Hi,
With reference to the above, I would like to bring a few points to your notice and seek possible suggestions.
I am employed with an IT company in Bangalore, having signed a bond/service agreement letter for 2 years. I started working with this company in January 09. Initially, everything was going well, and I was working day and night to meet the necessary deadlines. However, things started becoming difficult as time went on. Here are a few incidents that occurred:
1. Firstly, they reduced my salary to almost 30% of what was offered at the time of joining the organization.
2. When I inquired about this, it was explained that this action was due to the recession, which I found untrue. All other employees either received a hike or no change, but in my case, this action was taken.
3. As time passed, my supervisor began ill-treating me in various ways. According to the policy, employees could claim cab/taxi expenses after office hours, especially late at night. However, when I utilized this service and submitted a claim, he accused me of being late due to not completing tasks within the scheduled time, which was not the case for other employees.
4. After office hours, snacks were provided to employees staying back. Although I also availed of this benefit, my supervisor accused me of staying for snacks rather than work. This incident occurred in March 09, just three months after joining the organization.
5. The situation worsened as my supervisor started insulting me in front of my team members, labeling me as incapable. This led other colleagues, even juniors, to follow suit. Feeling distressed, I requested some days of unpaid leave from my supervisor, but he misinterpreted it as a plan to leave and involved a corporate lawyer, who threatened me. This incident occurred in September 09.
In October 09, when everyone else received their salaries, I didn't. The reason given was that I needed a guarantor to complete the bonding process. I explained that only my wife could sign as a guarantor, but they insisted on a professional guarantor.
After much effort, I managed to get my salary credited in October 2009. However, despite my attempts, I couldn't find a professional guarantor, leading to non-payment of my salary in November 09. Frustrated, I demanded either my salary or release from duty. Threats of legal action were made, causing further distress.
Upon reviewing the agreement, I found a clause stating that any changes in the agreement or company policy render the agreement void. I have requested to be released from the organization or have a new bond as per the agreement.
My questions are:
1. Is this clause valid?
2. Considering the changes in salary and policies post-agreement, how should I proceed legally?
I would have been willing to complete my bond period, but the circumstances have forced me to make this decision. I would appreciate any legal advice on this matter.
Thanks,
Sanji.
From India, Bangalore
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1With reference to the above, I would like to bring a few points to your notice and seek possible suggestions.
I am employed with an IT company in Bangalore, having signed a bond/service agreement letter for 2 years. I started working with this company in January 09. Initially, everything was going well, and I was working day and night to meet the necessary deadlines. However, things started becoming difficult as time went on. Here are a few incidents that occurred:
1. Firstly, they reduced my salary to almost 30% of what was offered at the time of joining the organization.
2. When I inquired about this, it was explained that this action was due to the recession, which I found untrue. All other employees either received a hike or no change, but in my case, this action was taken.
3. As time passed, my supervisor began ill-treating me in various ways. According to the policy, employees could claim cab/taxi expenses after office hours, especially late at night. However, when I utilized this service and submitted a claim, he accused me of being late due to not completing tasks within the scheduled time, which was not the case for other employees.
4. After office hours, snacks were provided to employees staying back. Although I also availed of this benefit, my supervisor accused me of staying for snacks rather than work. This incident occurred in March 09, just three months after joining the organization.
5. The situation worsened as my supervisor started insulting me in front of my team members, labeling me as incapable. This led other colleagues, even juniors, to follow suit. Feeling distressed, I requested some days of unpaid leave from my supervisor, but he misinterpreted it as a plan to leave and involved a corporate lawyer, who threatened me. This incident occurred in September 09.
In October 09, when everyone else received their salaries, I didn't. The reason given was that I needed a guarantor to complete the bonding process. I explained that only my wife could sign as a guarantor, but they insisted on a professional guarantor.
