I have come across a typical situation wherein a person employed as a manager, with about 13-14 years of working experience, was appointed without a formal appointment letter. Instead, he was offered a bond under a service contract for joining. The bond has only one major clause stating that the manager will work for a period of x years. Under any circumstances, if the manager decides to make a change or quits the employment before the said period, the manager has to pay twice the CTC as damages along with 15% interest for any delay in payment.
The manager has not been sent for any special training, nor has any extra expenditure been incurred by the company on the manager's development.
I would like to know the legalities involved in this matter, as my gut feeling says that he should simply resign for better prospects and move out, giving 30 days' notice to the employer.
Please provide appropriate advice along with any case references, if available.
Regards,
Mishrajg@rediffmail.com
From India, Mumbai
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7The manager has not been sent for any special training, nor has any extra expenditure been incurred by the company on the manager's development.
I would like to know the legalities involved in this matter, as my gut feeling says that he should simply resign for better prospects and move out, giving 30 days' notice to the employer.
Please provide appropriate advice along with any case references, if available.
Regards,
Mishrajg@rediffmail.com
From India, Mumbai
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Hi,
Executing a bond for employment is void and cannot be enforceable. Only if special training is imparted to an employee, the cost of training, which includes the training fees, the salary paid to the employee on training days, traveling and boarding expenses of employees, etc., can be recovered from the employee. Otherwise, the bond is not enforceable.
The service conditions of employees are governed by two documents: a) Appointment Order, and b) Rules and Regulations applicable to the supervisory personnel (which has to be read and acknowledged by the employee)/Standing Orders in the case of workmen. In this case, the employee was also not issued with any Appointment Order. Hence, there should not be any problem in giving the resignation and getting relieved. If the resignation is not accepted, the same may please be mentioned in writing and it can be sent to the employer along with the resignation letter by registered post.
Thanks & Regards,
Kalyan R
98409 42232
From India, Madras
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Executing a bond for employment is void and cannot be enforceable. Only if special training is imparted to an employee, the cost of training, which includes the training fees, the salary paid to the employee on training days, traveling and boarding expenses of employees, etc., can be recovered from the employee. Otherwise, the bond is not enforceable.
The service conditions of employees are governed by two documents: a) Appointment Order, and b) Rules and Regulations applicable to the supervisory personnel (which has to be read and acknowledged by the employee)/Standing Orders in the case of workmen. In this case, the employee was also not issued with any Appointment Order. Hence, there should not be any problem in giving the resignation and getting relieved. If the resignation is not accepted, the same may please be mentioned in writing and it can be sent to the employer along with the resignation letter by registered post.
Thanks & Regards,
Kalyan R
98409 42232
From India, Madras
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Hi,
The bond cannot be executed as there is a contingency in the bond, with no specific event or date. It is an indefinite clause to the bond. Also, for performance of the contract, there should be some benefit to the employee from the company if he is thrown out of the company. From the overall view, the contract is one-sided and is not liable to be applicable.
So go ahead, sign the bond if you want the job. If problems arise, then challenge the same in court.
Thank you,
Octavious
From India, Mumbai
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The bond cannot be executed as there is a contingency in the bond, with no specific event or date. It is an indefinite clause to the bond. Also, for performance of the contract, there should be some benefit to the employee from the company if he is thrown out of the company. From the overall view, the contract is one-sided and is not liable to be applicable.
So go ahead, sign the bond if you want the job. If problems arise, then challenge the same in court.
Thank you,
Octavious
From India, Mumbai
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Hi,
If my offer letter states that I need to pay a portion of my salary and provide a 2-month notice period on either side if I leave the company before completing one year, and they have obtained my signature on this clause, am I legally obligated to make these payments if they include them in the final settlement paperwork? Please advise.
Thanks
From India, Hyderabad
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If my offer letter states that I need to pay a portion of my salary and provide a 2-month notice period on either side if I leave the company before completing one year, and they have obtained my signature on this clause, am I legally obligated to make these payments if they include them in the final settlement paperwork? Please advise.
Thanks
From India, Hyderabad
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How to Handle an Employee Resignation.doc