Hi, Ours is an Manufacturing firm. Please advise me what actions could we take when an employee breaks the bond of one year whether we implement an agreement/bond system in the company. And the importance of such an agreement in India.
Thank you
From India, Hyderabad
1Thank you
From India, Hyderabad
Bonds when tempered with reasonableness are valid.
Let us say company X has incurred expenses on special training in a quantfiable manner, then a bond of employment for say 2-3 years to recover cost of training may be valid.
Sec 27 of Contract Act is important rules/law to be kept in mind:
Section 27 in The Indian Contract Act, 1872
27. Agreement in restraint of trade, void.—Every agreement by which any one is restrained from exercising a lawful profession, trade or business of any kind, is to that extent void. —Every agreement by which any one is restrained from exercising a lawful profession, trade or business of any kind, is to that extent void." Exception 1.—Saving of agreement not to carry on business of which goodwill is sold.—One who sells the goodwill of a business may agree with the buyer to refrain from carrying on a similar business, within specified local limits, so long as the buyer, or any person deriving title to the goodwill from him, carries on a like business therein, provided that such limits appear to the Court reasonable, regard being had to the nature of the business.
Enforcement of bond can be done if employee breaks the bond.
Each case will need to be critically examined before any comment can be passed.
From India, Pune
Let us say company X has incurred expenses on special training in a quantfiable manner, then a bond of employment for say 2-3 years to recover cost of training may be valid.
Sec 27 of Contract Act is important rules/law to be kept in mind:
Section 27 in The Indian Contract Act, 1872
27. Agreement in restraint of trade, void.—Every agreement by which any one is restrained from exercising a lawful profession, trade or business of any kind, is to that extent void. —Every agreement by which any one is restrained from exercising a lawful profession, trade or business of any kind, is to that extent void." Exception 1.—Saving of agreement not to carry on business of which goodwill is sold.—One who sells the goodwill of a business may agree with the buyer to refrain from carrying on a similar business, within specified local limits, so long as the buyer, or any person deriving title to the goodwill from him, carries on a like business therein, provided that such limits appear to the Court reasonable, regard being had to the nature of the business.
Enforcement of bond can be done if employee breaks the bond.
Each case will need to be critically examined before any comment can be passed.
From India, Pune
Dear Friend,
You have not mentioned purpose of the bond and also terms & conditions of the bond. without these information it is not possible to extend proper advice. Please share.
Warm Regards
Bharat Gera
HR Consultant
9322404765
From India, Thane
You have not mentioned purpose of the bond and also terms & conditions of the bond. without these information it is not possible to extend proper advice. Please share.
Warm Regards
Bharat Gera
HR Consultant
9322404765
From India, Thane
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