Facing Bond Penalty and Document Withholding: How to Handle HR Threats When Switching Jobs?

The Scenario is as follows:

• When I joined the organization, they had us sign a bond for 2 years, stating that if we leave before that time, we would need to pay them a penalty of 1 lakh Rs.

• I have now received a job offer from another organization that provides better opportunities.

• My current organization is threatening me to pay the bond. I have read all posts on this site, and they indicate that the bond is not valid according to Indian laws. Therefore, I do not intend to pay it. Is this acceptable for me to communicate to HR?

• Additionally, I need to provide the "Experience Letter" and "Relieving Letter" to the new organization promptly.

• Can my current organization withhold my Experience Certificate and the Relieving Letter? It appears they may threaten to do so. If they do, what should be my response? Kindly advise me on a solution for this situation.

• The notice period required is 2 months, but I can only serve 1 month due to starting at the new organization.

Let me get it straight... you do not want to honor the bond you signed, you do not want to pay the damages, you do not want to serve the notice period, and you do not want to pay the notice period. But you, on the other hand, need experience and a relieving certificate.

Seems like a win-win situation (you did not mention why you signed a bond = must be some training). One thing I'd like to add... if you come out of the situation without sweat (tension/legal fight) or blood (money), then I should say we are living in the best possible world, and the employer is someone who is meant to be kicked around.

Anyway, my advice is to negotiate with your present employer to waive the bond and also negotiate with your future employer to extend the date of joining so that you may hand over properly.

First of all, thanks for replying and providing answers to your queries/comments:

1. The bond was stated for any training if provided. I was given just the general technical training along with the rest of the 200 trainees. No other special training was provided.

2. Many individuals have left the organization, some of whom were even given additional paid trainings apart from the general ones, which were paid. They did not pay even a single rupee towards the bond.

3. I am willing to serve a one-month notice period out of the two months required and am prepared to pay the salary to the company for the second month.

4. I believe the experience and relieving certificate are obligations of the company (this is what I am inquiring about), not something overly significant that I am expecting from the company.

5. I have been on the bench for the past year with no significant work assigned to me, so this employer must be held accountable, as you mentioned.

Thank you.

Dear Varun (apologies if I am wrong), you completely misunderstood the "kick around" thing. Annoyingly, but if I were the HRM of your organization, I would support the employer. Now, let's address each point one by one:

1. A training is a training, whatever the content is. When you sign a bond, it is as significant as your appointment letter.

2. If many have left without paying, this firm may be on the verge of closure, I suppose.

3. Your present situation is up to you, but the firm plays a crucial role and may decide at its discretion. Believe me, they are also responsible for many people's bread and butter.

4. What if they issue you an absconding letter through registered post?

5. How can you now, at the time of leaving, realize that the money you received was for sitting idle?

I hope that, as stated in the earlier post, you will try to resolve things in the best interest of your current employer.

Regards.

Let me be clear and straight: you can't leave the present organization before the period as per the bond, or you need to pay the amount mentioned in the bond. They can even file a lawsuit against you as they have proof that you signed and agreed to the terms and conditions of working. Once you pay, you will receive all the necessary documents such as experience certificates and a relieving letter.

For example, if you got a job in WIPRO and signed a bond for 2 years, and after 3 months of joining, you receive an offer from Infosys or vice versa, do you expect to be relieved easily? Just think before you take any action. It's all about your career and future. Remember, money can be earned in a year as well.

"To earn a name will take years, but to ruin it will take a second."

I would advise you to please abide by the bond that you signed.

Kind regards,
Regards

To both the respected people who commented above: Please explain to me why I should pay the bond as you mentioned, considering the points below:

As per Indian Laws:

The validity/enforceability of the employment bond can be challenged on the ground that it restrains the lawful exercise of trade, profession, or business. As per Section 27 of the Contract Act, 1872, any agreement in restraint of trade or profession is void. Therefore, any terms and conditions of the agreement which directly or indirectly either compel the employee to serve the employer or restrict them from joining a competitor or another employer are not valid under the law.

The employee, by signing a contract of employment, does not sign a bond of slavery, and therefore, the employee always has the right to resign from the employment even if they have agreed to serve the employer for a specific time period.

In India, Bond is Illegal as Follows:

As per the Indian Statute, the bonded labor system was long abolished, and no bond can force any person to work against the employee's wishes.

Article 19 of the Indian Constitution talks of fundamental rights; as per Article 19 of the Constitution, the right to work is a fundamental right, and under no circumstance can the fundamental rights under Article 19 be waived by any person, nor can any person be forced to do something that amounts to the violation of the rights mentioned under Article 19.

