Dear All, I am working in a construction company, and its products involve the production, laying, and installation of pipes. In our organization, the employer signs employment bonds with each and every on-roll employee and staff. Given that it is a construction company, most of the working employees are engineers by profession.
Prohibition under Section 27 of the Indian Contract Act, 1872
As per Section 27 of the Indian Contract Act, 1872, any agreement in restraint of trade and profession is prohibited. Such agreements are considered void under this section.
However, does this prohibition also apply to staff working in HR, Accounts, and Admin roles?
Kindly assist me in this regard.
Thank you.
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Prohibition under Section 27 of the Indian Contract Act, 1872
As per Section 27 of the Indian Contract Act, 1872, any agreement in restraint of trade and profession is prohibited. Such agreements are considered void under this section.
However, does this prohibition also apply to staff working in HR, Accounts, and Admin roles?
Kindly assist me in this regard.
Thank you.
Acknowledge(0)Amend(0)
Bonds are valid as long as the terms and conditions are reasonable and valid. Many companies provide training to their employees and spend money. It is quite natural for a company to seek to retain trained employees for a period of time or compensate if they choose to exit early. A blanket statement saying it is not applicable to HR or admin would be difficult to make without knowing the terms and conditions of the bonds.
From India, Pune
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3180From India, Pune
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Bonds in employment-nega tive covenant in contract of employment.pdf