Hi guys, I recently left my organization due to some salary-related issues (salary deferment and delayed payment) and received an offer from another MNC. They attempted to retain me, but I was dissatisfied with the company's policies and salary processing. I made two mistakes during a call with the company's HR and MD while they were trying to retain me:
1. I candidly disclosed the reasons for my resignation (their policy and salary issues).
2. I mentioned the name of the MNC from which I received the offer (the MD asked me to trust him, but later he disclosed to everyone where I had received the offer from).
I completed a 90-day notice period, provided knowledge transfer and training, as well as handed over all company assets.
It has been a week since my Last Working Day (LWD), and now my company is refusing to provide me with a relieving and experience letter, instead asking me to sign an Indemnity Bond post my departure. This bond contains numerous clauses that differ from what was stated in my original offer letter. They have stipulated in the Indemnity Bond that I cannot join or be employed by any of their clients, sister companies, allied companies, or clients of their clients, either directly or indirectly. Additionally, they are withholding two months' worth of salary.
Am I obligated to sign such an Indemnity Bond after terminating my employment? Is it legal for them to withhold my relieving/experience letter and Full and Final Settlement (F&F) if I refuse to sign the bond following the termination of my employment?
From India
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1. I candidly disclosed the reasons for my resignation (their policy and salary issues).
2. I mentioned the name of the MNC from which I received the offer (the MD asked me to trust him, but later he disclosed to everyone where I had received the offer from).
I completed a 90-day notice period, provided knowledge transfer and training, as well as handed over all company assets.
It has been a week since my Last Working Day (LWD), and now my company is refusing to provide me with a relieving and experience letter, instead asking me to sign an Indemnity Bond post my departure. This bond contains numerous clauses that differ from what was stated in my original offer letter. They have stipulated in the Indemnity Bond that I cannot join or be employed by any of their clients, sister companies, allied companies, or clients of their clients, either directly or indirectly. Additionally, they are withholding two months' worth of salary.
Am I obligated to sign such an Indemnity Bond after terminating my employment? Is it legal for them to withhold my relieving/experience letter and Full and Final Settlement (F&F) if I refuse to sign the bond following the termination of my employment?
From India
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This is only an arm-twisting tactic and is exploiting your lesser bargaining power. Are you joining any of the forbidden categories of organizations? An indemnity bond is only a categorical assurance, and since the management is aware of your new employer, is there any issue in giving it?
It is not only illegal but also unethical to withhold the F&F settlement. You can also threaten them to expose the organization in the media.
From India, Mumbai
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1593It is not only illegal but also unethical to withhold the F&F settlement. You can also threaten them to expose the organization in the media.
From India, Mumbai
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Hi,
Thank you for your reply.
As per my offer letter, I am not forbidden to join the company from which I have an offer as it is not a direct client. However, if I sign this Indemnity Bond, it might fall into such a category.
I have an offer from Company X, which falls under an umbrella that has many entities, all of which are legally separated and located in different geographical regions. One of such entities, Company Y, is a client of my previous organization, Z.
According to my offer letter, I am not supposed to join any of the direct clients of my current company, Z, which I am not joining in this case.
As per this new Indemnity Bond that my previous organization is asking me to sign after my termination, I am not supposed to join any of their clients, or its sister, or its allied company, or its client's client directly or indirectly. It can be said that Company X & Y are sister companies although legally separated.
I have informed HR that I do not agree with all the clauses mentioned in the Indemnity Bond and am not willing to sign any bond post-termination of my employment.
However, they are asking me to acknowledge and provide consent to this bond to proceed further with providing the relieving & experience letter.
From India
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Thank you for your reply.
As per my offer letter, I am not forbidden to join the company from which I have an offer as it is not a direct client. However, if I sign this Indemnity Bond, it might fall into such a category.
I have an offer from Company X, which falls under an umbrella that has many entities, all of which are legally separated and located in different geographical regions. One of such entities, Company Y, is a client of my previous organization, Z.
According to my offer letter, I am not supposed to join any of the direct clients of my current company, Z, which I am not joining in this case.
As per this new Indemnity Bond that my previous organization is asking me to sign after my termination, I am not supposed to join any of their clients, or its sister, or its allied company, or its client's client directly or indirectly. It can be said that Company X & Y are sister companies although legally separated.
I have informed HR that I do not agree with all the clauses mentioned in the Indemnity Bond and am not willing to sign any bond post-termination of my employment.
However, they are asking me to acknowledge and provide consent to this bond to proceed further with providing the relieving & experience letter.
From India
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Every company is different, and a company is distinct from its shareholders. Since you did not have any direct dealings with either X or Y, nor has the former company provided you with a list of companies that you cannot join for this reason, you are not prohibited from joining the new company. Are they in the same line of business? If not, then there cannot be any legal barrier to you taking up a job in the new company.
From India, Mumbai
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From India, Mumbai
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Indemnity Bond - Format.doc
Legal Clarification on Non-Performer Termination, Project Based Appointment Letter, Setting UP .pdf