Is It Legal to Require Employees to Stay for a Year? Seeking Advice on Binding Agreements

Hi all,

In our company, we want to establish a policy as a binding agreement between the company and employees. When recruiting new employees, we shall prefer that the employee sign the agreement with a clause stating that no employee can leave before completing one year of service.

Please guide me on whether this is valid as per the law.

Thank you and regards.

Post-Termination Restraints and Indian Law

No such contract or NDA, being against public policy, is permissible. The Delhi High Court has held that an agreement with an employee not to undertake employment for 12 months after leaving the job will be a violation of the Indian Contracts Act, 1872.

It has also been held that it is well settled that such post-termination restraints under Indian law violate Section 27 of the Contracts Act.

In another case, the Delhi High Court has held that the rights of an employee to seek and search for better employment are not to be curbed by the court through injunction orders, even on the grounds that they have confidential data of the employer.

Stephen is not asking what you have clarified. The gentleman wants to take a written agreement for a minimum of one year of service. Anyway, this type of bond is also not valid in law.

Sir,

Under which law is the binding agreement not valid? Please provide me with any section or case law related to this matter.

Bonded labor is abolished in India. There are numerous discussions on bonds on CiteHR. You can search for it.