Leaving a Job Early Due to Health Issues: Can a Company Enforce a Non-Stamp Paper Bond?

Hi, I have signed a bond with a company for one year, but it was not on stamp paper. I signed on the letterhead of that company. Due to the hectic work environment and my health issues, I left after only five months. They said they will take legal action against me. Please help me by giving suggestions to get out of this.

Clarification on Appointment and Probation

Were you given an appointment letter? When did your probation period end? Did you receive a confirmation letter after the completion of your probation period? If your appointment was not confirmed in writing, the company cannot take any legal action against you. Stop worrying.

Legal Implications of Bond Agreements

A bond should have been executed on stamp paper. Under sections 73 and 74 of the Contract Act, a reasonable amount of damages can be recovered proportionate to the expenditure incurred upon the employee in imparting training. The period for which you have already rendered service has to be taken into consideration, irrespective of the liquidated amount stated in the bond. Such is the prevalent law today.

However, a new dimension of diminishing liability of the employee under the bond is visualized, which may be tested in judicial fora. Thus, in respect of employees governed by the State Shops and Establishment Act, and those governed by the Payment of Wages Act, it is generally laid down under the Acts that wages shall be paid without deduction except when authorized by law. Thus, even if the employer and employee agree through an agreement, the employer cannot recover any amount from the wages of the employee, except in the manner authorized by law. It follows that the above bond agreement between the employer and employee is superseded, although executed under the Contract Act. The provisions of the Payment of Wages Act and Shops and Establishment Act supersede the Contract Act provisions to that extent. If debt from the employee cannot be recovered from wages as it is bad, it cannot be recovered from the surety. This is a new dimension of diminishing the liability of the employee in the above line of approach.

Moreover, since you worked as a network engineer as a technical person, you may be considered to be covered as a workman under the Industrial Disputes Act, 1947, and thus cannot be subjected to unreasonable terms or conditions.

Thanks,

Sushil

Understanding Employment Bonds and Legal Implications

The bond in question was created by the employer in lieu of what? Is it stated in the bond that, in lieu of certain considerations, the employee has agreed to work for a specified number of days or months?

This is the question that needs to be answered by the querist. The bond needs to be examined verbatim along with the job advertisement, job application, employment application, interview call letter, selection letter, offer letter, appointment letter, bond, and copy of resignation.

If there was no such consideration offered to the employee, then the bond may not even be worth the piece of paper on which it is written.

The liquidated damages stated in the bond need not be paid on demand and may have to be proved.

As per various publications and threads, bonds and service agreements have become a nuisance. Unscrupulous employers that do not honor labor laws, rights of employees, do not pay wages on time, do not give overtime, indulge in malpractices, and unfair practices are thus offenders. They are throwing bonds to sign.

Employees who do not unite, form unions, or become members of employee unions, or affiliate trade unions like CITU, AITUC, INTUC, BMS, etc., are exploited.

Are you aware that the 'Works Committee' as in the Industrial Dispute Act is an authority, and many states have made it mandatory to form a Grievance Redressal Committee in each company? United employees can negotiate service conditions, and union leaders can help to fight such exploitation.