After much effort, I managed to get my salary credited in October 2009. However, despite my attempts, I couldn't find a professional guarantor, leading to non-payment of my salary in November 09. Frustrated, I demanded either my salary or release from duty. Threats of legal action were made, causing further distress.
Upon reviewing the agreement, I found a clause stating that any changes in the agreement or company policy render the agreement void. I have requested to be released from the organization or have a new bond as per the agreement.
My questions are:
1. Is this clause valid?
2. Considering the changes in salary and policies post-agreement, how should I proceed legally?
I would have been willing to complete my bond period, but the circumstances have forced me to make this decision. I would appreciate any legal advice on this matter.
Thanks,
Sanji.
From India, Bangalore
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Sanji,
As per Indian Labour Laws, bonds are illegal in India. They cannot be executed. You can take your organization to law. There are some labour laws that protect the rights of employees. You can file a case with the Office of the Labour Commissioner. For your reference, I'm attaching an extract of some laws introduced to benefit employees.
Hope things get better for you.
From India, Delhi
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As per Indian Labour Laws, bonds are illegal in India. They cannot be executed. You can take your organization to law. There are some labour laws that protect the rights of employees. You can file a case with the Office of the Labour Commissioner. For your reference, I'm attaching an extract of some laws introduced to benefit employees.
Hope things get better for you.
From India, Delhi
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Hi Sahmina,
Thanks for the useful information provided by you. I just didn't get one piece of information. Despite the fact that bond/service agreement practice is illegal, why are so many organizations still implementing it? Is there no law to curb this?
Also, I have one more question to ask. What action can be taken if my company does not provide me with a relieving letter? Are there any laws or clauses that can be handy to obtain it from them?
Regards,
Sanji.
From India, Bangalore
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Thanks for the useful information provided by you. I just didn't get one piece of information. Despite the fact that bond/service agreement practice is illegal, why are so many organizations still implementing it? Is there no law to curb this?
Also, I have one more question to ask. What action can be taken if my company does not provide me with a relieving letter? Are there any laws or clauses that can be handy to obtain it from them?
Regards,
Sanji.
From India, Bangalore
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it very un ethical what the compny is doing u can claim against the company in the court .
From India, Hyderabad
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From India, Hyderabad
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Dear Seniors,
This is really a very bad practice that is going on in the industry. One of my friends is also facing the same problem. I am mentioning a few lines of agreement: after his resignation, the company is not relieving him nor giving him his full and final payment. Also, he has been threatened that they will sue him and they are planning lots of cases, even under Section 420, to prove deceit or fraud. Now, my query is, first, how can a person keep themselves safe from these individuals? Second, how can we teach lessons to these organizations? Lastly, today, corporates are talking about CSR (Corporate Social Responsibility), and on the other hand, they are engaging in such activities. Please advise on how we can raise awareness among all corporates and employees to stop these bad practices.
That the first party agrees to work with the second party for at least 3 years and shall not leave the services of the second party during the next three years, except in the case of continued ill-health. In such a case, the first party can leave the company by providing three months' prior notice or payment in lieu thereof.
That the first party agrees that in case he leaves the company during this agreement's period, he undertakes to refund 50% of the gross emoluments paid to him during the period he remains in service under this agreement. Additionally, he shall compensate for any other damages or losses suffered by the second party. The refund amount shall be determined by the second party and is not open to any questioning by the first party.
Regards,
Ameet
From India, Chandigarh
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This is really a very bad practice that is going on in the industry. One of my friends is also facing the same problem. I am mentioning a few lines of agreement: after his resignation, the company is not relieving him nor giving him his full and final payment. Also, he has been threatened that they will sue him and they are planning lots of cases, even under Section 420, to prove deceit or fraud. Now, my query is, first, how can a person keep themselves safe from these individuals? Second, how can we teach lessons to these organizations? Lastly, today, corporates are talking about CSR (Corporate Social Responsibility), and on the other hand, they are engaging in such activities. Please advise on how we can raise awareness among all corporates and employees to stop these bad practices.
