Few Young Employees Know : Bonds obtained by Companies binding Employees to serve 2 or 3 years compulsorily, cannot be enforced if against law

Companies often hire young and bright employees to serve in their company. They often spend a lot in giving them training and experience on job.

If after two years, the employee walks away, the company's expenditure on training this employee is lost.

Therefore, many companies obtain a Bond on stamp paper from employee that he or she will not leave company before 2, 3 or 5 years.

Sometimes it is part of service contract that Employee will not leave job without giving 3 months advance notice.

How far these agreements or bonds are valid if challenged in Court? Will Court force employee to SERVE EMPLOYER AS PER TERMS OF AGREEMENT?


1) Basic Law : All such bond and agreements are agreements to perform PERSONAL SERVICES. Normally courts have no power to enforce Personal Service of an employee. Normally, it cannot direct that an Employee will have to serve for prescribed period.

2) Most of such agreements have a clause that employee will pay certain damages to employer if he or she will leave job earlier than agreed. If the amount so agreed, looks reasonable, the court may order employee to pay damages agreed. But is such amount is too high, exorbitant, exploitative .. then the Court may refuse to order such amount as agreed in bond. Instead it will pass order of some amount which may look reasonable to court.

But all said and done, an employee cannot be forced to serve against his will even if he may have so agreed by furnishing a signed stamped bond paper.


Another Important Question : What can be done if some big company is taking bonds from employees and forcing them to sign to pay Huge Amount if they have to leave job for some reason before bond period is over ?

1) No Employee may come forward to challenge such boards in a Court of Law. Because, this can mar their future career. They will not get job in future in other companies also if they go to court to challenge conditions of bond in Court.

2) Then Remedy is Class Action : A Representative Suit by any Four Citizens of India in Civil Court by way of public interest litigation. These four warriors may not require any job. They need to just show their bonafide and public interest. The Court will direct issuance of Advertisement in Newspapers, telling people that others who want to join in this battle may also join before a given date... The quest for justice will begin. The court will declare void unreasonable amount and conditions mentioned in Bond of this company. This will bring relief to all affected employees.

Haresh Raichura
9/11/2014
Copyright : Haresh Raichura 2014 All Rights Reserved