Krishna Pamarthy (Sr Software Engineer) 05 December 2011

Violation of service agreement (bond)... what should i do ?

I am working in a private sector MNC in Chennai since 6th October 2011. On the date of joining, I was asked to sign a bond (copy attached) which is termed as an agreement between two parties, to serve a 2 year employment (1 year probation) violation of which amounts to me paying back the company 1 year CTC or 10 lakh rupees. I have signed the 3rd/last page of the bond, however I have been very uncomfortable working in this company since the date of joining.

I have relocated from Hyderabad and I am uncomfortable on personal front and also health wise after coming to chennai. I have tried informing the same orally to the HR manager a couple of times and finally on 29th Nov I decided to quit the job, citing personal reasons and lack of motivation to work in an unhealthy workplace (there are quite a few stupid rules which were not informed prior to joining). I have sent the resignation through email and a copy to my personal email as well. After this resignation, the HR manager & Technical manager had a discussion with the site leader and told me that I might have to serve a 3 month notice failing which I will have to pay 3 months CTC (2,15,000/-) to the company and obtain a relieving letter.

The bond is actually for 1 yr CTC (8.5 lakhs) for the first year and 10 lakhs for the second year of employment.
I am not in need of a relieving letter as I have already got another job, which i have to join by 12th dec. The site leader is rigid and unwilling to compromise or sympathize on my health issues and says I have to pay and may not negotiate any possible variations in the payment of 3 months CTC. I dont have any huge savings to afford that payment and neither do I have any properties or immediate access to loans to support myself. In this regard, I am looking at the option of breaking the bond and not contacting the company at all for further terms and literally abscond from whatever I have to do here in this company.

I have thought of leaving this place on good terms, but the HR is not interested in negotiations and hence, I would not like to come back to this job anytime. Thus, I am prepared to leave from the job by breaking the bond, not paying anything at all to the company, though i feel it is not completely right, I think company is not leaving me any other option to try other than this. I would like to know your expert opinion in my case. What course of action should i take from now on ? 12th dec I may join the new job and since i didnt disclose this chennai employment there, I dont need any relieving letter from this place, thus i can quit and walk away easily, but what if they come to know of my new employment and try to contact that company, trying to damage my career ?

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I was not given any good work and neither given any good training except for a very generic training program focussed on freshers to improve their skills (that doesnt help any experienced person) and hence company is not losing anything in work related to me or my level of working
I did not claim any personal advances/loans or travel/health claims yet.

I have resigned on 29th (email) of which i dont have a printed copy (can obtain if required)
I am no more interested in this company since i lost a lot of personal time and agony due to career changes (all this because they didnt communicate the company working rules & regulations properly)

Respected members from lawyersClub, I commend you for the responsible guidance you give theyouth on various cases. Please take a look at my bond pictures attached and help me in whatever way you can. Kindly let me know if i have to pay a nominal fee for the legal consultation, which is indeed a career guidance also in my case.

Expecting some early replies since i dont have much time at hand other than a couple of days in this week.

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2 Replies

Kumar Doab (FIN) 05 December 2011

Has the company issued any appointment letter, and if yes what is the probation period and notice period, notice pay mentioned in it?

Has the company provided employee rule/hand book and circulated standing orders to you? or Has the company placed standing orders, employee rules on intranet ( HR page) etc, which can be accessed by employee?

The conditions expressed in the service agreement, and financial penalties declared are harsh and huge.

Have you ever submitted detoriation of your health, rude conduct of superiors in writing? If you have not you have erred, as verbal deliberations have no standing until or unless these are witnessed or proved. You should have given a fair chance to employer and this would have gone in your favor also. 2 months is too short a period for a company to tolerate for separation until or unless there are compelling reasons which an employer can also appreciate can understand. Your notice period is 3 months and thus you shall end up paying the company rather than earning anything from company and you shall always be concealing this employment record in your vitae.

You have agreed to the terms and hence company can proceed against you. It may be difficult for the company to prove amount of 10 lacks against you. You shall have to face the legal steps taken by company. Company can give negative feedback about you during reference check.

You are liable to pay notice pay. You are entitled to get salary for the period you have worked, work experience/service certificate, form 16, PF accumulation reports, Pf withdrawal/transfer forms, settlement of your a/c, FNF statement and payment of your dues.

It is suggested that you may submit a written representation, addressed to good offices of your appointing authority, MD, CEO, Chairman, Head-HR, on your reasons as expressed by you, and build record in your favor.

It is always better to consult elders in the family, competent and experienced well wishers, lawyer/law firm before jumping to sign on the dotted line in haste without understanding the future implications. You should learn from this episode.