Dear Mansi,
You have written that you have received negative feedback from the past employer of an employee who was recruited recently. But then what is the issue? What exactly has been written in the feedback? Did he commit any fraud? In what department was he working and will be working in the same department? Will he be dealing with suppliers, customers etc and if yes, then does it involve financial transactions?
Though you have not written directly, yet it implies that you wanted to take some security deposit from the employee. This could be your indemnity against the fraud that he might commit. In case if he commits some fraud, he forfeits the amount deposited. Is my interpretation correct?
For Mr V. M. Lakshminarayanan: - In my above paragraphs, I have explained the purpose why the company wants a security deposit from the newly recruited employee. On this, you have suggested that the company should not just receive the cheque from the employee but it has to be backed by the legal agreement also. It was a good suggestion.
Nevertheless, in your second post, you have provided the draft of the indemnity letter. However, certain paragraphs of the draft are not applicable to the case at hand. The security deposit is not for serving for some minimum number of years.
Secondly, your draft says that in case of the breach of the conditions of the employment, the employee is liable to pay Rs 1,00,000/- However, the originator of the post has asked the validity of taking a blank cheque from the employee.
Going further, your draft does not say anything about returning the security deposit to the employee. What if the employee serves honestly for 'x' number of years? How long the company should hold the cheque?
For Mansi: - You want a blank cheque from the employee as indemnity. However, what if the employee gives a blank cheque, signs the indemnity bond also but issues stop payment instructions to the bank? Therefore, if you wish to hire this employee then better hire services of a professional lawyer and get the agreement. Let employee pay the lawyer's charges.
An alternative to getting into receipt of blank cheque and signing of bond etc is to pay just the minimum wages to the employee for the next 'x' number of months. The difference between salary any other candidate would have received and minimum wages that you will pay to this employee would be indemnity. For example, if the minimum wages are Rs 12,000/- and any other employee would have received Rs 25,000/- for this position then Rs 25,000 - 12,000 = Rs 13,000/- would be the indemnity per month. This can go on for 8-10 months and thereafter you can start paying him Rs 25,000/- However, you need to issue well-drafted appointment letter for this. There should not be any room for ambiguity. You need to mention clearly under what conditions an employee is eligible to get back the difference and when he will get.
Thanks,
Dinesh Divekar