Hi sir , I had joined the company in 11th June 2018 and signed the bond where the mention we have to serve the company for 3 years. At that time we are in a probation period. After 7 months 1/1/2019 I got a permanent position and signed another bond where the mention if I leave the company before 3 years then I need to pay 5 Lakhs amount and there is a notice period of 3 months. So, I have resigned on 29th March 2021 and serving 3 months' notice. Can you please help to know, do I need to pay any bond amount or if they have relieved me before the 90 days or before bond tenure. Then I need to pay the bond amount?
From India, Patna
From India, Patna
Employment Bond requiring the newly recruited, appointed, trained and confirmed employee after successful completion of the period of probation to serve the employer for a certain no of specified years failing which to pay a certain predetermined sum of money commensurate with the time and money spent on the training by the employer is, no doubt, valid under the Indian Contract Act,1872.
Here, to assess the value or cost of the training, it should be sort of personal grooming and enhancement of the employees rather than just a training that helps employees to perform better. Therefore, Courts would always look into the reasonability of the bond such as the nature of the job, the duration of the training, the amount of stipend or salary paid, the length of the compulsory service required, the preliquidated sum fixed in the bond in case of renunciation of the bond by the employee and the like. The bond will not be enforceable if it is either one sided, unconscionable or unreasonable.
For example, in Sicpa India Ltd v Manas Pratim Deb, where the employer sued the employee for leaving service within 2 years against the compulsory service period of 3 years and claimed the damages of Rs.2 lakh as agreed in the bond, the Delhi High Court awarded a compensation of Rs.22,532/= only by dividing the cost of training of Rs.67595/= by 3 since remaining period of service by the employee was one year only.
Therefore, the poster need not pay the sum of Rs.5 lakh as mentioned in the bond.
If his employer insists, he can negotiate with the employer for a lesser sum based on the actual cost of training incurred by the employer. If it fails he can go in for judicial remedy.
From India, Salem
6016Here, to assess the value or cost of the training, it should be sort of personal grooming and enhancement of the employees rather than just a training that helps employees to perform better. Therefore, Courts would always look into the reasonability of the bond such as the nature of the job, the duration of the training, the amount of stipend or salary paid, the length of the compulsory service required, the preliquidated sum fixed in the bond in case of renunciation of the bond by the employee and the like. The bond will not be enforceable if it is either one sided, unconscionable or unreasonable.
For example, in Sicpa India Ltd v Manas Pratim Deb, where the employer sued the employee for leaving service within 2 years against the compulsory service period of 3 years and claimed the damages of Rs.2 lakh as agreed in the bond, the Delhi High Court awarded a compensation of Rs.22,532/= only by dividing the cost of training of Rs.67595/= by 3 since remaining period of service by the employee was one year only.
Therefore, the poster need not pay the sum of Rs.5 lakh as mentioned in the bond.
If his employer insists, he can negotiate with the employer for a lesser sum based on the actual cost of training incurred by the employer. If it fails he can go in for judicial remedy.
From India, Salem
Thanks for your legally advice and knowledge sir. May I know, the how much time it will take if I go for judicial remedy. Does it 1 month or 6 month?
From India, Patna
From India, Patna
Normally it will take a long time as it is a Civil Litigation, Saurabh Kumar. Employers also know it. Therefore, on completion of notice period formalities, even if the employer refuses to relieve the employee on the ground of breach of contract, let the employee indicate his willingness to offer a proportionate and reasonable sum based on the cost of training, if any imparted to him and simply walk out on his own while keeping his prospective employer informed of the fact. In such a case the employer has either to drop the matter or to initiate a civil suit for recovery. Thus let the employee allow the employer to take to the legal course first in which case the employee will have a valid defense based on several case laws in this regard.
From India, Salem
From India, Salem
Community Support and Knowledge-base on business, career and organisational prospects and issues - Register and Log In to CiteHR and post your query, download formats and be part of a fostered community of professionals.
Employee agreement.doc