Service Contract With The Company
Querist :
Anonymous
(Querist) 05 May 2011
This query is : Resolved
Hello All,
I am in need of your help with a small issue of mine.
I am working for a Netherlands based BPO in Mangalore. I have been selected as senior in this company and working here from past 6 months. When I joined the company, I was asked to provide the my SSLC original marks sheet or to provide a blank check for the amount of50,000/-, in lieu of the service contract with the company for two years. I provided them with the a blank check.
My first question would be is this a form of bonded labour? Is this allowed in India?
Can I take any legal action against the company for getting those documents from me?
Can I leave the company without notice as my appointment letter or contract does not state the need for a notice period before leaving.
And if the company is not registered to do its business in India, does it matter in anyways? Because the company is not registered in India. Also, the company people do not directly speak to cops if they come for some kind of routine verification.
Finally, I everyday travel home from my workplace which is around 60km away. But the company is compelling me to stay in Mangalore itself, they are not providing a reason for it. I have also told them if my work needs me to stay in Mangalore, I will stay. But if it is not required, I will not stay. They are not agreeing.
Please advise me!!
Thanks and Regards!!
Basavaraj
(Expert) 05 May 2011
Dear Anonymous
This type of question was already resolved by in expert section.
Once again i m posting the same that :''''
In India Bond is illegal w.r.t employment since as per the Indian Statute, bonded labor system was long abolished and no bond can force any person to work against the employees wishes.
Article 19 of Indian Constitution talks of fundamental rights, as per the Article 19 the Constitution the write work is a fundamental right, and under no circumstance does the Fundamental rights under Article 19 be waived by any person nor can any person be forced to do something that amounting to the violation of the rights mentioned under Article 19.
As per the Indian Contract Act contracts entered between two parties if is one sided then such contract would be null and void. Most of the Bonds are one sided.
Again as per the Indian Contract Act no contract can be enforced on any person if the contract which is being so enforced causes any harm to the person on whom it is enforced and if performed would violate principles of natural justices.
As per Sec 368 of Indian Penal Code if any person or institute holds back any document or any use any legal document or threatens any legal suits or actions and thus forces a person to perform any act against his wishes or which is illegal or wrong as per the statute of Law of the land.
Sec 368 of Indian Penal Code talks about extortion by the threatening to file a legal suit. The minimum punishment under this act is 2 two years.
The Supreme Court of India has clearly stated that no employee can be forcefully employed against his will, just because he has signed a contract with the employer.
The Supremes Court also has stated that the employer cannot hold back any personal document of the employees as they are earned by the employees and the company has no claim on the same.
Any complain on the company would land the Directors and Managing Directors of the company in Jail or face the risk of Exemplary Damages, as the company is not an actual living entity but only a legal entity and the management are hands and heads of the company.
Bonds are applicable only if the company has spend money on the personal grooving and enhancement of the employees, but not just a training that helps employees perform better.
For more details pls go through the attached file. I t is very good full for you.
Regards
Basavaraj
Guest
(Expert) 05 May 2011
Dear Basavaraj,
While the article attached by you for the help specifically of the author of the question and for other employees in general is appreciable, your reply, probably, does not cover some important points of the questions.
Here in the question the author has not made a mention about any bond having signed by him with the company.
Your reply that "In India Bond is illegal" needs to be supported by some section of the law. Further, your statement that, "Bonds are applicable only if the company has spend money on the personal grooving and enhancement of the employees" seems to contradict your own statement, where you have stated that bond is illegal. You may please like to reconcile on that aspect.
Here the company seems to have acted in a very smart way by trying to avoid any legal complication in not entering in to any bond or agreement with the employee, but by getting a blank cheque from his employee that too without making any recorded evidence, so that when the mployee leaves the company, some one may produce the same to bank for encashment, so that the employee can be forced to face criminal case under sec. 138 of NI Act, if the cheque gets dishonoured.
So, the question needs to be seen on these important aspects, besides other parts of the question, which are not covered in your answer.
Guest
(Expert) 05 May 2011
Dear Anonymous,
Your problem is vey peculiar, where the company seems to have acted very smartly without leaving any clue for any illegal act on their part.
However, about your giving a blank cheque to the company, without consideration, your mistake made in the past cannot now be rectified, except by taking some precautionary and remedial measures to avoid any harm that may be done by the company in future to you. In fact you would have insisted the company to enter in to a written contract instead of fulfilling their verbal requirements. Now the company is free, not even to terminate your comtract any time without notice, but also can encash your cheque any time. If the chque is bounced with any reason, like stop payment or on account of shortage of funds in your account, the company can also sue you in a court of law under the Negotiable Instruments Act in the event of any such reason for bouncing of cheque.
