Atul (z) 12 September 2011

Validity of service bond when company is sold to other

I signed an employment bond with a company during my campus recruitment drive , they made me to signed a bond in the month of may while it was mentioned in the bond that it is being signed on 20th july, 2009 at chennai. While none of the parties were at chennai opn 20th july , 2009.It was for three years w.e.f 20th july,2009. In the month of december the company headquarters made an announcement that the company has been sold to other two companies and they will now run its operations. I citing the change and knowing the bad reputation of the bad reputation of the buyer left my organization in june 2010. The take over is still in transitional process and they are threatening to sue me in a court with 15% interest on the amount. Also they have taken my one month salary and other dues. What should I do now ??

Reply Follow

4 Replies

Kumar Doab (FIN) 12 September 2011

The appointment letter, bond, written communications from the company announcing sale of company to another two companies, the communications of the new company/your employer, need to be studied.

The sale of the company may be with stock and barrel.

Did you submit notice of resignation with effective date of resignation clearly stated or did you resign with immediate effect?

The threats issued to you are verbal or you have received a notice?

If the employee does not commit blunder usually employee gets relief.

V. VASUDEVAN (LEGAL COUNSEL) 12 September 2011

The bond as described by you is void and no action can be taken on the basis of the same. Hence if at all a suitis filed, you can defend the same. In case you receive a legal notice you can defend by setting out the facts.

vasudevan

(Guest)

Dear Atul,

Sorry to point out to you that you have not made any mention what the company conveyed to itsa employees about terms of agreement on the services of the existing employees with the new company.

You have also not mentioned whether your company asked for the option from its employees either to opt for the new employer or to resign.

Actually, the status of employees bonds depend very much on the mutual terms and conditions entered in to between two companies, the selling and the buying companies.

H. S. Thukral (Lawyer) 18 September 2011

an employee ( servant ) has to choose his master. He can not be forced to serve another master and therefore his consent is must.. In Industrial Law, section 25FF of the ID Act says that in case of transfer of undertaking employees can be transferred to the transferee company on same terms and conditions and continuity of service otherwise they are to be retrenched as per law. this is however applicable in case of workmen. But in case the workman is willing to forego retrenchment compensation he can not be asked to serve a different employer. In case of managerial staff it will be upon the employee whether he is ready to serve the new employer. He can decline if he is not interested.