Hi,
I was working as a fresher in one of the corporate companies. The company's policy includes a service bond agreement of 2 years(must), upon breakage of this a total of 1lakh rupee has to be paid from the employee. Due to some other reasons I left the company which means breaking the bond. Now I started receiving mails from the company stating "intimation regarding negative FFS" and asking me to pay a total of 1lakh+1month of salary. What will be the consequences if the bond amount is not paid will there be any legal issues regarding this. Should I neglect these mails or these are to be considered seriously? Pls suggest upon this issue.
From India, Hyderabad
I was working as a fresher in one of the corporate companies. The company's policy includes a service bond agreement of 2 years(must), upon breakage of this a total of 1lakh rupee has to be paid from the employee. Due to some other reasons I left the company which means breaking the bond. Now I started receiving mails from the company stating "intimation regarding negative FFS" and asking me to pay a total of 1lakh+1month of salary. What will be the consequences if the bond amount is not paid will there be any legal issues regarding this. Should I neglect these mails or these are to be considered seriously? Pls suggest upon this issue.
From India, Hyderabad
any employment bond entered cannot be challenged in any court of law and our law of the land does not allow such bonds in favour of employers. hence do not respond to those mails. Instead you consult a good labour lawyer and prefer a complaint against the management for your grievances.
From India, New Delhi
418From India, New Delhi
Dear Annonymous,
company can demand the actual expenses incurred toward your training provided by employer if any.
Generally Service-Bonds are illegal in India because they are one sided.Further,such type of Bonds contravene Article 19 of our Constituion, which provides right to every citizen to do any occupation,trade or business or practice any profession.However,such type of Bonds are enforceable, if the company has spent money on the specialised training of the employees, and not mere training that helps them to perform better or to protect intellectual property rights or for any other reasonable restrictions. The Supreme Court of India has clearly stated that no employee can be forcefully employed against his will, just because he has signed a bond with the employer.Moreover, in case of breach of the bond,the company can realise only the actual reasonable loss suffered by them and nothing more.
In India, the cases relating to Star India Pvt. Ltd. v/s Laxmiraj Seetharam Nayak (2003 (3) Bom CR 563); Gujarat Bottling Co. Ltd. v/s Coca Cola Co., and Jet Airways (I) Ltd. v/s Jan Peter Ravi Karnik 2000(4) BCR 487 are a few decisions which the Court may take into consideration while granting relief to any prayer for injunction against an employee from competing or joining any competitor. similarly in the case of Sicpa India Limited v Shri Manas Pratim Deb, the employee had signed the bond by way of imparting training by employer according to the bond employee have to serve 2 year of service or to pay Rs. 2 Lacs in case of breach of bond by employee. when the employer moved to court to enforce the bond and in respect of recover the amount spent toward employee training. the court had asked the employer to produce the evidence of expenses incurred toward employee training. in that event they admit in presence of concrete evidence that the actual training cost toward the employee was 67595 since the employee have completed the 2 year of service out of 3 year therefore the court awarded the compensation to employer of 22532 by dividing the the total expenses 67595 into three year i.e 22532/-
In view of the above, NO Need pay any amount to them. if they move to court Let them prove before the court what damages they have suffered and let them recover their loss through the court.
Thanks & Regards
V SHAKYA
HR & Labour, Corporate Laws Advisor .
From India, Agra
company can demand the actual expenses incurred toward your training provided by employer if any.
Generally Service-Bonds are illegal in India because they are one sided.Further,such type of Bonds contravene Article 19 of our Constituion, which provides right to every citizen to do any occupation,trade or business or practice any profession.However,such type of Bonds are enforceable, if the company has spent money on the specialised training of the employees, and not mere training that helps them to perform better or to protect intellectual property rights or for any other reasonable restrictions. The Supreme Court of India has clearly stated that no employee can be forcefully employed against his will, just because he has signed a bond with the employer.Moreover, in case of breach of the bond,the company can realise only the actual reasonable loss suffered by them and nothing more.
In India, the cases relating to Star India Pvt. Ltd. v/s Laxmiraj Seetharam Nayak (2003 (3) Bom CR 563); Gujarat Bottling Co. Ltd. v/s Coca Cola Co., and Jet Airways (I) Ltd. v/s Jan Peter Ravi Karnik 2000(4) BCR 487 are a few decisions which the Court may take into consideration while granting relief to any prayer for injunction against an employee from competing or joining any competitor. similarly in the case of Sicpa India Limited v Shri Manas Pratim Deb, the employee had signed the bond by way of imparting training by employer according to the bond employee have to serve 2 year of service or to pay Rs. 2 Lacs in case of breach of bond by employee. when the employer moved to court to enforce the bond and in respect of recover the amount spent toward employee training. the court had asked the employer to produce the evidence of expenses incurred toward employee training. in that event they admit in presence of concrete evidence that the actual training cost toward the employee was 67595 since the employee have completed the 2 year of service out of 3 year therefore the court awarded the compensation to employer of 22532 by dividing the the total expenses 67595 into three year i.e 22532/-
In view of the above, NO Need pay any amount to them. if they move to court Let them prove before the court what damages they have suffered and let them recover their loss through the court.
Thanks & Regards
V SHAKYA
HR & Labour, Corporate Laws Advisor .
From India, Agra
Bonds/ agreements in order to withhold an employee are generally illegal, as already mentioned by the Learned members above along with citations.
I would like to differ to the point of remaining silent. If you are receiving any kind of demand out of such bond (even though such bonds have no legal validity) it is always advisable to reply to such demand by stating that such bonds are illegal and the company is not entitled to get any money out of such bonds. It is better to always deny the demand, even if such demand is illegal. Please also keep an acknowledgement of such reply for future reference.
From India, Kolkata
I would like to differ to the point of remaining silent. If you are receiving any kind of demand out of such bond (even though such bonds have no legal validity) it is always advisable to reply to such demand by stating that such bonds are illegal and the company is not entitled to get any money out of such bonds. It is better to always deny the demand, even if such demand is illegal. Please also keep an acknowledgement of such reply for future reference.
From India, Kolkata
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Bond of Employment.doc
Bond in employment.pdf