I was sent overseas for 2 years work assignment. For the 2 years assignment, I was asked to sign a service bond which I have to return to my home country for work for another 2 years. 1.5 years into the overseas assignment, the home company sent an email mentioning that I will have to return 4 months earlier than scheduled. As I have other plans to remain longer in the host country, perhaps to seek other employment opportunities, am I able to use the arguments below to free myself of the bond?
1. As this is a work assignment (no trainings were involved) where the company is under obligation to send employees to the host country, is the bond still valid?
2. With the company requesting me to return 4 months in advance, is this considered a breach of contract on their end? Will I be able to invalidate the bond attached?
3. It is stated clearly that I would have to pay back all costs incurred during the overseas assignment if I leave service in the host country. However, it is not mentioned explicitly in the service bond about the penalty if I resign in home country after the assignment. It is only brought up in the email that I would have to pay back all costs incurred should I resign in home country. Am I able to leave freely since the penalty was not stated in the service bond and only mentioned in an email after query? Also, is this unfair as no costs are not pro rated according to time already served?
Are there any other arguments above that are valid? Or are there any other points that I might be able to use?
Thanks!
From India, Indore
1. As this is a work assignment (no trainings were involved) where the company is under obligation to send employees to the host country, is the bond still valid?
2. With the company requesting me to return 4 months in advance, is this considered a breach of contract on their end? Will I be able to invalidate the bond attached?
3. It is stated clearly that I would have to pay back all costs incurred during the overseas assignment if I leave service in the host country. However, it is not mentioned explicitly in the service bond about the penalty if I resign in home country after the assignment. It is only brought up in the email that I would have to pay back all costs incurred should I resign in home country. Am I able to leave freely since the penalty was not stated in the service bond and only mentioned in an email after query? Also, is this unfair as no costs are not pro rated according to time already served?
Are there any other arguments above that are valid? Or are there any other points that I might be able to use?
Thanks!
From India, Indore
Hi Partner,
Without knowing the content in the service bond that you had signed it would not be easy to provide an accurate answer here. But then as a tip, it would be good to ask any lawyer to examine the service bond and check if it is correct as per the Indian contract act 1872. This could help in attaining the correct legal points in the first attempt itself.
In my viewpoint, it would not be easy for your employer to legally enforce the service bond especially if you are able to highlight in court that this is more of a one sided contract giving the employer unfair advantage over you. But then initiating proceedings in this manner could hamper the relations between you and your employer and also harm any chances of future reference from your employer.
If I am to proceed on a general note on the points you have mentioned above, it is true that if the 2 year bond period is tagged to an exact 2 year overseas assignment period, then your employer asking you to return 4 months earlier, makes the bond null and void unless there is a prorata type clause indicating how the bond period and the assignment duration vary accordingly with each other.
The company also has to determine and confirm the exact amount of training costs and expenses and the penalty can be claimed only in line with these factors. Stating exposure to the client and new technology does not stand legally valid. It has to be proven that the training provided to you was beneficial for your personal betterment as well. This is difficult to prove, especially when the company has been billing the client for the work you have been doing and making a profit.
The other aspect is that you had been sent to work on the project as part of a company requirement and not on your request. The next part would be about justifying the 2 year bond period and as to how reasonable this is, because during this 2 year period there should be no risk to your career where the company can hold back promotions and hikes though you perform well, because there is a bond. They cannot sack you as well if they feel you have not performed because it is as per the company bond requirements that you are serving the 2 year bond period.
Like these, there are lots of legal points to escape from the contract. But my personal advice would be to check with a legal advisor on how this can be managed without hurting the relations with your employer, so that you do not face any risk the future.
From India, Bengaluru
62Without knowing the content in the service bond that you had signed it would not be easy to provide an accurate answer here. But then as a tip, it would be good to ask any lawyer to examine the service bond and check if it is correct as per the Indian contract act 1872. This could help in attaining the correct legal points in the first attempt itself.
In my viewpoint, it would not be easy for your employer to legally enforce the service bond especially if you are able to highlight in court that this is more of a one sided contract giving the employer unfair advantage over you. But then initiating proceedings in this manner could hamper the relations between you and your employer and also harm any chances of future reference from your employer.
If I am to proceed on a general note on the points you have mentioned above, it is true that if the 2 year bond period is tagged to an exact 2 year overseas assignment period, then your employer asking you to return 4 months earlier, makes the bond null and void unless there is a prorata type clause indicating how the bond period and the assignment duration vary accordingly with each other.
The company also has to determine and confirm the exact amount of training costs and expenses and the penalty can be claimed only in line with these factors. Stating exposure to the client and new technology does not stand legally valid. It has to be proven that the training provided to you was beneficial for your personal betterment as well. This is difficult to prove, especially when the company has been billing the client for the work you have been doing and making a profit.
