to a project that lasted only two weeks. Now, after six months have passed, we are once again idle, waiting for a new project to come along.

Current Concerns and Future Opportunities

The issue lies in the time spent being idle between training and projects, which has significantly hindered my potential development that I could have achieved even in an average opportunity. To worsen matters, when I expressed this concern to my manager, he dismissed it as being overly demanding and unreasonable. He has even become increasingly pressuring and egotistical.

I now have a new opportunity that I am eager to pursue, and I am concerned about the implications of my current agreement.

Thank you again for your comments. I have provided the above situation to give you a better understanding for your advice.

I think my comments still hold true after your clarification. I would suggest you also make the matter clear to your prospective employer and take their consent. It should not be that you are terminated later on account of having suppressed details of this incident.

I think you can safely break the bond. Have the bank put a stop payment on your cheque given to the company. Give a legal notice to the company. Speak to a lawyer first as this could get ugly.

I haven't heard about any training that costs Pakistan Rupees 5,500,000 covered in 2 years. I don't think the company might have hired you alone for this kind of training. Let me know if anyone else is getting trained along with you.

Training Duration and Bond Terms

The point to be noted is that, as per your bond, training is scheduled for 2 years or less, but it has crossed its scheduled duration. By the end of the two years post-training, you were supposed to be periodically assessed and evaluated while being given tasks to perform. If this is not happening, as per your bond, you do have the right to initiate primary talks with your HR to understand the legal issues from the company's point of view. If you find something fishy, you must consult a legal consultant (lawyer).

Employee Rights and Legal Consultation

Nothing can be one-sided, and companies have no right to take undue advantage of their employees by signing such bonds. Every problem has a solution. All you need is to perceive it in the right sense by applying logic and consulting legal experts before making any decisions.

With profound regards,

Abdul Khadir, that is true. We are 25 people signing the same bond, and most of them are really unhappy about this. It is also true that two years have passed now, and my training isn't finished yet. But if you see in the agreement, the company has used the term "be it more or less" to keep them safe.

As advised by Raj Kumar Hansdah, this bond is junk and carries no legal tender. Write to your management to free you of the bond as they fail to provide you with training. You will get NO response. You may break the terms of the bond after a reasonable period of time as you see fit.

Incidentally, many bonds are just junk. They are mostly relevant to the extent that the IP of the company is concerned and, in some cases, joining the competition. For the rest, bonds are just a scarecrow. Have fun and stop worrying.

Well, the term, be it more or less, is to be seen in the light of the entire document. It is not a condition that can be used to make the employee a bonded slave (albeit a paid one) of the company. Assuming Pakistani courts follow the same jurisprudence as Indian courts, it is most likely that the courts will interpret the line in a very narrow manner: if the training extends due to lower understanding levels, the period is prolonged. Conversely, if the course completes earlier, the period shortens, and the next 3-year period commences immediately after.

However, such extensions should be for conditions beyond the company's control and within a reasonable timeframe. Inability to secure projects or complete certifications should not justify extending the training period as it should have been factored into the initial planning, showcasing the company's domain expertise. In this instance, reasonableness appears to have long expired.

Thank you so much for the valuable comments. They were much needed and have been understood the most. Being fair and honest, I have talked to my manager and discussed with him the complete situation about my past and present. I requested him to accept my resignation and terminate the bond in both of our favors. He has asked for a one-week time. I am praying that everything goes fine. Please pray for me. I am trying to bridge between slavery and freedom, and that is only by doing the right things with a pure conscience.

Please pray for me.

Regards, Muddasir Masood.

I suggest keeping this forum informed of the developments next week when your manager is expected to arrive at a decision—it could be a learning opportunity for many members. However, I also suggest you begin contacting a suitable lawyer to prepare for any worst-case scenario that might emerge. As the saying goes: work towards getting the best, but also prepare for the worst.

If your manager's decision is negative, then you may not have a lot of time to put the alternate plans of action into place. In case your manager responds positively, then you wouldn't be losing much—except some time and effort.

All the best.

Regards,
TS

Dear All,

Thanks for your valuable comments once again. There is further progress in this case. As I have previously mentioned, I resigned from that company six months ago. Below is a copy of my resignation letter to my superior:

Resignation Letter

Dear Sir,

I am writing to inform you that I am resigning from my position as an Electrical Commissioning and Fact-finding Engineer. I have experienced many ups and downs during my time here, all with your support and mentorship. I am grateful for that. I have decided it's time to move on as we are facing serious project delays causing losses for both of us, posing a threat to my career progression. Besides this, I have appreciated every opportunity given and have worked responsibly towards our common goals. I wish you and the company great fortune and will be available in the future as needed.

Please note that I have left all company belongings in my cabinet for you to collect. Once again, thank you for having me as part of your team.

Sincerely,
Muddasir Masood

Two days ago, I received a notice from the company demanding 5.5 million PKR within 14 days as compensation for breaching my agreement. Failure to comply will result in legal action against me. Before my resignation, I had multiple discussions with my manager, and he assured me that I could leave without facing legal consequences, as I had the right to progress in my career. The company was supposed to deduct the costs from my dues but not issue me an experience certificate, as agreed upon.

I seek your valuable advice on how to proceed in this matter. Thank you in anticipation.

Sincerely,
Muddasir Masood

Legal Guidance on Contractual Obligations

You need to get a lawyer to help you respond to this. Ensure you dwell on the fact of undue delay in the project and therefore your contract period, which invalidates the contract. You need knowledge of Pakistani tort jurisprudence, which I am not well-versed with. Additionally, a contract that has the unintended result of career damage is not enforceable. For that, refer to the Contract Act (Pakistan and India have the same Contract Act of 1881), which refers to offer and acceptance, with both parties intending the same thing. Here, what you intended and agreed to is different from what has happened, so the contract is now invalid.

Having read that notice, my mother, already a patient with diabetes, has worsened and been hospitalized. According to the doctors, a little delay would have led her into a coma. The language of the notice is very strong and quite threatening (I have attached the notice here). I couldn't believe a company of high repute could go such a mean way. I am trying to arrange information to respond to this notice.

Regards.

Unfair Bond Amount and Training Concerns

The very fact that the bond amount is arbitrary and exorbitant makes it unfair. Moreover, whether you were actually given any training or what would be its fair worth also needs to be taken into consideration. The best solution at this stage would be to consult a good lawyer.

Warm regards.