Hi all,
I am new to this forum. One of my friends is working in an IT company. He signed a bond of Rs 2 lakh on a Rs 100 stamp paper, with relatives signing over the bond as a guarantee for 2 years. The bond is one-sided, meaning he is obligated to pay if he leaves the company.
Currently, he is not receiving a salary that meets market standards, and he is required to work 12-13 hours daily, including Saturdays, Sundays, and holidays.
If my friend resigns from the job without paying the bond amount, what legal actions can the company take against him or vice versa? Please help me in this regard.
Thanks in advance.
From India, Mumbai
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I am new to this forum. One of my friends is working in an IT company. He signed a bond of Rs 2 lakh on a Rs 100 stamp paper, with relatives signing over the bond as a guarantee for 2 years. The bond is one-sided, meaning he is obligated to pay if he leaves the company.
Currently, he is not receiving a salary that meets market standards, and he is required to work 12-13 hours daily, including Saturdays, Sundays, and holidays.
If my friend resigns from the job without paying the bond amount, what legal actions can the company take against him or vice versa? Please help me in this regard.
Thanks in advance.
From India, Mumbai
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Dear Friend,
It has become the practice of employers to make candidates sign such kinds of bonds to blackmail them. It is also true that contracts signed under duress and coercion are not binding.
Employers may file an FIR and civil case, but if handled properly, they have no relevance. Generally, such agreements have an arbitration clause, and the candidate is supposed to attend to set aside the agreement. It can even be set aside by appealing before civil courts.
Regards
From India, Vadodara
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22It has become the practice of employers to make candidates sign such kinds of bonds to blackmail them. It is also true that contracts signed under duress and coercion are not binding.
Employers may file an FIR and civil case, but if handled properly, they have no relevance. Generally, such agreements have an arbitration clause, and the candidate is supposed to attend to set aside the agreement. It can even be set aside by appealing before civil courts.
Regards
From India, Vadodara
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Hi,
These bonds are there for a reason - most freshers require some training before they can show results, and no company would recruit freshers if they couldn't hold on to them. Since your friend has signed the bond, he is ethically and legally obliged to follow its terms. He can pay up the amount and resign if he thinks that his salary is far below the market rate. If he cannot afford to do that, 2 years is not such a long time, and he'll make much better money if he resigns after 2 years.
The employer can file a civil complaint, and reference checks for the rest of his career (sometimes even visa processing) will show this.
From India, Madras
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These bonds are there for a reason - most freshers require some training before they can show results, and no company would recruit freshers if they couldn't hold on to them. Since your friend has signed the bond, he is ethically and legally obliged to follow its terms. He can pay up the amount and resign if he thinks that his salary is far below the market rate. If he cannot afford to do that, 2 years is not such a long time, and he'll make much better money if he resigns after 2 years.
The employer can file a civil complaint, and reference checks for the rest of his career (sometimes even visa processing) will show this.
From India, Madras
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Salam,
I don't think Co. can do any thing because all contracts should be based on Mutual Consensus bases & should be beneficial for both the party, employees can claim that when he singed the contract he was in need & had no other option,
Other than that usually Co. don't put claim on employees because it cost the Co. more than what they claim from the employees. These comments were given by our Labor Law Professor & I have seen many employees breaking the Bond & employer doing nothing about it.
From Pakistan, Karachi
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I don't think Co. can do any thing because all contracts should be based on Mutual Consensus bases & should be beneficial for both the party, employees can claim that when he singed the contract he was in need & had no other option,
Other than that usually Co. don't put claim on employees because it cost the Co. more than what they claim from the employees. These comments were given by our Labor Law Professor & I have seen many employees breaking the Bond & employer doing nothing about it.
From Pakistan, Karachi
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Bonds have no legal value; they are only used to exert mental pressure on employees to encourage them to stay in the company. The issue arises when they complicate the process of obtaining necessary certificates required for submission to a new organization.
With regards,
Nitin
From India, Pune
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With regards,
Nitin
From India, Pune
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Hi Sreeee_HR,
These bonds are there for a reason - most freshers require some training before they can show results, and no company would recruit freshers if they couldn't hold on to them. Since your friend has signed the bond, he is ethically and legally obliged to follow its terms. He can pay up the amount and resign if he thinks that his salary is far below the market rate. If he cannot afford to do that, 2 years is not such a long time, and he'll make much better money if he resigns after 2 years. The employer can file a civil complaint, and reference checks for the rest of his career (sometimes even visa processing) will show this.
Hi Sree, thanks for your comment. Even if he works for the above company for two years, he will not be able to save 1 lakh. His compensation is far below the market standards as I mentioned. So it will not be a loss for him if he stays for 2 years at the same compensation as he has joined recently, and even after that, if he resigns, he will not get more than 4k per annum at that time. Another thing is he is asked to work for 12-13 hours daily + weekends as I mentioned. Could you please suggest any alternate options?