That the first party agrees to work with the second party for at least 3 years and shall not leave the services of the second party during the next three years, except in the case of continued ill-health. In such a case, the first party can leave the company by providing three months' prior notice or payment in lieu thereof.
That the first party agrees that in case he leaves the company during this agreement's period, he undertakes to refund 50% of the gross emoluments paid to him during the period he remains in service under this agreement. Additionally, he shall compensate for any other damages or losses suffered by the second party. The refund amount shall be determined by the second party and is not open to any questioning by the first party.
Regards,
Ameet
From India, Chandigarh
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Sanji,
Your understanding of the extract you provided from your bond is not correct. That paragraph is not protecting you. It is protecting the company and upholding the rest of the contract (in case one clause is deemed invalid, the rest of the contract will still be valid). So, do yourself a favor. Go to a Labor Lawyer with the "bond" you have signed. Have them review it. Find out how you can protect yourself. And serve a lawyer notice to the company to pay up their dues or relieve you from your job. Your "bond" in bits and pieces does not make much sense. It has to be read and understood in its entirety.
Bonded Labor was abolished decades ago in India. There is no such thing as bonded labor. No company can force their employees to sign a bond that can truly be enforced in a court of law.
That said, in the past two decades, the companies have gotten a little smarter. They frame the legal language in their "bond" such that:
a. It usually doesn't mention the word "bond" anywhere (because it is illegal). It says "Service Agreement."
b. It outlines a scenario where, if the employee leaves the company within said period (2 or 3 or however many number of years), the company would be incurring losses in terms of lost business, lost reputation with the customers, trade secrets, etc., or it will take the company 2 or 3 years (or whatever the number is) to benefit from the employee based on the investment they have done in the employee.
It is difficult for even such "bonds" to hold up in courts because:
1. The company/employer has to prove (burden of proof is on them) with evidence that the company actually incurred losses because of the employee (it is not enough for a lawyer to stand in court and shout – my client incurred a HUGE loss. The court needs proof), and/or
2. The company/employer has to prove with evidence that they have actually "invested" money in the employee (again, a lawyer standing in court and shouting "My client invested $50,000 in this employee" is not enough. They need proof – bills, etc.).
Knowing this fully well, why do company lawyers and HR have their new employees execute such fake "bonds"? It's plain and simple – cashing in on the need and ignorance of the job seeker. As a job seeker, you may be compelled to sign such a bond (because you NEED the job). And once you sign it, you are afraid that they will make your life miserable (because you are not fully aware of your rights as an employee), take you to court, will not let you get employment elsewhere, etc. They try to cash in on your "fear" and "need."
For all you job seekers/employees out there, I have two suggestions, one for those who are currently in this nasty situation (i.e., employees), and one for those who have the potential of landing in such a situation (i.e., job seekers).
1. If you are currently in this situation, take the contract/bond you signed to a labor lawyer. Explain to him/her the situation, have them review the "bond," and tell you the validity of the bond and how you can protect yourself.
2. If you are currently seeking a job and are asked to sign such a bond, don't just read it, think that you know English very well and you understand it, and sign it. Legal Language IS NOT ENGLISH. It is a completely different language that resembles English. So, please do yourself a favor, take it to a Labor Lawyer, have them review it, ask questions regarding the validity of the service agreement and how you can protect yourself from it. Do these BEFORE you sign any such bonds.
Hopefully, you will have a more peaceful life.
All the best.
Regards,
- Som G
From United States, Woodinville
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Your understanding of the extract you provided from your bond is not correct. That paragraph is not protecting you. It is protecting the company and upholding the rest of the contract (in case one clause is deemed invalid, the rest of the contract will still be valid). So, do yourself a favor. Go to a Labor Lawyer with the "bond" you have signed. Have them review it. Find out how you can protect yourself. And serve a lawyer notice to the company to pay up their dues or relieve you from your job. Your "bond" in bits and pieces does not make much sense. It has to be read and understood in its entirety.
