Hi,
One month ago, I submitted my resignation to my company. Now, my company is asking me to sign a bond which states: "Employee cannot join any client company for three years after working for more than 6 months from the date of leaving. If I join such a company, I will need to pay 10 lakhs to my current company."
I went onsite and returned in September 2012. At that time, the policy stated that "Employees cannot join any client company for 6 months after returning from a client company."
There was no prior notification to me or any other employee about this policy change, and they are asking me to sign this bond after I have already submitted my resignation. If I refuse to sign the bond, they are unwilling to provide me with a relieving letter.
Is it legal to request any type of bond after resignation?
Regards, Alok
9566025183
From India, Chennai
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1One month ago, I submitted my resignation to my company. Now, my company is asking me to sign a bond which states: "Employee cannot join any client company for three years after working for more than 6 months from the date of leaving. If I join such a company, I will need to pay 10 lakhs to my current company."
I went onsite and returned in September 2012. At that time, the policy stated that "Employees cannot join any client company for 6 months after returning from a client company."
There was no prior notification to me or any other employee about this policy change, and they are asking me to sign this bond after I have already submitted my resignation. If I refuse to sign the bond, they are unwilling to provide me with a relieving letter.
Is it legal to request any type of bond after resignation?
Regards, Alok
9566025183
From India, Chennai
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Hello Alok,
There is absolutely no legal basis for asking for such a bond after resignation. How long were you on-site? Also, what is the basis for the amount to be 10 lakhs? I suggest waiting for the legal members to respond with the course of actions available to you.
All the best.
Regards,
TS
From India, Hyderabad
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There is absolutely no legal basis for asking for such a bond after resignation. How long were you on-site? Also, what is the basis for the amount to be 10 lakhs? I suggest waiting for the legal members to respond with the course of actions available to you.
All the best.
Regards,
TS
From India, Hyderabad
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Hi,
I was at the client location (Intel Bangalore) for almost 11 months. Basically, they are saying that if an employee joins the client company, then our company is not getting projects from the client.
Regards,
Alok
From India, Chennai
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I was at the client location (Intel Bangalore) for almost 11 months. Basically, they are saying that if an employee joins the client company, then our company is not getting projects from the client.
Regards,
Alok
From India, Chennai
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HI tajsateesh , Please let e know about some legal action against this.. Regards Alok
From India, Chennai
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From India, Chennai
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Firstly, try to get it in writing from them that they will not issue the relieving letter until you sign this bond.
Upon receipt of the written evidence from them, send them an official email seeking a relieving order. State in the email that these new terms cannot be incorporated at their whims and fancies. Also, for a contract, the terms have to be mutually agreed upon before the start of employment and not enforced by blackmail and arm-twisting.
Mention in the email that not issuing a relieving letter by forcing to sign a bond is blackmail and it attracts penalties under both the IPC and Cr.PC. Therefore, you will be constrained to file a police complaint. They will fall in line.
A similar case happened last week. An employee from a body shopping company was working at the client's place (HP). He got a job in another MNC company. He was asked for a bond or a huge compensation if he works for any client company. He asked them to give it in writing and responded by stating that since he was being blackmailed, he had no other alternative but to file a police complaint. After he received the letter from them in writing, there was tremendous pressure on him to sign the bond. He plainly told them he was getting legal opinion. Those individuals in the company bought this. On the last working day, he sent an email at 5 pm stating he had been advised to go to the Police with a complaint. Within 15 minutes, his relieving order was issued.
Hope you succeed too.
From United+States, San+Francisco
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Upon receipt of the written evidence from them, send them an official email seeking a relieving order. State in the email that these new terms cannot be incorporated at their whims and fancies. Also, for a contract, the terms have to be mutually agreed upon before the start of employment and not enforced by blackmail and arm-twisting.
Mention in the email that not issuing a relieving letter by forcing to sign a bond is blackmail and it attracts penalties under both the IPC and Cr.PC. Therefore, you will be constrained to file a police complaint. They will fall in line.
A similar case happened last week. An employee from a body shopping company was working at the client's place (HP). He got a job in another MNC company. He was asked for a bond or a huge compensation if he works for any client company. He asked them to give it in writing and responded by stating that since he was being blackmailed, he had no other alternative but to file a police complaint. After he received the letter from them in writing, there was tremendous pressure on him to sign the bond. He plainly told them he was getting legal opinion. Those individuals in the company bought this. On the last working day, he sent an email at 5 pm stating he had been advised to go to the Police with a complaint. Within 15 minutes, his relieving order was issued.
