One of the companies asked me submit post dated cheque equivalent to the amount of CTC drawn by me as a gurantee that i would not leave the company before a year.
Is it legal for a company to do so.
Is employment bond legal.
Thank you for advise.
Sumeet (Sales and Marketing) 18 January 2014
Kumar Doab (FIN) 18 January 2014
Whether it is legal or not Don’t accept the offer letter of this company making offer of appointment and don’t join this company.
Don’t transact in writing and show all communications sent by this company to elders in the family, competent and experienced well wishers, lawyer/law firm and submit if required a fitting reply by redg. post.
Hope you have not provided a cheque to them.
Have you?
In the meantime you may go thru the attachments.
Sumeet (Sales and Marketing) 19 January 2014
Thank you for your suggestion. I have refused their offer. It was a verbal communication so i do not have any proof. But i lost a job due to this condition.
Kumar Doab (FIN) 19 January 2014
T. Kalaiselvan, Advocate (Advocate) 19 January 2014
Demanding post dated cheque equivalent to the amount of CTC is nothing but a blackmail and illegal. A company cannot impose such condition. If somebody is submitting to the pressures of the company, they will be trapped very badly even for no fault on their side, so it is better decline such offers. In the event anything untoward happening against you, this cheque may be misused against you for which you may not find any defence in the absence of evidence in your possession. So bear it in mind to not to accept such offers in the future with any company.
Sumeet (Sales and Marketing) 20 January 2014
But the company gets the bond and PDC signed by all its employees.
They are approaching me to accept the offer and sign the Bond.
If you are out of job you get tempted to accept offers.
Kumar Doab (FIN) 20 January 2014
You must have heard the proverb:
"From the frying pan into the fire"
There are publications to suggest that there are employers that obtain Lien on FDR before giving employment.
You must have gone thru the attachments in this thread.
The Bond is in lieu of what extra Ordinary Favor by employer to employee?
If you have signed the bond by your free will, even if company has not granted any extra ordinary favor and incurred some expenses on you the company may not proceed to pull you to court and if it does it would be civil court.................claiming it has suffered legal injury by breach of Bond.
However in case of cheque bounce it would be a criminal action.........................the Bond with deposit of cheque is a very harsh condition.
The practice of the employer is unethical, unfair and employees can lodge a complaint with o/o Labor commissioner, Trade Unions.........................
It is reiterated that avoid such temptations.
Try hard for suitable venture.
Rest is up to you.
Sumeet (Sales and Marketing) 21 January 2014
Can i just sign the bond and not give the PDC's
Sumeet (Sales and Marketing) 22 January 2014
It's very easy to say no to a job. Getting one is difficult.
Saying a no is not the solution to the issue. I had got this job after 6 months of search.
Shouldn't the Labour Department and the Labour commissioner act on these companies.
Isn't their any law which can prevent such companies from exploiting employees.
Kumar Doab (FIN) 22 January 2014
It is your call.
Let us assume that you join and do not give PDC and after 1 month when your wages are due to be paid these are not paid.
You shall have again an issue at your hands.
Such employers are known to square off the dues against amounts in Bond and claim balance.
Such unscrupulous employers are known to put harsh conditions to employees that have been out of employment.
>> BOND that you have to sign may not necessarily be ‘Service Agreement’ only it may contain clauses on ‘Non Solicitation’, ‘Non Compete’ ‘Data Protection’ etc..................
If company has not incurred expenses say on: training it may not succeed to claim expenses/liquidated damages......................The Indian Courts have consistently been declining to enforce ‘Non Compete’ clauses/agreements as it hits right to earn livelihood and hits clauses of Indian Contract Act.............
However clauses/agreements on ‘Data Protection’ ‘Non Solicitation’ may be declared as operational.............................and damages may be claimed.
If you have gone thru the attachment then you must be aware of the details.
You may also carefully go thru the judgment:
--
Polaris Software Lab. Limited ... vs Suren Khiwadkar
https://www.indiankanoon.org/doc/1371809/?type=print
-- IN THE HIGH COURT OF JUDICATURE AT BOMBAY :CRIMINAL APPELLATE JURISDICTION
Joseph Vilangadan. v. Phenomenal Health Care Services Ltd. & Anr.
CRIMINAL WRIT PETITION NO.2243 OF 2009
If the cheque given is a Security Cheque it may not attract NI Act.
