Facing Termination Over a Service Bond: How Can I Resolve This and Get My Documents?

I signed a bond with XYZ for pursuing higher education in July 2013. My classes started in August 2013, and I missed a few initial classes. Consequently, the institute canceled my application for the current batch and transferred me to the next year's batch, starting in July 2014. Meanwhile, I resigned from the service in December 2013. I completed all the relieving formalities with the company except for the service bond. I agreed to a 1.5-month notice period and paid the remaining 1.5-month salary by cheque to the company. However, the company demanded I pay ₹250,000 as the bond value before they would relieve me.

I requested to continue my education (as it is a distance learning course with classes only on Sundays), but the company did not agree. They stated that they had paid the tuition fee and I had to reimburse them. I was in conflict because, without completing my education, I couldn't justify paying the full amount to the company. The bond stated that the company agreed to complete my education. I requested proof of the fee paid to the institute and a No Objection Certificate (NOC) so I could continue my education and repay the tuition fee. The company did not agree.

Now, after one year, in December 2014, the company sent me a termination letter due to non-compliance with the service bond, as well as the return of the cheque for the money paid against the notice period of 1.5 months. I have not yet received my relieving letter, experience letter (4 years), and Provident Fund (PF).

What Can I Do?

Can I challenge the termination letter?

How can I obtain my relieving letter, experience letter (4 years), and PF?

In short, how can I resolve this matter as soon as possible?

Legal Considerations in Employment Bond Disputes

There are various issues involved in your matter. Firstly, as far as the bond is concerned, since the employer has not incurred expenses of Rs. 250,000 on you regarding education, it is unlikely that your employer will be awarded that much amount. Under Section 74 of the Contract Act, only a reasonable amount pertaining to expenditure incurred can be recovered. Further, the bond should have been executed on stamp paper of appropriate value; otherwise, it cannot be read into evidence.

Secondly, after a passage of one year of not continuing in the job, the employer cannot resort to termination. They accepted the notice pay and the partly rendered service by you for the notice period. They are barred from retracting after one year by estoppel. Under Section 30 of the Shops and Establishment Act, termination can be done only for misconduct, whereas non-settlement of dues, even if contrary to the law, is not misconduct. Under the Delhi Act, Section 30 proviso enables you to file a complaint before the Magistrate for a violation of the provision. Make a complaint to the Magistrate or authority under the Act to obtain a relieving letter. If you are governed by another State Act, look for a similar provision and authority to complain.

Regards