The other aspect is that you had been sent to work on the project as part of a company requirement and not on your request. The next part would be about justifying the 2 year bond period and as to how reasonable this is, because during this 2 year period there should be no risk to your career where the company can hold back promotions and hikes though you perform well, because there is a bond. They cannot sack you as well if they feel you have not performed because it is as per the company bond requirements that you are serving the 2 year bond period.
Like these, there are lots of legal points to escape from the contract. But my personal advice would be to check with a legal advisor on how this can be managed without hurting the relations with your employer, so that you do not face any risk the future.
From India, Bengaluru
Thank you @Nelsonthomas9102. That is an insightful reply. This is a sticky situation indeed.
To give more information about the situation, the contract states that I the employee of my own free will bind myself to the 2 years period. The start and end date is stated but there is no prorata clause. My employer did offer to reduce the bond period by 4 months, the same amount of time that they reduced my term in the host country.
The full expenses which includes the hardship allowance, accommodations, flights, freights, insurance and other expenses involved in my assignment will apply as liquidated damages should I leave the company. The amount to compensate was not explicitly stated in the contract but was mentioned in the email. It was only stated that I would have to serve the home company for 2 years after my assignment but no mention of the penalty should I break the bond after the assignment.
The nature of my assignment was to take up a position in the host company, doing work as an employee. There has been no mentor nor training involved.
The company is obligated to send employees to the host country due to the fees the host company has to pay the home company based on the number of expats sent to the host country. Due to an internal change in policy, the fees are no longer based on the number of expats. As a result, the home company requests for me to return in advance due to this policy change.
From India, Indore
To give more information about the situation, the contract states that I the employee of my own free will bind myself to the 2 years period. The start and end date is stated but there is no prorata clause. My employer did offer to reduce the bond period by 4 months, the same amount of time that they reduced my term in the host country.
The full expenses which includes the hardship allowance, accommodations, flights, freights, insurance and other expenses involved in my assignment will apply as liquidated damages should I leave the company. The amount to compensate was not explicitly stated in the contract but was mentioned in the email. It was only stated that I would have to serve the home company for 2 years after my assignment but no mention of the penalty should I break the bond after the assignment.
The nature of my assignment was to take up a position in the host company, doing work as an employee. There has been no mentor nor training involved.
The company is obligated to send employees to the host country due to the fees the host company has to pay the home company based on the number of expats sent to the host country. Due to an internal change in policy, the fees are no longer based on the number of expats. As a result, the home company requests for me to return in advance due to this policy change.
From India, Indore
Hi Partner,
It seems it is your company which has breached the agreement by instructing you to return to your home company, just because there has been a change of terms between the home company and the host company.
In software companies working in such situations the observation has been that employees are initially billed by the hour and so it makes business sense to send more employees for increased billing. At a later stage when the software has finally been hosted onto the client server, then support for a short period is provided before the final closure. At this time, like in a fixed price project the client will agree to pay a fixed amount irrespective of the number of employees working on the project. At this point, it makes business sense to reduce the number of employees working on the project.
In your case, the situation seems to be similiar to what has occurred above where your company had recalled you due to changes in the terms between the client and the service provider. So, in my opinion there is no legal obligation from your end to abide by the terms of the service bond.
Your employer cannot also suddenly make up a prorating clause stating that the 4 months shall be adjusted. This also breaches the agreement.
Liquidation damage cannot be claimed as well, because your company has profited from payments from the host company on account of the work you have been doing and it was the home company that changed the agreement, not you.
This arrangement looks totally incorrect in every aspect from what I see. It is better to start discussions with your employer to drop the coverage of the service bond. If burning the bridges does not matter, you can discuss with a lawyer as well.
From India, Bengaluru
It seems it is your company which has breached the agreement by instructing you to return to your home company, just because there has been a change of terms between the home company and the host company.
In software companies working in such situations the observation has been that employees are initially billed by the hour and so it makes business sense to send more employees for increased billing. At a later stage when the software has finally been hosted onto the client server, then support for a short period is provided before the final closure. At this time, like in a fixed price project the client will agree to pay a fixed amount irrespective of the number of employees working on the project. At this point, it makes business sense to reduce the number of employees working on the project.
In your case, the situation seems to be similiar to what has occurred above where your company had recalled you due to changes in the terms between the client and the service provider. So, in my opinion there is no legal obligation from your end to abide by the terms of the service bond.
Your employer cannot also suddenly make up a prorating clause stating that the 4 months shall be adjusted. This also breaches the agreement.
Liquidation damage cannot be claimed as well, because your company has profited from payments from the host company on account of the work you have been doing and it was the home company that changed the agreement, not you.
This arrangement looks totally incorrect in every aspect from what I see. It is better to start discussions with your employer to drop the coverage of the service bond. If burning the bridges does not matter, you can discuss with a lawyer as well.
From India, Bengaluru
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