Hope you succeed too.
From United+States, San+Francisco
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Hi Anonymous,
Thank you very much for the suggestion. I will implement it practically. However, if I have some information related to my issue from a lower-level perspective, it will be more helpful for me.
Regards,
Alok
From India, Chennai
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Thank you very much for the suggestion. I will implement it practically. However, if I have some information related to my issue from a lower-level perspective, it will be more helpful for me.
Regards,
Alok
From India, Chennai
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Hello Alok,
You received a good suggestion—go ahead and implement it.
Regarding 'some information some low-section related to my issue,' frankly, I don't think that would be needed. One doesn't need to actually know in such situations—what's more important is for the other person to 'get the feeling' that you know. I hope you understand the difference/point.
All the best.
Regards,
TS
From India, Hyderabad
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You received a good suggestion—go ahead and implement it.
Regarding 'some information some low-section related to my issue,' frankly, I don't think that would be needed. One doesn't need to actually know in such situations—what's more important is for the other person to 'get the feeling' that you know. I hope you understand the difference/point.
All the best.
Regards,
TS
From India, Hyderabad
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hi There has no any provision for asking a bond after resignation letter. You must go to the legal experts for solving this matter.
From India, Hyderabad
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From India, Hyderabad
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Hi All,
I will be relieved on 15th May 2013. I have initiated the process via email. Can you please suggest some legal sections that I can refer to and apply accordingly?
Regards,
Alok
From India, Chennai
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I will be relieved on 15th May 2013. I have initiated the process via email. Can you please suggest some legal sections that I can refer to and apply accordingly?
Regards,
Alok
From India, Chennai
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Alok,
You may go ahead and tell your HR team that you refuse to sign any bond at this stage after you have resigned and that you are not willing to agree to changed conditions. Depending on what the business is, you need to see which act you are covered in. Most shop and establishment acts provide for giving releasing letters/service records except in absconding cases. So you are protected by law.
In case you do not get a relieving letter, it's not such a big deal. Keep records of the mail from HR asking you to sign the bond or that they will not give a relieving letter, and all your correspondence in the matter. Show it to your future employers, and they will understand.
Incidentally, you can also sign the bond, as it has no legal validity. There are court cases declaring that a bond or agreement restricting future employment is illegal in India (search for the cases on Google). So even if you sign and then join a client, they can't do anything against you. But it's better that you do not sign the agreement.
From India, Mumbai
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You may go ahead and tell your HR team that you refuse to sign any bond at this stage after you have resigned and that you are not willing to agree to changed conditions. Depending on what the business is, you need to see which act you are covered in. Most shop and establishment acts provide for giving releasing letters/service records except in absconding cases. So you are protected by law.
In case you do not get a relieving letter, it's not such a big deal. Keep records of the mail from HR asking you to sign the bond or that they will not give a relieving letter, and all your correspondence in the matter. Show it to your future employers, and they will understand.
Incidentally, you can also sign the bond, as it has no legal validity. There are court cases declaring that a bond or agreement restricting future employment is illegal in India (search for the cases on Google). So even if you sign and then join a client, they can't do anything against you. But it's better that you do not sign the agreement.
From India, Mumbai
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What has not been agreed to as a contract cannot be enforced by the other party.
The contract for service has been executed by you and your employer in terms of the offer of appointment, your acceptance followed by the appointment letter.
In case the details and conditions of the bond have not been included in your appointment letter, at a later date, the employer cannot enforce the same unless there has been another agreement after your training or a special assignment including a foreign trip.
In the absence of a pre-existing contract between you, the employer cannot enforce any further financial conditions unilaterally.
If any employer persists with his threat, he will be liable for criminal prosecution.
A. Irudayam Advocate - Madras High Court 9940686632
From India, Madras
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The contract for service has been executed by you and your employer in terms of the offer of appointment, your acceptance followed by the appointment letter.
In case the details and conditions of the bond have not been included in your appointment letter, at a later date, the employer cannot enforce the same unless there has been another agreement after your training or a special assignment including a foreign trip.
In the absence of a pre-existing contract between you, the employer cannot enforce any further financial conditions unilaterally.
If any employer persists with his threat, he will be liable for criminal prosecution.
A. Irudayam Advocate - Madras High Court 9940686632
From India, Madras
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Dear Alok,
It is illegal to ask for a bond unless your employer has made special efforts, such as providing special training, at their cost, to enhance your skills. After submitting your resignation, forcing you to sign a bond is entirely unethical on the employer's part. Your appointment letter serves as your employment contract with your employer, and its terms and conditions are binding on you. Even if you decide to join a competitor of your current employer after resigning, your current employer cannot impose any restrictions unless it aligns with what was mentioned in point No. 1 above. If you face any legal threats from your employer, they will be seen as akin to bonded labor, which is prohibited in India, rendering such legal threats null and void in a court of law.