And also the 5th point that you said, Money for sitting idle! Is it my fault that I was idle? Should I not have taken the salary because they gave me no work? Moreover, I was looking for better opportunities, and when I found one, I am shifting. What's my fault in that?

Dear Varun, forget about point no. 5; you raised it, I asked, forget it. I fail to understand why you are so disturbed by this issue, as you mentioned "many have left the job and did not pay 1 Rupee."

Legal Considerations

In both the legal points taken from the net, they are final. If you read carefully, you will get your answer. Signing a bond and being a bonded laborer are different. Either way, no one can force a person to work (that is slavery 100%).

Now you have your answer: "pay the bond and you are free to go" or fight a legal battle till the end of the world. The point is you signed a bond not to get a job but to get an add-on (training) where there was no compulsion to avail the training or lose the job.

If your future employer is ready to accept you without a relieving/experience certificate, good for you. What if they wrote to your employer about the dues?

See, my point is you are not writing the footer: discuss with your HRM and sort out the issue. Believe me, no one wants to steal your opportunity.

Regards

I am worried regarding the bond because:

1. When I mentioned to HR that others have left and were not asked for the bond, they said, "It's totally the business unit head's decision who to take the bond from and who not, and this time there is no waiver at all." Does this make sense? To me, it doesn't. Is it not partiality? How does it work out? I am totally unaware of this, thus asking. Can they mold their rules and regulations like this?

2. Yes, there was compulsion for signing the bond; otherwise, no offer letter was given. They got it signed on the first day of joining.

New Point of Concern

One new point I forgot to mention is that the bond was signed between me and the ABC organization, which is now acquired by XYZ organization. We heard that at XYZ organization, the bonds are not valid. So do these bonds hold anymore? There was also news inside the company that the bonds have been waived off due to the acquisition. (Officially, HRs don't release such information. It was internal news; HRs have been heard quoting this.)

My bond was signed with ABC organization, and the name has also been changed completely. Does this give me any benefit?

I am really sorry; I know this is too much of a mess. It would be great if you can help around.

Regards,

Dear Varun,

The waiver and add-on benefits are at the sole discretion of the employer and are subject to a case-by-case basis. If I sign a contract with Reliance Comm and that firm is now Reliance Info, my bond is still valid. My point is the firm cannot evade liability by changing its name, just as its debtors can't.

Sorry, but both points did not work in your favor. I have been telling you from day one that you need to negotiate with the present HRM. However, getting something may come at a cost, for example, a two-month notice instead of one. Since you mentioned that "many have left the organization without paying 1 rupee," the HRM must be frustrated, and he will likely shift the responsibility to your departmental head.

Scope for Negotiation

Now, as you have mentioned that the bond was signed at the time of the offer, it becomes a criterion of selection itself. If you discover such binding after joining, no court can enforce such a bond. Simply put, an offer is like a sale catalog (*conditions apply). Once you join a firm based on the offer letter, it signifies acceptance of the offer, and joining itself initiates the contract. The subsequent appointment letter documents the entire process, i.e., the formal contract. If the bond is introduced after joining, it is legally unenforceable. Consult with any advocate. However, how will you prove it?

Regards,
Rupendra Chahar
[Phone Number Removed For Privacy Reasons]

Ok, so it somehow seems that I can pay the bond and get the release faster or keep fighting with them and even put my other job at stake, right? This is how I can summarize what you said. 

Negotiating the Bond Amount

Ok, so the next question I have in mind is, do these guys also negotiate on the bond amount? To be honest, I am not in the mood to pay at all, like I told others. Let's etc. But I don't want to mess up and lose out on the other job too. The current HRM also knows that I can easily run away. Again, to be honest, I don't really care about the legal suit against me or something; I can very well say that no training was provided, which is worth 1 lakh, and also my complete year was wasted as no work was given.

So all in all, do they negotiate on the bond amount? I am okay with paying somewhat and getting a smooth exit! Money I can earn again; I just don't want to listen to their stupid, senseless talks!

The most important thing is that you believe they have the upper hand. What is important for you?

1. Getting relieved by paying the bond, or
2. Serving the notice period and avoiding the penalty.

If you have decided, go to your HRM and communicate your priorities. Any confrontation, blaming, or abuse will only worsen the situation. Negotiate in a way that they don't feel cheated, but remember, it's a trade-off – gaining something means losing something.

The bond money doesn't go into the HRM's pocket. Such situations are frustrating for HR managers, and they want to resolve them quickly.

As for legal action, I don't think they or anyone can proceed. The organization doesn't operate based on individual moods, so it's irrelevant. It seems you may not even need a relieving certificate now.

Please feel free to reach out if you need further assistance.

Best regards