From India, Mumbai
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These bonds are there for a reason - most freshers require some training before they can show results, and no company would recruit freshers if they couldn't hold on to them. Since your friend has signed the bond, he is ethically and legally obliged to follow its terms. He can pay up the amount and resign if he thinks that his salary is far below the market rate. If he cannot afford to do that, 2 years is not such a long time, and he'll make much better money if he resigns after 2 years. The employer can file a civil complaint, and reference checks for the rest of his career (sometimes even visa processing) will show this.
Hi Sree, thanks for your comment. Even if he works for the above company for two years, he will not be able to save 1 lakh. His compensation is far below the market standards as I mentioned. So it will not be a loss for him if he stays for 2 years at the same compensation as he has joined recently, and even after that, if he resigns, he will not get more than 4k per annum at that time. Another thing is he is asked to work for 12-13 hours daily + weekends as I mentioned. Could you please suggest any alternate options?
From India, Mumbai
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Dear Amrish,
If your friend has signed a bond with total understanding, then he has to abide by that in letter and spirit, or else it's a breach of trust. Just imagine a company takes you on a contract with "x" salary, and when you join, they pay you less than agreed. What would be your reaction?
If your friend has the feeling that he is not doing well professionally, then abide by what he has signed in the bond. Even if it is one-sided (don't know why he ever signed that), you always have an option to discuss the same with the company and negotiate for a lower amount. If you have made a mistake, you will have to bear the brunt.
You have also not disclosed why a 2 lac bond was signed (quite an amount). Is the company providing him On-Job training? Clarify, please.
And if salary is the only criterion to resign, ask your friend to rethink that. Money can be earned anytime and anywhere; what you will not earn are "the experience and skills" which you have to hone yourself.
On legal grounds, your friend is calling for trouble if he breaks the bond.
For additional hours, your friend has every right to ask the company to compensate him. Ask your friend to visit the nearest Labor Office and complain about the company for action.
Regards,
Ukmitra
From Saudi Arabia, Riyadh
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If your friend has signed a bond with total understanding, then he has to abide by that in letter and spirit, or else it's a breach of trust. Just imagine a company takes you on a contract with "x" salary, and when you join, they pay you less than agreed. What would be your reaction?
If your friend has the feeling that he is not doing well professionally, then abide by what he has signed in the bond. Even if it is one-sided (don't know why he ever signed that), you always have an option to discuss the same with the company and negotiate for a lower amount. If you have made a mistake, you will have to bear the brunt.
You have also not disclosed why a 2 lac bond was signed (quite an amount). Is the company providing him On-Job training? Clarify, please.
And if salary is the only criterion to resign, ask your friend to rethink that. Money can be earned anytime and anywhere; what you will not earn are "the experience and skills" which you have to hone yourself.
On legal grounds, your friend is calling for trouble if he breaks the bond.
For additional hours, your friend has every right to ask the company to compensate him. Ask your friend to visit the nearest Labor Office and complain about the company for action.
Regards,
Ukmitra
From Saudi Arabia, Riyadh
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Hi Ukmitra, They have provided 4 months training before giving them project . In the bond amount they have mentioned that training amount is 2lac .. Anyways thanx for ur reply
From India, Mumbai
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From India, Mumbai
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Hi Amrish,
You're taking a lot of trouble for your friend. :-)
I don't know what training the company has provided, but I assume it must be some skill that's valuable in the market. Also, working long hours, even on weekends, is not unknown in the IT industry. It happens to everyone at the beginning of their career. While salary is important, let him concentrate on learning as much as possible, building contacts, and gaining a feel for hard work. Counsel your friend that he will gain valuable experience by working in his current organization for the bond period, rather than jumping simply because things are tough. What will he say when an interviewer asks him why he wants to leave?
Also, I get reference checks every day for employees who have left the company. It is never very pleasant for those who have skipped a bond.
If he is determined to quit no matter what the cost, he could try negotiating with the company. But he must be good at negotiation. Ultimately, if he can prove his capabilities in the present organization, things will be much smoother for him.
From India, Madras
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You're taking a lot of trouble for your friend. :-)
I don't know what training the company has provided, but I assume it must be some skill that's valuable in the market. Also, working long hours, even on weekends, is not unknown in the IT industry. It happens to everyone at the beginning of their career. While salary is important, let him concentrate on learning as much as possible, building contacts, and gaining a feel for hard work. Counsel your friend that he will gain valuable experience by working in his current organization for the bond period, rather than jumping simply because things are tough. What will he say when an interviewer asks him why he wants to leave?
Also, I get reference checks every day for employees who have left the company. It is never very pleasant for those who have skipped a bond.
If he is determined to quit no matter what the cost, he could try negotiating with the company. But he must be good at negotiation. Ultimately, if he can prove his capabilities in the present organization, things will be much smoother for him.
From India, Madras
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