Breaking a Service Bond: How Should I Handle a Demand for Payment After Resignation?

I was working with a big IT company where I had signed a service bond for a period of 2 years. I had worked with the company for 1 year and 1 month. Due to some reasons, I had to leave the company. At that time, the HR accepted my resignation and gave me a resignation acceptance letter stating that my resignation had been accepted but did not provide me with the relieving letter. Now, they are asking for the bond amount after 2 years. Please let me know what I should do.

If you reproduce the relevant portion from the so-called bond here, we will be in a better position to help you in the matter. But rest assured that they can't do much in the matter.

Hi!

The company may accept a resignation as a bond cannot stop anyone from leaving a company. However, a bond makes the company eligible to recover the expenses incurred in the training and also the incurred losses due to a premature resignation. All depends on the inputs provided by the Company and the clauses of the Bond. Also, by not providing a relieving letter, the company has kept its stand that the resignation is accepted but the penalty has to be paid. As Mr. Prakash commented, a bond can be enforced within 3 years.

Anand

In my case, they forced me to leave the company so I did not resign of my own will. I lost the job at that time, and then the HR asked me to submit a resignation letter and just gave me a resignation acceptance letter. At that time, they did not mention anything about the bond and other details.

Dear All,

I have been instructed by my management to issue a service bond (minimum 3 years) to one of my employees. I would appreciate it if you could assist me by providing the format and contents (clauses) of a service bond.

Regards,
Swapnaja

Hi all,

I'm new to this community. Please help me out regarding the following. I have recently joined an MNC. At the time of the interview, they didn't tell me, and there was no mention of any bond in my offer letter. Yet, they are telling me now that there is a bond of 6L for 3 years. I have to sign as I have no way out now. But next year, I'm appearing for an MBA, so I have to leave the company then. Is there any way out at that time? Please help, I'm perplexed and can't start preparing. They are forcing me to sign the stamp paper. Can there be any loophole as I'm not going to join any company further?

Regards,
Bhatta

Dear Samir,

From what you say, if the resignation was forced, then the bond cannot be invoked. Please send a protest letter explaining in detail the circumstances of your resignation, which was not voluntary. If they still insist, back it up with a Legal Notice. It is not a winning case for the Management. If you put up a good fight, they will back out.

With Regards,
V. Sounder Rajan
VS Rajan Associates,
Advocates & Notaries,
No. 27, 1st Floor, Singapore Plaza,
No. 164, Linghi Chetty Street,
Chennai - 600 001.
Email: rajanassociates@eth.net
Office: 044-42620864, 044-65874684,
Mobile: 98401 42164.

Hi,

Can you help me, please? In the bond, it's written, "I shall not leave, abandon, terminate, or give cause for termination of my employment." So can't I go for higher studies? I'm at a stake. I have already given the details of the situation. Please help.

Regards,
Bhatta

Dear,

We cannot advise you to take a risk. Signing the bond will make you liable. When you want to pursue your career, please avoid taking risks. It will put your career in peril. Tell them you can take the job without the bond. Seeing your hesitation on its terms and the amount, it is like jumping into fire. Please avoid or convince them to proceed without the bond.

With Regards,

V. Sounder Rajan
VS Rajan Associates
Advocates & Notaries
No.27, 1st Floor, Singapore Plaza
No.164, Linghi Chetty Street
Chennai - 600 001
E-mail: rajanassociates@eth.net
Office: 044-42620864, 044-65874684
Mobile: 98401 42164.

Mr. Ranjan,

I was told by a lot of HR professionals that a bond (unless it's related to some special training the company provides its employees and is recovering that cost if the employee does not work for a certain period) is not valid and is illegal.

Also, one of my friends has signed a bond for 2 years but now is not able to continue due to family issues. However, her company is not accepting her resignation. They have her original education certificates and are refusing to return them until she completes her 2-year bond period or pays the bond amount.

Can't she come out of this situation? She has been working for 6 months now. If she quits without giving any resignation or notice, can the company take any legal action?

Please help.

