Breach of service agreement
mona
(Querist) 02 December 2013
This query is : Resolved
Hi,
I need to know the consequences of breaching the service agreement. I'm a fresher and I signed a bond with my company for 18 months and if I dont work for the stipulated time period I have to pay them 1 lakh rupees,now I have completed 3 months in the company but I want to quit this job. What if I leave this job now? will the company sue me in the future if I dont pay the said money??
BAALASUBRAMANNYAMM
(Expert) 02 December 2013
In your case, your employee has taken an "Indemnity Bond" from you with the terms and conditions as mentioned therein. Working of 18 months is one of the clause and in case of violation of the said clause, you need to pay Rs.1 Lakh towards damages/liquidated damages. So you need to pay the said sum or else settle your issue amicably with your employee.
mona
(Querist) 02 December 2013
Thank you so much sir for replying to me.I would like to bring few more things to your notice, while signing the bond they just said that if you dont pay rs.1 lakh then we will not provide you:
1.relieving letter.
2.experience letter.
3.cannot re-join the company in future ie i'll be blacklisted.
4.will not give any reference for future employers.
and they said if you pay 1 lakh rupees then all the above points shall not be applicable.
I dont want neither the relieving letter nor the experience letter as this job is no way helpful for my field of interest.
So, since I dont need any letters from them is it possible for the company to sue me legally when I dont pay them the money?
ajay sethi
(Expert) 02 December 2013
yes it can . company has to spend a lot of money in recruitment ,training of freshers . if you leave company before completion of 18 months company may take legal proceedings against you
mona
(Querist) 02 December 2013
but I came to know from my seniors that many in past who left the job were not sued. Btw is there any stipulated time frame within which the company can sue in future??
mona
(Querist) 02 December 2013
also the company has not spent any individual cost on my training.
ajay sethi
(Expert) 02 December 2013
3 years . it is your call
mona
(Querist) 02 December 2013
thank you for the reply sir
Devajyoti Barman
(Expert) 02 December 2013
Breach of agreement is not always a one sided act.
if there is escape route , you can very well leave the job before the agreement period.
Service Bond is an agreement for stop wanton quitting of job but not meant for slavery.
In other words the terms and condition of the service agreement alone can determine whether you are liable for any payment before contractual period or not.
Rajendra K Goyal
(Expert) 02 December 2013
Company has not demanded bond money or has not lodged legal action for recovery previously does not mean company can not. If you leave, be prepared for legal action and if company prefer not to proceed against you also, it would be bonus.