It shall be appropriate to get the Bond examined ‘verbatim’ from your lawyer.
Pls do not jump to any conclusions after going thru these judgments and let your lawyer opine finally to you.
>> The Labor Commissioner and lawful authorities can even take suo motu notice of such matters.
A phone call, anonymous email should be sufficient.
The complainant can cite that they are deciding on calling a press conference and escalating to Chief Justice of High Court, Supreme Court, State Minister of Labor, Central Minister of Labor, Media, Police, Trade Unions and pursue the matter thru RTI and this may set them to work at Super fast Speed.
>> The employee should become member of Trade Unions and form internal Unions, IC’s, Work Committee’s and this shall protect from unfair practices...........................
At Mumbai Trade unions are very active and effective.
Such matters affecting class of employees are effectively handled thru unions.
You may discuss with local leaders of Trade Unions like AITUC, CITU, INTUC.....................and its affiliated unions in your sector/trade.....................or unions for your sector/trade may be formed.
The unions can pursue for standing orders, internal Unions, IC’s, Works Committee’s.....................
If you have gone thru ID Act you shall find that Works Committee’ is an authority. The Chairman of the committee is on rotation from Employer and Employees.
Even supervisors, Officers, Executives can form their associations, Guild........................and be very effective in protecting their rights.
If employees are not united, the individual employee is easy target for exploitation and in case of dispute the forum for him is civil court, labor court and then has to face the delays..............................etc.
Employee should justify every penny of salary paid but must e properly informed to defend his interest.
>> Employee should also keep access to a good labor consultant/service lawyer.
Designation alone does not decide employee shall be covered as ‘Workman’ as in ID Act and ‘Employee’ as in (Name of state) Shops and Commercial Establishments Act.
Your lawyer may opine that you shall be covered.
Bombay Shops and Commercial Establishments Act is so employee friendly and as per it any commercial establishment employing 50 employees would be covered by Industrial Employment Standing Orders Act.........................If standing orders are not certified, Model Standing Orders shall apply.
Standing Orders provide protection to employees and employer is personally held responsible for faithful coverage of standing orders.
>> IN case of Issues employee can approach:
Lawyer/Law firm
Trade Unions, Employee’s
Inspector under Shops and Commercial Establishments Act
Inspector under Payment of wages Act
Labor Inspector and ALC/DLC in O/o Labor Commissioner
RPFC
ESIC Inspector
Court Of Law; Civil, Criminal
High Court
Supreme Court
You may find the following threads relevant;
https://www.lawyersclubindia.com/experts/Standing-orders-442266.asp#.UtKr1dIW1MA
https://www.lawyersclubindia.com/experts/Employement-bond-373326.asp#.Ut-AQdK6aXZ
https://www.lawyersclubindia.com/experts/Resignation-not-accepted--446951.asp#.Utvqn9K6aXY
https://www.lawyersclubindia.com/experts/Resignation--446881.asp#.UtrCUNK6aXY
https://www.lawyersclubindia.com/experts/Harassment-by-employer-447551.asp#.UtrBBdK6aXY
https://www.lawyersclubindia.com/experts/not-serving-notice-period--447391.asp#.UtrBg9K6aXY
https://www.lawyersclubindia.com/forum/Notice-period-buyout-96082.asp#.Ut9-6tK6aXY
Kumar Doab (FIN) 22 January 2014
Attached
Sumeet (Sales and Marketing) 05 February 2014
Dear Mr. Kumar,
Thank you for for your valuable advise and suggestions. I still have query. Sorry if i am bothering you too much.
The above article states that "If the cheque given is a Security Cheque it may not attract NI Act."
Therefore will my cheque given to the employer attract NI Act.
What is the difference between a security cheque and a Normal cheque.
Thank You
Sumeet
Kumar Doab (FIN) 05 February 2014
The judgments by courts of law is a dynamic process.
NO one knows what shall be a judgement tomorrow that may again redefine the approach to a matter.
We reiterate:
“avoid such temptations.”
“It shall be appropriate to get the Bond examined ‘verbatim’ from your lawyer.
Pls do not jump to any conclusions after going thru these judgments and let your lawyer opine finally to you.“
Hence without elaborating further we suggest that you may engage a lawyer well versed with such matters at your location and spend quality time with your lawyer, in person.
On line discussions have its own limitations.
Rest is up to you. You may proceed further as deemed fit at your end.