Bonded Labor was abolished decades ago in India. There is no such thing as bonded labor. No company can force their employees to sign a bond that can truly be enforced in a court of law.
That said, in the past two decades, the companies have gotten a little smarter. They frame the legal language in their "bond" such that:
a. It usually doesn't mention the word "bond" anywhere (because it is illegal). It says "Service Agreement."
b. It outlines a scenario where, if the employee leaves the company within said period (2 or 3 or however many number of years), the company would be incurring losses in terms of lost business, lost reputation with the customers, trade secrets, etc., or it will take the company 2 or 3 years (or whatever the number is) to benefit from the employee based on the investment they have done in the employee.
It is difficult for even such "bonds" to hold up in courts because:
1. The company/employer has to prove (burden of proof is on them) with evidence that the company actually incurred losses because of the employee (it is not enough for a lawyer to stand in court and shout – my client incurred a HUGE loss. The court needs proof), and/or
2. The company/employer has to prove with evidence that they have actually "invested" money in the employee (again, a lawyer standing in court and shouting "My client invested $50,000 in this employee" is not enough. They need proof – bills, etc.).
Knowing this fully well, why do company lawyers and HR have their new employees execute such fake "bonds"? It's plain and simple – cashing in on the need and ignorance of the job seeker. As a job seeker, you may be compelled to sign such a bond (because you NEED the job). And once you sign it, you are afraid that they will make your life miserable (because you are not fully aware of your rights as an employee), take you to court, will not let you get employment elsewhere, etc. They try to cash in on your "fear" and "need."
For all you job seekers/employees out there, I have two suggestions, one for those who are currently in this nasty situation (i.e., employees), and one for those who have the potential of landing in such a situation (i.e., job seekers).
1. If you are currently in this situation, take the contract/bond you signed to a labor lawyer. Explain to him/her the situation, have them review the "bond," and tell you the validity of the bond and how you can protect yourself.
2. If you are currently seeking a job and are asked to sign such a bond, don't just read it, think that you know English very well and you understand it, and sign it. Legal Language IS NOT ENGLISH. It is a completely different language that resembles English. So, please do yourself a favor, take it to a Labor Lawyer, have them review it, ask questions regarding the validity of the service agreement and how you can protect yourself from it. Do these BEFORE you sign any such bonds.
Hopefully, you will have a more peaceful life.
All the best.
Regards,
- Som G
From United States, Woodinville
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Hi Som,
Thanks for providing me your valuable suggestion and feed back. It was nice that you corrected me with the understanding of my bond terms with the information i have provided.
As mentioned by you I can take to court, but will there be any kind of difficulty that arise after taking up to court in terms of getting me another employment opportunity. As what i know taking this to court will not give immmediate relief or no specified dead line, it may prolong for long. It will be a difficult for us to attend the court paying lawyer the fees and all other things without a job. If you have any other thought about how it can be managed, it will be great.
Regards
Sanji
From India, Bangalore
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Thanks for providing me your valuable suggestion and feed back. It was nice that you corrected me with the understanding of my bond terms with the information i have provided.
As mentioned by you I can take to court, but will there be any kind of difficulty that arise after taking up to court in terms of getting me another employment opportunity. As what i know taking this to court will not give immmediate relief or no specified dead line, it may prolong for long. It will be a difficult for us to attend the court paying lawyer the fees and all other things without a job. If you have any other thought about how it can be managed, it will be great.
Regards
Sanji
From India, Bangalore
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(Fact Checked)-The user reply contains accurate information regarding the legal aspects of service agreements and bonds in the context of labor laws in India. The advice provided aligns with the current legal framework and practices. (1 Acknowledge point)
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Sanji,
I don’t believe I suggested you to go to court. Rather, my suggestion was to discuss this matter with a lawyer and have your lawyer serve them a legal notice. Serving legal notice is very different from actually taking someone to court (you are just threatening to take them to court – what they are doing to you, you are doing it back to them with the help of your own lawyer).
