Facing a 1-Year Employment Bond: Can I Resign Without Paying the Penalty?

The following was written in my offer letter at the time of signing.

"You agree and undertake to serve the Company for a minimum period of 1 year from the date of your appointment with the Company. In the event of breach of this condition, you agree and undertake to reimburse the Company 3 months' salary against the cost incurred by the Company towards your training and/or otherwise, which shall be without prejudice to any other rights that may be available to the Company under applicable law."

Due to multiple reasons such as a lot of micromanagement and toxic work culture, I have now decided to resign after 6 months of employment.

Can this bond be enforced?

They have a 3-month long notice period, and I'm concerned if this amount will be recovered from my FnF. What are the options I have to make sure I leave without any damages?

P.S. I am an experienced professional, and no training whatsoever was imparted to me. The sole probable reason for enforcing such a bond was due to high attrition prevailing in the division I joined. TIA

Why did you sign an agreement with such onerous conditions?

This same subject is coming up here on CiteHR almost every week, sometimes more than once. The question I ask is why are people subjecting themselves to these problems?

First and foremost, you must do your due diligence on the company to make sure that it is the right place for you—long before you sign any documents that will bind you to the company. Too many people here on CiteHR are joining companies, only to find out once they are on staff, it isn't what they wanted. Whose fault is that?

At the end of the day, a contract is a contract—and almost all contracts have penalties for non-performance. If you feel you cannot fulfill the conditions of a contract—THEN DON'T SIGN IT—and save yourself a lot of heartache and misery.

As Mr. John rightly pointed out, a contract is a contract only. An appointment letter of yours is an employment contract, with the 1st party as Employer and the 2nd party as Employee, which is you. Once you sign the contract, the terms and conditions mentioned in that contract are applicable to and binding on you.

Our suggestion is that since you have completed six months of service, you may continue for six more months and then resign and leave. You will also have ample time to search for and find a suitable job.

To my knowledge, the Employment Bond is not enforceable unless the employer has imparted specialized training incurring additional expenditure. This is the well-settled legal position, and any condition in a contract against public policy is void and hence unenforceable.

I agree with Mr. Venu. The clause requiring you to work for a year and the clause to pay a certain amount are both unenforceable. The only amount that can be asked in reimbursement is an amount paid for actual training (formal training, not on-the-job training).

However, it is very much possible that the amount will be deducted from your F&F, and going to court over it is an expensive and often futile matter. You obviously want to serve the notice period. If you don't get your salary each month, you can simply refuse to serve the notice period. However, you need to know how your next employer will react to your not having an experience certificate and relieving letter.