Dear All,
One of my friends is working in a cooperative bank in the designation of the administrative manager. He was issued an appointment letter during his joining, stating that he has to agree to the terms of the agreement, which were not specified. He was informed that he would be placed under probation for a period of one year, with a possibility of further extension based on performance. However, during the formalities, he was made to sign a contract for five years, which was one-sided. The contract stated that he would have to forego or pay three months' salary with three months' notice and 2 lakhs if he left before the agreement period. Unfortunately, he had no choice but to sign the agreement as he had already resigned from his previous company.
After a year, his contract was extended for an additional year, and later for two more years, totaling three years of service. Despite assurances of being made permanent after one year, he is still under a contract agreement.
If he decides to leave, they are now stating that he must provide three months' notice without pay and pay 2 lakhs as per the agreement terms.
Several questions arise:
1) Is this type of agreement valid in law?
2) What are the consequences if he leaves the bank?
3) The bank is unwilling to provide a relieving or experience certificate.
4) He is unable to include this experience on his CV without a relieving or experience certificate.
Can the experts guide him on what steps he should take next?
From India, Hyderabad
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One of my friends is working in a cooperative bank in the designation of the administrative manager. He was issued an appointment letter during his joining, stating that he has to agree to the terms of the agreement, which were not specified. He was informed that he would be placed under probation for a period of one year, with a possibility of further extension based on performance. However, during the formalities, he was made to sign a contract for five years, which was one-sided. The contract stated that he would have to forego or pay three months' salary with three months' notice and 2 lakhs if he left before the agreement period. Unfortunately, he had no choice but to sign the agreement as he had already resigned from his previous company.
After a year, his contract was extended for an additional year, and later for two more years, totaling three years of service. Despite assurances of being made permanent after one year, he is still under a contract agreement.
If he decides to leave, they are now stating that he must provide three months' notice without pay and pay 2 lakhs as per the agreement terms.
Several questions arise:
1) Is this type of agreement valid in law?
2) What are the consequences if he leaves the bank?
3) The bank is unwilling to provide a relieving or experience certificate.
4) He is unable to include this experience on his CV without a relieving or experience certificate.
Can the experts guide him on what steps he should take next?
From India, Hyderabad
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Dear Querier,
You mentioned that your friend was issued an appointment letter, and later he was made to sign a contract for five years with certain stringent conditions.
The reply to your queries is given as follows:
1) Is this type of agreement valid in law? This type of agreement or contract is often signed to create psychological fear in the minds of employees. However, in practice, they are difficult to implement as they tend to be one-sided in nature.
2) If he leaves the bank, what will be the consequences? They will issue him a letter citing the violation of the terms and conditions of the contract. Additionally, they will not provide him with a relieving or experience certificate.
3) They are not willing to provide a relieving or experience certificate. Certainly, as mentioned in my earlier response.
4) He cannot show this experience on his CV as they are not willing to provide a relieving or experience certificate. You are correct, or he will need to explain the circumstances to the new employer to gain their confidence.
BS Kalsi,
Member Since August 2011
From India, Mumbai
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465You mentioned that your friend was issued an appointment letter, and later he was made to sign a contract for five years with certain stringent conditions.
The reply to your queries is given as follows:
1) Is this type of agreement valid in law? This type of agreement or contract is often signed to create psychological fear in the minds of employees. However, in practice, they are difficult to implement as they tend to be one-sided in nature.
2) If he leaves the bank, what will be the consequences? They will issue him a letter citing the violation of the terms and conditions of the contract. Additionally, they will not provide him with a relieving or experience certificate.
3) They are not willing to provide a relieving or experience certificate. Certainly, as mentioned in my earlier response.
4) He cannot show this experience on his CV as they are not willing to provide a relieving or experience certificate. You are correct, or he will need to explain the circumstances to the new employer to gain their confidence.
BS Kalsi,
Member Since August 2011
From India, Mumbai
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