Dear All, can we maintain the service agreement with employees mentioning that "if they break the agreement period, they will not receive the experience/relieving letters? If they want these letters, they should compensate with 6 months' salary." Will it be accepted by labor law?
Can someone provide me with the appropriate answer?
Thank you.
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Can someone provide me with the appropriate answer?
Thank you.
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Unconscionable Clauses in Contracts
In labor laws, there is nothing that goes against such a clause, but as per the Contract Act of 1872, such clauses are unconscionable wherein one party has an unreasonable advantage over the other. An unconscionable contract may not be illegal in terms of subject matter but instead is unenforceable due to the circumstances in which the contract was entered into by the parties. In other words, a perfectly legal contract might be considered unconscionable based on the way that one party obtained the consent of the other.
Case Study: Central Water Inland Corporation vs. Brijo Nath Ganguly
The classical case decided by the Supreme Court is the Central Water Inland Corporation vs. Brijo Nath Ganguly, decided on 6th April 1986 {1986 AIR 1571, 1986 SCR (2) 278}. It held that a clause providing for the termination of the services of a permanent employee by serving a three-month notice is arbitrary, unreasonable, opposed to public policy, and thus unconscionable. Such clauses are held to be unfair, arbitrary, and unconscionable.
From India, Mumbai
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1593In labor laws, there is nothing that goes against such a clause, but as per the Contract Act of 1872, such clauses are unconscionable wherein one party has an unreasonable advantage over the other. An unconscionable contract may not be illegal in terms of subject matter but instead is unenforceable due to the circumstances in which the contract was entered into by the parties. In other words, a perfectly legal contract might be considered unconscionable based on the way that one party obtained the consent of the other.
Case Study: Central Water Inland Corporation vs. Brijo Nath Ganguly
The classical case decided by the Supreme Court is the Central Water Inland Corporation vs. Brijo Nath Ganguly, decided on 6th April 1986 {1986 AIR 1571, 1986 SCR (2) 278}. It held that a clause providing for the termination of the services of a permanent employee by serving a three-month notice is arbitrary, unreasonable, opposed to public policy, and thus unconscionable. Such clauses are held to be unfair, arbitrary, and unconscionable.
From India, Mumbai
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Employee Experience.doc