Facing a Legal Battle: How to Handle Ex-Employer's Claim for Training Costs and Non-Compete Issues?

Employer Claim for Training Expenses

The employer is claiming an expense of 5 Lacs for on-the-job training related to the use of tools and instruments to perform services and achieve results. The appointment letter clearly mentions an "employment bond" and a bond of service, but not a contract of service, employment agreement, indemnity bond, etc.

Legal Summons and Financial Demand

My ex-employer has summoned me to the lower court in Delhi, demanding payment for the training cost plus an additional 2 Lacs for losses they claim to have suffered due to my departure. In total, they are asking for 7.11 Lacs for breaching a 3-year employment bond, during which my salary was 1.9 Lacs per annum. I resigned without serving the 30-day notice period after completing 2 years and 5 months, with 7 months remaining on the bond. I was not given a confirmation letter after the 2-month probation period.

Non-Compete Clause Concerns

My appointment letter states that I cannot join another company or solicit clients from this company for 2 years after leaving. Can they penalize me or my new company, or is it permissible for me to work as self-employed?

Upcoming Hearing

My hearing is scheduled for October 17, 2015. I currently reside in Goa.

Please advise me on the best way to prepare my defense.

Hello Hitendra,

In principle, Employment/Service Bonds that are a result of ANY provable Training ARE legal. Please wait for the legal eagles in this Forum to respond with more details.

Regards,
TS

Legal Defense in Employment Bond Case

This case can be handled by a professional advocate as you will need to defend yourself in court. Points that can go in your favor:

- The company cannot simply claim Rs 5L for training on the job; they will have to quantify the expenditure. Was there any production output as a result of the on-the-job training (OJT)?
- The loss of 2L due to your departure cannot, in general, be recovered from you. These losses are remote consequences, and quantification is difficult. How have they calculated 2L and attributed it to your exit?
- Only 7 months were left for the completion of the bond period anyway. If probation was not revoked, then what terms are there for a person on probation to exit?

Many such defenses can come up. Consult a good lawyer in Delhi and fix the terms of retainership, payment, etc. Collate all papers regarding your previous employment. While a legal proceeding is always a troublesome matter, be bold and defend yourself by taking proper legal advice. The company is also in a weak position in some areas, as I can see from your post.

Regards

Understanding Liquidated Damages and Employment Bonds

Now, saying that the organization is demanding 7 lakhs is incorrect. You have seen and accepted the appointment letter, which had this clause, and you had the option to refuse this and not join the company. You also say you didn't serve the required notice period, which is also wrong, and you knew you have a one-month notice period.

Evaluating Liquidated Damages

Now, the question is the amount of liquidated damages. The organization has the power to file a case, whether legal or illegal, that the court will decide. But do you have time to attend court, hire a lawyer, and spend money? I suggest you request your employer, saying out of the required 3 years of service, you have served the majority of the part. Hence, they should waive it off. If they do not agree, ask them to proportionately charge. In any case, you have to pay for the one-month notice. Also, negotiate and request to waive it off.

Importance of Mutual Settlement

This is a better way to part with any employer. In the future, there will be past reference checks, and if you need a good reference, it's better to do this. Otherwise, if you don't agree, fighting in court may lead to spending the same amount of money on lawyers, which is an utter waste. Mutual settlement is the best way out in such cases.

Final Advice

Next time, read your appointment letter properly before signing and accepting the offer. Good luck!

Regards

Hello Hitendra,

Can you share your original appointment letter/employment contract and any other indemnity letter/agreement letter that you would have been issued (specify which of them have been acknowledged by you)? It's only fair to comment on the case by reviewing the document. You may mail it as a PDF to [Login to view] with your contact number to enable me to talk to you in case of queries.

Cheers,
A.B.

Kanvij, Nathrao Sir, thank you very much for your kind reply. I worked here and encountered the exact case: http://indiankanoon.org/doc/90682699/. The company provided direct instructions under a supervisor so that I could deliver the exact contents from the training manuals to the clients. This was the core job role of being a trainer. The imparting of training to clients was my job role, and the supervisor was to assign the job to me and ensure the quality of service.

The said Induction or Internal Training provided by the Supervisor was to ensure the quality of service while I delivered the same instructions to clients. It didn't help in my cognitive development, nor could it be applied outside the predefined environment of the company. I never worked in real-time application of the concepts of instructional manuals. Hence, no production output came out of the said direct instructions. The only responsibility was the delivery of training instructions from the manuals to clients.

The Supervisor acknowledged multiple times that "following instructions from the manual and getting the same result in the predefined environment doesn't require any skills. Even a 3-year-old daughter, if she could read English, can do the same thing." Hence, for the same job, special privileges or special training were not required. Until the last day with the company, I never had the required certificates as qualification standards maintained by Microsoft to impart training. As I was jobless for the last 4 months before joining and financially not sound, I had no bargaining power in negotiation for any ready formats of a bond.

Thus, all expenses are only towards salary. This is a business consideration and is already worked into Admin Expenses in supervisors' and my salary. The purchase of training manuals was not for employees; they were for clients, and we were provided access only to deliver the exact instructions from the manual and get the same results. Hence, the products that the company is supposed to sell by means of imparting service, I stood as a workman in performing the service, which also contradicts my position as a Trainee. According to the Apprentice Act, Trainee and Apprentice have the same meaning, and an Apprentice is not an Employee. But here, I was on the payroll of the company.

How can the company ask for money for the job instructions and job role they provided under the pretext of the wrong interpretation of the word training, which is the business of the company? Regarding the above case number, can you defend my case in the same district court, or if not, can you please provide a reference to a lawyer who can help me willingly? Please reply soon, as we are currently in Delhi searching for a helpful lawyer.

With Best Regards,
Hitendra, Mob-[Phone Number Removed For Privacy Reasons]

Thank you very much for your kind reply. I was working here, and the exact case is:

Case Details

CS No. 38/13/13 Koenig Solution v. Kuldeep Singh on 17-9-14 http://indiankanoon.org/doc/90682699/

The company provided direct instructions under supervision so that I could deliver the exact contents from the training manuals to the clients. This was my core job role as a trainer. Imparting training to clients was my job role, and the supervisor was responsible for assigning tasks to me and ensuring the quality of service.

It was not for my cognitive development, and it could not be applied outside the predefined environment of the company. I never worked on real-time application of concepts from instructional manuals. My only responsibility was the delivery of training instructions from the manuals to clients.

The supervisor acknowledged multiple times that "following instructions from the manual and achieving the same results in the predefined environment does not require any special skills. Even a 3-year-old daughter who can read English can do the same thing." So, no special skills were required to follow instructions from manuals and demonstrate the same results in the predefined environment.

Thus, all expenses are only towards salary. This is a business consideration and has already been accounted for in the administrative expenses for supervisors and my salary. The purchase of training manuals was not for employees but for clients, and we were provided access only to deliver the exact instructions from the manual and achieve the same results.

Question on Company’s Claim

How can the company ask for money for the job instructions and job role they provided under the pretext of a wrong interpretation of the word "training"? Moreover, I was employed as a trainee with the same responsibilities as other permanent employees. According to the Apprenticeship Act, a trainee cannot be considered a workman.

Regarding the above case, can anyone defend my case in the same district court, or if not, can you please provide a reference to a lawyer who is willing to help me here? Please reply soon, as we are currently in Delhi searching for a helpful lawyer.

With Best Regards,
Hitendra
Mob-[Phone Number Removed For Privacy Reasons]