The legal notice would say something to the effect of
1.Give me my unpaid salary and keep me in employment
2.Give me my unpaid salary and relieve me from the job without any further adverse action
3.Meet me in court and explain to a judge as to why you are doing what you are doing
Now, keep in mind that going to court will be at least as expensive to the company as it would be for you (if not more). I believe that they don’t really want to go to court. If they did, then they would have already gone to court.
So, if you can find a good lawyer, get him/her to write a letter to your current employer, I am willing to believe that they will listen and give you what you deserve. Writing a letter would not cost you much (I don’t think). You may want to contact a lawyer and ask them what their consultation fees is.
Secondly, will this affect your future job prospects with other companies? I don’t really know. If I were your hiring manager, I would not care much, because what the company is doing is unethical and unprofessional. You are standing up for yourself. There may be companies out there that would care (and not want to hire you). But then, India is a big country and there are tons of companies out there. I don’t think this will be a problem.
All the best.
-Som G
From United States, Woodinville
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I don’t believe I suggested you to go to court. Rather, my suggestion was to discuss this matter with a lawyer and have your lawyer serve them a legal notice. Serving legal notice is very different from actually taking someone to court (you are just threatening to take them to court – what they are doing to you, you are doing it back to them with the help of your own lawyer).
The legal notice would say something to the effect of
1.Give me my unpaid salary and keep me in employment
2.Give me my unpaid salary and relieve me from the job without any further adverse action
3.Meet me in court and explain to a judge as to why you are doing what you are doing
Now, keep in mind that going to court will be at least as expensive to the company as it would be for you (if not more). I believe that they don’t really want to go to court. If they did, then they would have already gone to court.
So, if you can find a good lawyer, get him/her to write a letter to your current employer, I am willing to believe that they will listen and give you what you deserve. Writing a letter would not cost you much (I don’t think). You may want to contact a lawyer and ask them what their consultation fees is.
Secondly, will this affect your future job prospects with other companies? I don’t really know. If I were your hiring manager, I would not care much, because what the company is doing is unethical and unprofessional. You are standing up for yourself. There may be companies out there that would care (and not want to hire you). But then, India is a big country and there are tons of companies out there. I don’t think this will be a problem.
All the best.
-Som G
From United States, Woodinville
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Dear Som,
A suggestion from Som is advisable for the situation. A contract is binding unless the employer relieves you of the obligation from the bond, which no employer will do. Cases in court are always founded on breach by the employee and legal action by the employer.
With regards,
E-mail:
From India, Bangalore
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A suggestion from Som is advisable for the situation. A contract is binding unless the employer relieves you of the obligation from the bond, which no employer will do. Cases in court are always founded on breach by the employee and legal action by the employer.
With regards,
E-mail:
From India, Bangalore
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Hi Som,
Further to the conversation I had with you on this site, I have a few things that I would like to update. As suggested by you, I approached the legal advisor and sought his opinion. I have issued a legal notice to them. However, they didn't respond to that. My legal advisor has sent one more notice, giving them one week's time, and they still haven't responded. What action do I have to take next in case they are not responding? Will the law support my cause on this issue?
Kindly advise.
Regards,
Sanji
From India, Bangalore
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Further to the conversation I had with you on this site, I have a few things that I would like to update. As suggested by you, I approached the legal advisor and sought his opinion. I have issued a legal notice to them. However, they didn't respond to that. My legal advisor has sent one more notice, giving them one week's time, and they still haven't responded. What action do I have to take next in case they are not responding? Will the law support my cause on this issue?
Kindly advise.
Regards,
Sanji
From India, Bangalore
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(Fact Checked)-The user reply contains accurate information regarding the legal aspects of service agreements and bonds in the employment context in India. The advice provided aligns with the current legal framework and best practices. (1 Acknowledge point)