Please help me understand the legal repercussions of breaking the following service bond:
Appointment Letter
1. Your appointment will be as an Officer on probation with a monthly salary of Rs XYZ.
2. The company’s right in law to take any action against you and/or to recover any dues from you, and/or claim damages, if any, from you are expressly reserved. This shall not be affected or deemed to be waived by any reference to the service terms and conditions, the rules and regulations of the company, or otherwise.
3. At the time of your reporting, you shall mandatorily submit to the company a service bond (strictly as per the draft enclosed) to serve the company for a minimum period of two years, duly executed by you and solvent sureties on a stamp paper of Rs 100. The bond executed by you shall be duly notarized. Execution of the service bond shall automatically imply your acceptance of all the service terms and conditions as well as the rules and regulations of the company.
4. During or after serving the bond period, in the event of your resigning from the services, it shall be mandatory for you to serve a minimum of three months' notice in writing or pay an amount equivalent to three months' salary in lieu thereof to the company. The appointment letter and especially this clause shall be read in addition to and not in derogation of the service bond to be executed by you.
Service Bond
This service bond is executed by Mr. X in favor of the company Y on [date].
Whereas, Mr. X is selected by the company Y to be appointed as an officer on probation for a period of one year, on a basic salary of XYZ and other allowances as per rules in force from time to time.
Whereas Mr. X has agreed to serve the company for a minimum period of two years from the date of joining, which includes the probation period.
And whereas the company felt it necessary that Mr. X shall execute a bond in favor of the company for serving a period of two years from the date of joining, in view of the cost incurred by the company in respect of the process of selection, training, induction, etc.
And, whereas Mr. X has also agreed and undertaken to execute a service bond in favor of the company under the terms and conditions mentioned herein.
And whereas, Mr. A and Mr. B have agreed to stand as sureties for Mr. X. Both sureties have executed this bond with the knowledge that in the event Mr. X fails to fulfill the obligation under this bond, then both sureties jointly and/or severally indemnify and hold harmless the company for the loss/damage/expenses, etc. that the company has incurred or will incur due to the failure of Mr. X to fulfill the obligation under this bond.
Now this service bond witnesseth as herein under:
1. The company shall appoint Mr. X with effect from the date of joining on the basic salary of XYZ, in the grade of so-and-so, and such other allowances admissible under rules.
2. The said Mr. X agrees that he shall serve the company for a minimum period of two years.
3. The said Mr. X has agreed and hereby agrees and undertakes that in the event he leaves/resigns from the services of the company during the subsistence of this bond, and/or he makes it obligatory or necessary on the part of the company to terminate his services for any reason whatsoever, then he shall pay the company liquidated damages of Rs 2,00,000 or 3 months' gross salary, whichever is higher. Mr. X also agrees that the company shall have a lien on all amounts due to him from the company and the company shall be entitled to exercise the same in the event he fails to fulfill his obligation under this bond.
Regards
From India, undefined
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Appointment Letter
1. Your appointment will be as an Officer on probation with a monthly salary of Rs XYZ.
2. The company’s right in law to take any action against you and/or to recover any dues from you, and/or claim damages, if any, from you are expressly reserved. This shall not be affected or deemed to be waived by any reference to the service terms and conditions, the rules and regulations of the company, or otherwise.
3. At the time of your reporting, you shall mandatorily submit to the company a service bond (strictly as per the draft enclosed) to serve the company for a minimum period of two years, duly executed by you and solvent sureties on a stamp paper of Rs 100. The bond executed by you shall be duly notarized. Execution of the service bond shall automatically imply your acceptance of all the service terms and conditions as well as the rules and regulations of the company.
4. During or after serving the bond period, in the event of your resigning from the services, it shall be mandatory for you to serve a minimum of three months' notice in writing or pay an amount equivalent to three months' salary in lieu thereof to the company. The appointment letter and especially this clause shall be read in addition to and not in derogation of the service bond to be executed by you.
Service Bond
This service bond is executed by Mr. X in favor of the company Y on [date].
Whereas, Mr. X is selected by the company Y to be appointed as an officer on probation for a period of one year, on a basic salary of XYZ and other allowances as per rules in force from time to time.
Whereas Mr. X has agreed to serve the company for a minimum period of two years from the date of joining, which includes the probation period.
And whereas the company felt it necessary that Mr. X shall execute a bond in favor of the company for serving a period of two years from the date of joining, in view of the cost incurred by the company in respect of the process of selection, training, induction, etc.