Hi Rajan,

The company is a big organization in Hyderabad, and they have significant legal resources. Therefore, I am hesitant to engage in a legal battle against them. The issue is that I do not possess certain documents, such as a termination letter, which the company provided as evidence of my termination. Instead, the HR department advised me to submit a resignation letter, and in return, they issued a resignation acceptance letter.

Now, they are requesting the bond amount, claiming that I breached the contract by leaving the company.

Thanks,
Samir

Dear Samir,

The world does not end with a full-fledged legal department. Many big corporations have lost cases against citizens. Don't fret. If one door closes, another will open. As you take up the issue, things will unfold to your advantage.

V. Sounder Rajan

Off: 044-4262 0864, 044-6587 4684

Dear Deepthi,

From what you say, family issues may be the reason why the management, when the issue is presented to them in the proper perspective, may reconsider their stance. Initially, make a forceful appeal to them and then seek specialist legal advice. We can assist you in locating a counsel in your area.

V. Sounder Rajan
Office: 044-4262 0864, 044-6587 4684

Company cannot force a person to work for them; therefore, there is no just cause for them to retain the original certificates. A legal notice to return the certificates should normally work.

Regarding the bond, the company shall have to prove that a certain amount was spent on specialist training or a foreign trip, etc. This involves filing a civil suit to enforce the bond, which could take a few years to complete. Consequently, companies would be willing to settle with the employee on a fair basis without going to court.

I am also working in an MNC for the past year. I have signed a 2-year bond with that company. They recruited me through the campus recruitment program. For the past year, I have not been assigned to any project. They provided me with 4 months of training, and after that, I have been on the bench (business wait) for 7 months.

As I am getting married and moving to the US, I need to resign from my job. I have submitted my resignation, but they are not allowing me to leave. They are asking me to pay the bond amount of 2 lakhs. Furthermore, I do not plan to work after my marriage, so I do not require an experience certificate. Kindly assist me in obtaining relief from this situation. 😞

Dear All,

I am new to this site and have posted my query in several places. Therefore, I am putting my query here again. Please revert with a good suggestion. Thanks in advance.

I am working in a Malaysian company in the IT department. I signed a two-year bond with the company, where the bond amount states that if I terminate before 365 days, then I will have to pay 6 months' salary, flight tickets, visa fees, and other expenses incurred by the company. If I terminate after 365 days but before 2 years, then it will be 3 months' salary plus all the above. I am originally from India.

I have already served 1 year, and the company has not given me my bonus or any salary increment. The bonus is 10% of the salary depending on performance. The company simply states that my performance is not up to the mark. Additionally, I have family issues as my mother is not feeling well, and I have already submitted a medical certificate for this. However, the company is still demanding the bond money. I have given them 3 months' notice after discussing with my manager, who assured that he would waive off the money if I streamline the process (not in writing). I put in extra effort and completed my tasks. Now, my manager is saying it depends on HR whether they want to waive it off or not and may simply change my department. Furthermore, my manager is leaving, and the new HOD is also uncooperative. Several employees from India have left before, around 6-7, with 4 already gone due to the company's poor treatment. They all left without paying the bond, and I could do the same, but I prefer a peaceful departure.

Could somebody guide me on how to handle this situation? I resigned in April, and my last day is in July, but the company is not willing to waive off my bond. They even mentioned that my dependent visa will not be renewed as I am resigning before 2 years.

One more thing, the bond clause is in the appointment letter and not in any separate agreements.

Regards,

Vicky

More at https://www.citehr.com/9912-service-...#ixzz0oM6OW0Hz

Hi Mr. Rajan,

I also have the same concern. I had joined a big MNC in Sep '06 with a bond agreement to serve the company for 3 years. The conditions were as follows:
- If I leave before the completion of 6 months - bond amount Rs 75K
- After 6 months but before the completion of 3 years - bond amount Rs 150K

I resigned from the services in Mar '07 at the completion of six months, i.e., before acceptance of the next period letter. Now, in 2010, my current company has come to know about the outstanding liability through a background check report and wants me to settle.

Question: In 2010, I requested a relieving letter from my first employer, but they are asking for 75k. Do I have to pay the sum to get a relieving letter, or are there any other ways out as well?

Regards,
Samar