Now, you can confidently proceed with your decision to leave the company and join a new employer. However, you may need to persuade your new employer if they request your relieving and service letters.
Suresh
From India, Pune
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It is illegal to ask for a bond unless your employer has made special efforts, such as providing special training, at their cost, to enhance your skills. After submitting your resignation, forcing you to sign a bond is entirely unethical on the employer's part. Your appointment letter serves as your employment contract with your employer, and its terms and conditions are binding on you. Even if you decide to join a competitor of your current employer after resigning, your current employer cannot impose any restrictions unless it aligns with what was mentioned in point No. 1 above. If you face any legal threats from your employer, they will be seen as akin to bonded labor, which is prohibited in India, rendering such legal threats null and void in a court of law.
Now, you can confidently proceed with your decision to leave the company and join a new employer. However, you may need to persuade your new employer if they request your relieving and service letters.
Suresh
From India, Pune
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Dear Alok,
The provision you are looking for is section 27 of the Indian Contract Act. I am reproducing the same below.
Agreement in restraint of trade void.
27. Agreement in restraint of trade void.- Every agreement by which any one is restrained from exercising a lawful profession, trade, or business of any kind is, to that extent, void. Saving of agreement not to carry on the business of which goodwill is sold.-
Exception 1.- One who sells the goodwill of a business may agree with the buyer to refrain from carrying on a similar business within specified local limits, as long as the buyer or any person deriving title to the goodwill from him carries on a like business therein, provided that such limits appear to the Court reasonable, having regard to the nature of the business.
Your situation clearly falls under the said section. These kinds of agreements are void in the eyes of the law. They are not enforceable even if you sign them. Do not worry; you may contact the police even if they try to force you to sign the agreement.
From India, New Delhi
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The provision you are looking for is section 27 of the Indian Contract Act. I am reproducing the same below.
Agreement in restraint of trade void.
27. Agreement in restraint of trade void.- Every agreement by which any one is restrained from exercising a lawful profession, trade, or business of any kind is, to that extent, void. Saving of agreement not to carry on the business of which goodwill is sold.-
Exception 1.- One who sells the goodwill of a business may agree with the buyer to refrain from carrying on a similar business within specified local limits, as long as the buyer or any person deriving title to the goodwill from him carries on a like business therein, provided that such limits appear to the Court reasonable, having regard to the nature of the business.
Your situation clearly falls under the said section. These kinds of agreements are void in the eyes of the law. They are not enforceable even if you sign them. Do not worry; you may contact the police even if they try to force you to sign the agreement.
From India, New Delhi
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HI All,
I am really very-very thankful for you . I have tried to get in mail statement from HE team
"That they will not give me relieving till the time I will not sign this bond . " But HR team is not sending in mail they are saying verbally. Still tomorrow is my last date .I will do the needful and suggested by the members. I am copying the whole mail chain I had with my HR manager. remember she haven't replied till the time.
-========
Hi Suhasini Mam,
I went to Intel in December 2011 . At that time AMI INDIA policy was that employee can’t join any of the client company till six months after returning from client company. I have already completed my six months after returning from onsite. Because Now later on this policy was changed and it was not informed to me and not asked to sign me before.
For a contract, the terms have to be mutually agreed upon, before the start of employment and not after the resignation. I put my resignation mail at 9 April 2013 and I got to know about this bond policy just two days before(May 13, 2013) my reliving date (May 15, 2013).
I have already completed my six months after returning from onsite , So I think I am not the right employee to ask this bond . I am not ready to sign this bond . Please let me know can I GET my reliving letter without signing this bond?
Regards
Alok
From: Alok Kumar Agarwal
Sent: Tuesday, May 14, 2013 11:52 AM
To: Rajesh S; Suhasini Ramakrishnan
Cc: Ramesh Raju; Vinod Kumar Mishra; 'alokal.123@gmail.com'; 'alok_electronics@yahoomail.com'
Subject: RE: Letter of Resignation
Hi Suhasini Mam/Rajesh,
As I have my last day of reliving at 15 may 2013 . Please give me some comments on below question as soon as possible.