And, whereas Mr. X has also agreed and undertaken to execute a service bond in favor of the company under the terms and conditions mentioned herein.
And whereas, Mr. A and Mr. B have agreed to stand as sureties for Mr. X. Both sureties have executed this bond with the knowledge that in the event Mr. X fails to fulfill the obligation under this bond, then both sureties jointly and/or severally indemnify and hold harmless the company for the loss/damage/expenses, etc. that the company has incurred or will incur due to the failure of Mr. X to fulfill the obligation under this bond.
Now this service bond witnesseth as herein under:
1. The company shall appoint Mr. X with effect from the date of joining on the basic salary of XYZ, in the grade of so-and-so, and such other allowances admissible under rules.
2. The said Mr. X agrees that he shall serve the company for a minimum period of two years.
3. The said Mr. X has agreed and hereby agrees and undertakes that in the event he leaves/resigns from the services of the company during the subsistence of this bond, and/or he makes it obligatory or necessary on the part of the company to terminate his services for any reason whatsoever, then he shall pay the company liquidated damages of Rs 2,00,000 or 3 months' gross salary, whichever is higher. Mr. X also agrees that the company shall have a lien on all amounts due to him from the company and the company shall be entitled to exercise the same in the event he fails to fulfill his obligation under this bond.
Regards
From India, undefined
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Please tell me the legal repercussions of breaking the following service bond:
Service Bond
This Service Bond is executed by Mr. X in favor of the company Y on [date]. Whereas, Mr. X is selected by the company Y to be appointed as an officer on probation for a period of one year, on a basic salary of XYZ and other allowances as per rules in force from time to time. Whereas Mr. X has agreed to serve the company for a minimum period of two years from the date of joining, which includes the probation period. And whereas the company felt it necessary that Mr. X shall execute a bond in favor of the company for serving a period of two years from the date of joining, in view of the cost incurred by the company in respect of the process of selection, training, induction, etc. And, whereas Mr. X has also agreed and undertaken to execute a service bond in favor of the company under terms and conditions mentioned herein. And whereas, Mr. A and Mr. B have agreed to stand as sureties for Mr. X. Both sureties have executed this bond with the knowledge that in the event Mr. X fails to fulfill obligations under this bond, then both sureties jointly and/or severally indemnify and hold harmless the company for the loss/damage/expenses, etc. that the company has incurred or will incur due to the failure of Mr. X to fulfill obligations under this bond.
Now this service bond witnesseth as herein under:
1. The company shall appoint Mr. X with effect from the date of joining on the basic salary of XYZ, in the grade of so-n-so, and such other allowances admissible under rules.
2. The said Mr. X agrees that he shall serve the company for a minimum period of two years.
3. The said Mr. X has agreed and hereby agrees and undertakes that in the event he leaves/resigns from the services of the company during the subsistence of this bond, and/or he makes it obligatory or necessary on the part of the company to terminate his services for any reason whatsoever, then he shall pay the company liquidated damages of Rs 2,00,000 or 3 months' gross salary, whichever is higher. Mr. X also agrees that the company shall have a lien on all amounts due to him from the company and the company shall be entitled to exercise the same in the event he fails to fulfill his obligations under this bond.
Appointment Letter
1. Your appointment will be as an Officer on probation on a monthly salary of Rs XYZ.
2. The company’s right in law to take any action against you and/or to recover the dues of the company, if any, from you, and/or claim damages, if any, from you are expressly reserved, and shall not be affected or deemed to be waived by any reference to the service terms and conditions and the rules and regulations of the company or otherwise.
3. At the time of your reporting, you shall mandatorily submit to the company a service bond (strictly as per the draft enclosed) to serve the company for a period of a minimum of two years, duly executed by you and solvent sureties on stamp paper of Rs 100. The bond executed by you shall be duly notarized. Execution of the service bond shall automatically imply your acceptance of all the service terms and conditions as also the rules and regulations of the company.
4. During or after serving the bond period, in the event of your resigning from the services, it shall be mandatory on your part to serve a minimum of three months' notice in writing in this regard, or pay an amount equivalent to three months' salary in lieu thereof to the company. The appointment letter and especially this clause shall be read in addition to and not in derogation of the service bond to be executed by you.
