Breach of employment bond
I am working for a MNC company. During my joining, I have signed 2 yrs bond. Its been 21 months and I have got an opportunity to do my PG degree for that I have applied for resignation. I had given 3 months notice as per the agreement. After 1 month, they had sent me a mail stating that I have to pay Rs.2 Lacs to get the relieving letter and service certificate, If I fail to do that legal action will be taken like that they had sent. My question is I have served the company more than 3/4th of the bond period (22 months out of 24 months), still do I have to pay 2 Lacs which is mentioned in the bond. Advice me how to get my service certificates, relieving order and my final settlements.
Asked in Civil Law from Coimbatore, Tamil Nadu
Hi, as per the agreement you have to serve the company for minimum 2 years and that condition only they have given employment to you.
2. Suppose you have not completed the 24 months period then it will become breach of the agreement and as per the terms of the agreement you have to pay the damages what ever you have agreed in the agreement.
Thanks for your reply sir. But is it necessary to the full bond amount just for the sake of 2 months?
Asked 2 years ago
Hi, you have breach the terms of the agreement so you are liable to pay as per law but you can request them personally so that they may wave-of two months period better you try once.
1) since you have served the organisation for period of 22 months company cannot seek to recover Rs 2 lakhs from you .
2) at most company can recover for period of 2 months ie shortfall in service under the bond
3) the courts will not automatically grant the liquidated damages of Rs 2 lakhs merely because it is stipulated in the contract. The court will grant compensation only if the company has actually suffered a loss as a result of your early termination of contract. Hence the company which goes to court should prove that it has suffered a loss to the extent of its claim in order to get that amount, though it has been fixed under the contract.
4) the company will not issue any relieving letter unless the dispute is settled
5) you can issue legal notice to the company to settle your account and furnish relieving letter
1) As per the Agreement you have signed with the MNC you are supposed to have completed 24 months of service in employment.
2) The above being the strict observance of law, because your service is falling short by 2 months the company may recover only money worth 2 months in lieu of your serving 2 months short of the term.
3) You can issue the company a legal notice demanding the settlement of the dues and issue you relieving letter. Explain the circumstances in which you are resigning.
4) If the company goes to court you will need to contest the case.The only problem with that is, it will take several months before the case will be disposed of . As you are joining for PG degree that should not be a worry as you will not need the relieving letter immediately.
1. You have served for 21 out of the mandatory 24 months, whereas you have issued a notice for the remaining 3 months. By doing so you have complied with the terms of employment as enshrined in the contract.
2. The company can only recover from you the salary equivalent to the remaining 3 months which you have not served.
3. The court would not accept the case of the company on its face value and grant the amount sought by it. Before the claim of the company can be allowed it has to show that you are in violation of the contract and the violation has caused prejudice to the company. You will be given ample opportunity to contest the case of the company.
4. If the relieving letter is denied then issue a lawyer's notice to the company seeking the settlement of dues.
1. You have agreed to pay Rs.2 Lakhs if you leave within 2 years,
2. There is no clause sopecifying that the bond amount will be proportionately reduced depending on the period of your working with the Company,
3. The Company will be within its right to claim the said agreed amount if you fail to comply with the terms of the agreement.
1. Yes, the term id that you shall have to pay Rs.2 lakhs if you leave within 2 years,
2. There is no mention of the term specifying that the said payment of bond amount will be reduced proportionately depending on the period left to complete the said agreed period of 2 years.
Yes, as per the contract signed by you and employer you are bound to pay the Bond amount, if you are not ready to make the payment then the company have right to hold your relieving letter, service certificate and other things.
they have also right to file a civil suit for recovery against you before civil court for recover the amount as mentioned in the Bond.
Advocate, New Delhi