Regards
Alok
From: Alok Kumar Agarwal
Sent: Monday, May 13, 2013 5:09 PM
To: Rajesh S
Cc: Suhasini Ramakrishnan; Ramesh Raju; Vinod Kumar Mishra; Alok Kumar Agarwal;
; 'alok_electronics@yahoomail.com'
Subject: RE: Letter of Resignation
Hi Rajesh,
Mean while I have some of the questions ..
a) When I went to onsite AMI INDIA policy was that we can’t join any of the client company till six months after returning from onsite. So xactly on which date this bond this bond came into the picture.
b) Is this indemnity bond shared by AMI-INDIA with the employees anywhere on EPMS? Please share the link with me also.
c) As I got the Format of indemnity bond , It looks like a onsite bond. In normal cases, any of the company can ask this type of BOND before sending the client at onsite. So why this bond was not asked to sign before sending me onsite ?
d) Why there was not any official intimation to me before my resignation?
e) Is it legal to ask any kind of bond after resignation?
Because at the time ( 11 december 2011) ,I went to onsite AMI-INDIA don’thave this policy so I think I will not come under this bond. Please let me know your comments here.
Regards
Alok
From: Alok Kumar Agarwal
Sent: Monday, May 13, 2013 3:03 PM
To: Rajesh S
Cc: Suhasini Ramakrishnan; Ramesh Raju; Vinod Kumar Mishra
Subject: RE: Letter of Resignation
Hi Rajesh,
Can you please let me know what is indemnity bond .Can you please share a softcopy with me for this bond.
Regards
alok
From: Rajesh S
Sent: Monday, May 13, 2013 2:56 PM
To: Alok Kumar Agarwal
Subject: Letter of Resignation
Dear Alok(8809)
Greetings!
It is unfortunate that you have decided to end your employment with us. Since you have decided to carry on we would like to familiarize you with the AMI separation policy in brief.
1. AMI requires all employees to serve notice period applicable to your band. You would be required to serve 45days starting from 09Apr2013. Your last working day would be 23May -2013. This notice period is not negotiable and request you not to ask for waiver. But your units Head approved for before 23rd May2013 So your last working day in AMI 15th May 2013
2. During the notice period, you are not eligible for CL or EL. Should you fall sick you need to submit a doctor’s certificate for your absence.
3. Should you have any financial dealing such as bond, salary etc please check with finance or HR and close it before your last working day.
4. HR will record your resignation in adrenalin one week from the last working day. Please work with the respective team members to ensure all your dues are closed at least one day in advance. Once we record your last date in Adrenalin it cannot be changed.
5. Please submit your proof of investments to finance one week before the last working day and you have to pay bond amount 75000.before reliving, and you have sign to indemnity bond.
For more clarity please refer to the Employee Handbook for more details.
Should you have any doubts please feel free to contact me or Senthil from the HR team.
Thanks ®ards
S.Rajesh
===========
Regards
Alok
From India, Chennai
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I am really very-very thankful for you . I have tried to get in mail statement from HE team
"That they will not give me relieving till the time I will not sign this bond . " But HR team is not sending in mail they are saying verbally. Still tomorrow is my last date .I will do the needful and suggested by the members. I am copying the whole mail chain I had with my HR manager. remember she haven't replied till the time.
-========
Hi Suhasini Mam,
I went to Intel in December 2011 . At that time AMI INDIA policy was that employee can’t join any of the client company till six months after returning from client company. I have already completed my six months after returning from onsite. Because Now later on this policy was changed and it was not informed to me and not asked to sign me before.
For a contract, the terms have to be mutually agreed upon, before the start of employment and not after the resignation. I put my resignation mail at 9 April 2013 and I got to know about this bond policy just two days before(May 13, 2013) my reliving date (May 15, 2013).
I have already completed my six months after returning from onsite , So I think I am not the right employee to ask this bond . I am not ready to sign this bond . Please let me know can I GET my reliving letter without signing this bond?
Regards
Alok
From: Alok Kumar Agarwal
Sent: Tuesday, May 14, 2013 11:52 AM
To: Rajesh S; Suhasini Ramakrishnan
Cc: Ramesh Raju; Vinod Kumar Mishra; 'alokal.123@gmail.com'; 'alok_electronics@yahoomail.com'
Subject: RE: Letter of Resignation
Hi Suhasini Mam/Rajesh,
As I have my last day of reliving at 15 may 2013 . Please give me some comments on below question as soon as possible.