Regards
From India, undefined
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Service Bond
This Service Bond is executed by Mr. X in favor of the company Y on [date]. Whereas, Mr. X is selected by the company Y to be appointed as an officer on probation for a period of one year, on a basic salary of XYZ and other allowances as per rules in force from time to time. Whereas Mr. X has agreed to serve the company for a minimum period of two years from the date of joining, which includes the probation period. And whereas the company felt it necessary that Mr. X shall execute a bond in favor of the company for serving a period of two years from the date of joining, in view of the cost incurred by the company in respect of the process of selection, training, induction, etc. And, whereas Mr. X has also agreed and undertaken to execute a service bond in favor of the company under terms and conditions mentioned herein. And whereas, Mr. A and Mr. B have agreed to stand as sureties for Mr. X. Both sureties have executed this bond with the knowledge that in the event Mr. X fails to fulfill obligations under this bond, then both sureties jointly and/or severally indemnify and hold harmless the company for the loss/damage/expenses, etc. that the company has incurred or will incur due to the failure of Mr. X to fulfill obligations under this bond.
Now this service bond witnesseth as herein under:
1. The company shall appoint Mr. X with effect from the date of joining on the basic salary of XYZ, in the grade of so-n-so, and such other allowances admissible under rules.
2. The said Mr. X agrees that he shall serve the company for a minimum period of two years.
3. The said Mr. X has agreed and hereby agrees and undertakes that in the event he leaves/resigns from the services of the company during the subsistence of this bond, and/or he makes it obligatory or necessary on the part of the company to terminate his services for any reason whatsoever, then he shall pay the company liquidated damages of Rs 2,00,000 or 3 months' gross salary, whichever is higher. Mr. X also agrees that the company shall have a lien on all amounts due to him from the company and the company shall be entitled to exercise the same in the event he fails to fulfill his obligations under this bond.
Appointment Letter
1. Your appointment will be as an Officer on probation on a monthly salary of Rs XYZ.
2. The company’s right in law to take any action against you and/or to recover the dues of the company, if any, from you, and/or claim damages, if any, from you are expressly reserved, and shall not be affected or deemed to be waived by any reference to the service terms and conditions and the rules and regulations of the company or otherwise.
3. At the time of your reporting, you shall mandatorily submit to the company a service bond (strictly as per the draft enclosed) to serve the company for a period of a minimum of two years, duly executed by you and solvent sureties on stamp paper of Rs 100. The bond executed by you shall be duly notarized. Execution of the service bond shall automatically imply your acceptance of all the service terms and conditions as also the rules and regulations of the company.
4. During or after serving the bond period, in the event of your resigning from the services, it shall be mandatory on your part to serve a minimum of three months' notice in writing in this regard, or pay an amount equivalent to three months' salary in lieu thereof to the company. The appointment letter and especially this clause shall be read in addition to and not in derogation of the service bond to be executed by you.
Regards
From India, undefined
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Breaking a Service Bond: Considerations and Consequences
First of all, breaking a bond that you have knowingly entered into is not advisable. Moral values come into question when you are breaking a bond of service. Your new employer may also wonder if you will leave them as well if things get tough or if you receive a better offer.
Legally, you will be required to pay three months' gross pay in lieu of notice and bond money. If you give notice, then bond money will be payable if there is a breach of the terms and conditions governing the bond. The bond amount could potentially be contested in a court of law in terms of the quantum, but you will be forced to pay a reasonable amount for training, etc.
My unsolicited advice would be to avoid breaking bonds.
Regards
From India, Pune
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3180First of all, breaking a bond that you have knowingly entered into is not advisable. Moral values come into question when you are breaking a bond of service. Your new employer may also wonder if you will leave them as well if things get tough or if you receive a better offer.
Legally, you will be required to pay three months' gross pay in lieu of notice and bond money. If you give notice, then bond money will be payable if there is a breach of the terms and conditions governing the bond. The bond amount could potentially be contested in a court of law in terms of the quantum, but you will be forced to pay a reasonable amount for training, etc.
My unsolicited advice would be to avoid breaking bonds.
Regards
From India, Pune
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I am working with an insurance company, I am leaving the job within 20days of joining. Is there any rule for notice period for banks and insurance companies?
From India, undefined
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From India, undefined
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Understanding Employment Agreements and Notice Periods
Very often, both employers and employees enter into agreements, knowingly or unknowingly, which are void ab initio (i.e., illegal from the beginning). For instance, I can't enter into an agreement with someone promising to take them to the moon.