Anyway, you can now do one thing that you may give notice to the company that payee name and amount may not be entered in your blank cheque without your consultation and also not be presented to the bank without confirming from you about balance before presentation of the checque. In your notice, you must also make a reference about delivery of the blank cheque on demand by (name & position of the person in the company) company in lieu of service contract at the time of entry in to service/contract. At least you would have some recorded fact as well as restriction imposed on the company by you.
About other parts of your question, it can be stated, as follows:
The question of bonded labour does not arise, as you did not sign any bond with the company. Also Bonded Labour Act deals with the labour employeed by any person in lieu of debts.
You can also not take any legal action against the company for getting those documents from you unless you have any recorded evidence about their demand. However, you can take remedial measure, as already suggested above.
About leaving the company that depends upon the languaage used in your appointment letter. However, in general, if they have shown you as an employee, you have to abide by observing the notice period of one month, as per Shops & Establishment Act applicable in the concerned State. If you are shown as a contractor without any agreement, you can leave the company without notice.
Registration of the company is not necessary if any company has established, just a representative office to liainnaise or coordinate the activities of the company in connection with its business. If the company people do not directly speak to cops if they come for some kind of routine verification, it is up to the cops to insist for the head of the office to speak for the purpose of investigation.
The company, if has employed you as its employee, can require you to stay in Mangalore where the office is situated for the convenience of office. But not as a contractor.
Querist :
Anonymous
(Querist) 05 May 2011
Hello Sir Dhingra,
Yes, I have provided the company with the blank check, but in return I have taken a letter from Company which clearly states on the company letterhead stating that the check of amount Rs 30000 has been given to them in lieu of the contract with the company for two years. Also, company did not provide any training for the production in the company. I will attach the copy of contract letter what I have from with the company, if needed, in my next reply. Also, I have consulted my lawyer and he informed me that the letter and its language would be enough for filing the charges against the company in labour court.
Any suggestions??
Guest
(Expert) 05 May 2011
In your main question you have stated the amount to be Rs.50,000, while in your clarification you have stated the amount to be Rs.30,000. So, please reconcile, what is the correct position.
Further, in view of your present post, your earlier question was not complete as you did not provide this most important information of having got receipt which clearly mentions about the cheque having been taken in lieu of the contract.
Based on this document, particularly with the language mentioned by you, i.e., "in lieu of the contract with the company for two years," if your lawyer has suggested that you can file the charges against the company in labour cort, he has advised you wrongly.
EVERYTHING DEPENDS ON THE LANGUAGE OF DOCUMENTS."
The stated language, clearly points out that the cheque with the stated amount has been received in lieu of the contract. That clearly means the amount was non-refundable. The interpretation clearly goes in favor of the company that they gave you the contract and received the cheque against that. Nowhere they have stated that the said cheque would be returned to you even after completion of the period of contract. And if you leave the company without fulfilling your contract, the company can even sue you under the provisions of the Indian Contract Act for not fulfilling your obligations of contract.
BUT, I still have my apprehenstions that you have not been able to put here your problem correctly with particular reference to the documents exchaned between you and the company.
SO, your own questions can get only misleading advice from the experts, if facts are not properly brohgt to their notice.
PS Dhingra
CEO, Dhingra Group of Management & Vigilance consultants
New Delhi
dcgroup1962@gmail.com
Querist :
Anonymous
(Querist) 05 May 2011
Yes Sir,
You are right. May be I am not able to present my problem correctly. The check was asked for initial amount of Rs 50000, but I had the negotiations with them and gave them the check of Rs 30000 at last.
Regarding the wording, I do not have the scanned copy of the contract with me right now. But in the letter which they give me as receipt for the check clearly states the following words "This is to hereby notify that we have a received a check (check number)of of Rs 30000 drawn on ICICI Bank from Mr. Varun Shetty towards the commitment of his contract with the company. The check will be duly returned back to the employee on successful completion of two years with the company.
Guest
(Expert) 08 May 2011
The commitment is clear that they would return the cheque only of the contract of two years is completed, otherwise they can encash the cheque due to falure to honour the commitment. You can, if you can sacrifice the amount of Rs.30,000, leave the job before completion of 2 years. This cannot be said to be an invalid agreement. It is not a bond, rather an wordless, but duly agreed, agreement by both the parties with a single condition for completion of the contract of 2 years.
So, any legal action taken by you will revert back on you only, at first, your action would be premature before completion of 2 years, and thereafter if you leave that would be non-fulfillment of the agreed terms by you, as you did not have any objection in giving a checque in lieu of the contract, as a part of deemed agreement without raising any objection at the time of entering in to the contract.
