• Employee bond

We like to hire a accountant and want for make a employee bond of atleast 

three years and not to be join in the same nature company whole life what 

step i have to take in this matter. please suggest
Asked 7 years ago in Business Law

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5 Answers

1) under section 27 of indian contract act any agreement in restraint of trade is void. you cannot restrain employee from joining competitor for period of 3 years after leaving your organisation

2) the Bombay High Court held that a restraint

operating after termination of the contract to secure freedom from competition from a person who no longer worked within the contract, was void. The court refused to enforce the negative covenant and held that, even if such a covenant

was valid under German law, it could not be enforced in India. (Taprogge

Gesellschaft MBH v. IAEC India Ltd., AIR 1988 Bom 157)

Ajay Sethi
Advocate, Mumbai
96748 Answers
7804 Consultations

1. Banning an employee for lifetime to join in similar company is an unlawful term which can not enforced even if you mention the same in the agreement.

2. The job an accountant is not so confidential and so any restraint even for one year would not be entertained in a court of law.

3. So rather draft a regular job contract thriugh akawyer and get it igned by him.

Devajyoti Barman
Advocate, Kolkata
23187 Answers
510 Consultations

You have to enter with service agreement with the employee by covenanting all the terms and conditions of the employment including period of employment. You must obtain conveyance bond and undertaking for working minimum three years an din case of default the employee has to pay certain amount for bracing the agreement.

Lakshmi Kanth
Advocate, Hyderabad
446 Answers
15 Consultations

You want to get a contract drafted to hire an accountant. So you require a lawyer for this. Accordingly, you can get engage any lawyer from this portal for the same.

Ashish Davessar
Advocate, Jaipur
30763 Answers
972 Consultations

An employment bond is a contract, and therefore would be subject to the provisions of the Indian Contract Act. An employment bond prevents employees from committing certain acts and thus comprises of some negative covenants.

Under contract law, a contract is invalid if it has been made by subjecting the other party to coercion, fraud, misrepresentation, or undue influence. A contract will also be invalid if it has been by mistake. However, an agreement that is entered into with free will; and without any of these invalidating criteria, is valid and legally binding.

The law of contract states that any agreement in restraint of trade or practice can be challenged. Accordingly, the terms and conditions of a contract that prevent an employee from joining another organisation would be invalid.

However, the law allows for reasonable terms and conditions to be laid down in a contract. While an employment bond is being drafted, it is important to ensure that the stipulated terms and conditions are reasonable and valid.

The undermentioned principles would safeguard your interests:

The interests of the employers must be considered, and they must be compensated in case of a breach of contract.

The penalty that may be imposed on an employee or his guarantor cannot be exorbitant and unreasonable.

T Kalaiselvan
Advocate, Vellore
86950 Answers
2334 Consultations

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