Whether you accept legal notice or not the company may file a suit for recovery of bond amount. However it is better for you to receive legal notice and send fitting reply notice stating that Section 27 of Contract act does not allow for such bonds. The law says that the employer is entitled for only the actual amount spent by them on training of employee, if exist is premature.
Is notice period (3 months) legal in India?
It can be easily understood that the ambit and scope of section 23 of the Indian contract act 1872, is vast and therefore the applicability of its provisions is subject to scrutiny by the court of the consideration and object of an agreement and the agreement itself.
Therefore, in order to bring a case within the purview of section 23, it is necessary to show that the object of the agreement or consideration of the agreement or the agreement itself is unlawful.
I'll keep it short and simple:
Either party - employer or employee can terminate the contract by giving sufficient notice or compensating accordingly. In such a case, employer is bound to release the employee without any fuss, assuming that either of the above two conditions are met.
So, if your organization doesn't allow you to buyout the notice period, please feel free to knock on the doors of the Indian judiciary.
The following key issues should be highlighted:
• A 30 to 90-day notice period applies in order to terminate ‘workmen’ (as defined in the Industrial Disputes Act, 1947) – that is, employees whose role is not primarily supervisory, administrative or managerial) for convenience, with 15 days’ pay due for every year worked. In the case of manufacturing units, plantations and mines with 100 or more workmen, termination for convenience requires prior government approval; in other sectors, it requires only government notification.
• Termination for cause does not include non-performance – it includes only behaviour which qualifies as misconduct.
• The ‘last in, first out’ principle requires that the employer first terminate for convenience the last people to join the organisation in the same role. However, this requirement can be contracted out of. When hiring for the same role, workmen who were terminated for convenience should be given the opportunity to re-join the company.
• State laws generally provide for about 15 days of earned/regular leave a year. Employees also benefit from up to 10 days of sick leave and a possible 10 additional days of ‘casual leave’. This is generally more than what most organisations would ideally like to provide.
• Most state laws provide for ‘casual leave’ – the employee can opt not to come to work that day without applying for leave in advance. Many organisations find this disruptive.
• Most state laws restrict women from working at night; if women are to work at night, specific approval must be obtained. This exemption is granted only to limited business sectors (eg, IT sector). Further, the employer must offer door-to-door transport and meet some security-related requirements.
• Most state laws prescribe overtime for any hours worked beyond 48 hours in a week. However, this is seldom observed.
• Indian law regulates and in some cases prohibits the use of contract workers. To engage contract workers, the contractor must hold a licence and the employer must be registered as a ‘principal employer’.
• Non-compete agreements are not enforceable under Indian law, while non-solicitation clauses can be enforced only in limited ways.
• While the ‘work for hire’ principle applies under the Indian copyright regime, it does not apply under the Indian patent regime; employees must thus provide formal assignments.
• Indian laws require employers to maintain a plethora of registers and notices. Compliance with such requirements is difficult and full compliance is rare.