Regards
Alok
From: Alok Kumar Agarwal
Sent: Monday, May 13, 2013 5:09 PM
To: Rajesh S
Cc: Suhasini Ramakrishnan; Ramesh Raju; Vinod Kumar Mishra; Alok Kumar Agarwal;
Subject: RE: Letter of Resignation
Hi Rajesh,
Mean while I have some of the questions ..
a) When I went to onsite AMI INDIA policy was that we can’t join any of the client company till six months after returning from onsite. So xactly on which date this bond this bond came into the picture.
b) Is this indemnity bond shared by AMI-INDIA with the employees anywhere on EPMS? Please share the link with me also.
c) As I got the Format of indemnity bond , It looks like a onsite bond. In normal cases, any of the company can ask this type of BOND before sending the client at onsite. So why this bond was not asked to sign before sending me onsite ?
d) Why there was not any official intimation to me before my resignation?
e) Is it legal to ask any kind of bond after resignation?
Because at the time ( 11 december 2011) ,I went to onsite AMI-INDIA don’thave this policy so I think I will not come under this bond. Please let me know your comments here.
Regards
Alok
From: Alok Kumar Agarwal
Sent: Monday, May 13, 2013 3:03 PM
To: Rajesh S
Cc: Suhasini Ramakrishnan; Ramesh Raju; Vinod Kumar Mishra
Subject: RE: Letter of Resignation
Hi Rajesh,
Can you please let me know what is indemnity bond .Can you please share a softcopy with me for this bond.
Regards
alok
From: Rajesh S
Sent: Monday, May 13, 2013 2:56 PM
To: Alok Kumar Agarwal
Subject: Letter of Resignation
Dear Alok(8809)
Greetings!
It is unfortunate that you have decided to end your employment with us. Since you have decided to carry on we would like to familiarize you with the AMI separation policy in brief.
1. AMI requires all employees to serve notice period applicable to your band. You would be required to serve 45days starting from 09Apr2013. Your last working day would be 23May -2013. This notice period is not negotiable and request you not to ask for waiver. But your units Head approved for before 23rd May2013 So your last working day in AMI 15th May 2013
2. During the notice period, you are not eligible for CL or EL. Should you fall sick you need to submit a doctor’s certificate for your absence.
3. Should you have any financial dealing such as bond, salary etc please check with finance or HR and close it before your last working day.
4. HR will record your resignation in adrenalin one week from the last working day. Please work with the respective team members to ensure all your dues are closed at least one day in advance. Once we record your last date in Adrenalin it cannot be changed.
5. Please submit your proof of investments to finance one week before the last working day and you have to pay bond amount 75000.before reliving, and you have sign to indemnity bond.
For more clarity please refer to the Employee Handbook for more details.
Should you have any doubts please feel free to contact me or Senthil from the HR team.
Thanks ®ards
S.Rajesh
===========
Regards
Alok
From India, Chennai
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Dear Alok,
Follow what Anonymous shared. Send your employer a registered letter stating the resignation and its acceptance details. Address the exit formalities and offer to pay for any notice period that you wouldn't serve. Put a date and a time within which if they do not respond, it would naturally stand as a closed case. Include the information that KamalKant shared in the letter, mentioning how the claim for the bond stands as valid. Have a lawyer proofread your letter before you mail it.
Remain as determined as you are now. When joining your new employer, mention that you were required to sign a bond after the resignation, which you denied as it is illegal. This will take care of your background verification. Show them this registered letter in case you receive no experience certificate. No further comments from your ex-employer would then have any impact.
Wish you all the best!
From India, Mumbai
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Follow what Anonymous shared. Send your employer a registered letter stating the resignation and its acceptance details. Address the exit formalities and offer to pay for any notice period that you wouldn't serve. Put a date and a time within which if they do not respond, it would naturally stand as a closed case. Include the information that KamalKant shared in the letter, mentioning how the claim for the bond stands as valid. Have a lawyer proofread your letter before you mail it.
Remain as determined as you are now. When joining your new employer, mention that you were required to sign a bond after the resignation, which you denied as it is illegal. This will take care of your background verification. Show them this registered letter in case you receive no experience certificate. No further comments from your ex-employer would then have any impact.
Wish you all the best!
From India, Mumbai
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Requesting or forcing an employee to sign a bond post tendering resignation will never stand. This is just a desperate attempt to stop your movement.
In case the company is not giving a relieving letter, meet a lawyer and proceed further as per his advice.
From India, Bangalore
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In case the company is not giving a relieving letter, meet a lawyer and proceed further as per his advice.
From India, Bangalore
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I want to remove comment 15 from this site.Please let me know the process, Alok
From India, Chennai
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From India, Chennai
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Bond of Employment.doc
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