Finding or searching for a better opportunity is one's constitutional right. One cannot bind this right through any agreement. A three-month notice period is a vague term. Companies that include this sort of term (three-month notice period) in their agreements, do they ever consider that if every company or institution in the country binds their employees with this three-month term, will they be able to hire any experienced employees from the market for themselves? Will they wait for three months for their own needs? If not, how can they impose such terms?
In my view, it is completely contradictory and a violation of law and constitution. One cannot do whatever they like. Yes, in the case of legitimate investment behind the employee (which can be quantified and justifiably proved) on the part of the employer, that can be settled, but only up to a legitimate service period and not beyond that.
Regards
From India, Calcutta
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Very often, both employers and employees enter into agreements, knowingly or unknowingly, which are void ab initio (i.e., illegal from the beginning). For instance, I can't enter into an agreement with someone promising to take them to the moon.
Finding or searching for a better opportunity is one's constitutional right. One cannot bind this right through any agreement. A three-month notice period is a vague term. Companies that include this sort of term (three-month notice period) in their agreements, do they ever consider that if every company or institution in the country binds their employees with this three-month term, will they be able to hire any experienced employees from the market for themselves? Will they wait for three months for their own needs? If not, how can they impose such terms?
In my view, it is completely contradictory and a violation of law and constitution. One cannot do whatever they like. Yes, in the case of legitimate investment behind the employee (which can be quantified and justifiably proved) on the part of the employer, that can be settled, but only up to a legitimate service period and not beyond that.
Regards
From India, Calcutta
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If employee has left after 20 days,hardly any amount would have been spent on training etc. That portion of amount if it can be quantified can definitely be recovered from employee.
From India, Pune
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From India, Pune
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What does your appointment letter say. You must be on probation If you read the appointment letter it will have clause for resignation
From India, Chennai
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From India, Chennai
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I have been sent a notice from a lawyer (with signature but no seal) stating that he is sending this letter on behalf of the company (again, no sign or seal from the company), asking me to pay 3 lakhs within 7 days. However, there is no mention of 7 days from what date, and to which account the sum has to be deposited. I have two queries on this:
1. Is this a genuine notice? How do I confirm?
2. If yes, then what am I supposed to do? Because there is no proper mention of the method of paying back.
Also, it says that if I don't pay within 7 days, they will go to court and start criminal procedures against me.
From India, undefined
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1. Is this a genuine notice? How do I confirm?
2. If yes, then what am I supposed to do? Because there is no proper mention of the method of paying back.
Also, it says that if I don't pay within 7 days, they will go to court and start criminal procedures against me.
From India, undefined
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Consult a Lawyer for Contract Matters
You need to consult a lawyer who deals with contract matters. You have knowingly entered into a contract with the said terms of liquidated damages and notice period, etc. Breaking a contract involves two issues: moral and legal.
Legal Considerations for Breaking a Contract
You have left within 20 days of joining. As such, you have many points to contest the matter legally. The company cannot try to recover their administrative costs of hiring you. Yes, training costs can be quantified and may be recoverable if they are reasonable. Is the 3-month notice reasonable? But you have willingly accepted it. A lawyer can advise you on all these points.
Checking the Authority of the Sender
Probably, you need to check with the person who has sent you the letter regarding his locus standi in the matter. In your place, I would speak to the company and see whether they are amenable to reason (though sending the notice shows they are not). You have certain legal defenses, but are you ready for a court battle? Normally, all legal notices are full of language that is meant to overawe you, but read it calmly and, as I have repeatedly advised, take legal help.
Regards
From India, Pune
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You need to consult a lawyer who deals with contract matters. You have knowingly entered into a contract with the said terms of liquidated damages and notice period, etc. Breaking a contract involves two issues: moral and legal.
Legal Considerations for Breaking a Contract
You have left within 20 days of joining. As such, you have many points to contest the matter legally. The company cannot try to recover their administrative costs of hiring you. Yes, training costs can be quantified and may be recoverable if they are reasonable. Is the 3-month notice reasonable? But you have willingly accepted it. A lawyer can advise you on all these points.
Checking the Authority of the Sender
Probably, you need to check with the person who has sent you the letter regarding his locus standi in the matter. In your place, I would speak to the company and see whether they are amenable to reason (though sending the notice shows they are not). You have certain legal defenses, but are you ready for a court battle? Normally, all legal notices are full of language that is meant to overawe you, but read it calmly and, as I have repeatedly advised, take legal help.
Regards
From India, Pune
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Kami Export - Negative Covenant in Contract of Employment.pdf (1).pdf