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Old 13th September 2006, 12:37   #16
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Quote:
Originally Posted by condor
kutlee, can you pls explain the 'unilateral bond' you mentioned? I am trying to understand what is unilateral about it.
The bond you mentioned was there when you joined, and you knew about it. Verbally stating of conditions is one thing. Is there any document you have signed, that states this bond?
Curious, but how did your present company accept you without a relieving letter?
The bond just says i can't leave without completing 3 years. period. thats it. but logically i signed it seeing the offer. why would anyone sign any contract if there is no benefit both ways. I was kind of 'rare skilled' stuff. The second company understood the situation and accepted. They took 3-4 guys from the same team. There was no proejct in our skills and were kind of bench- no proper plan etc etc (we just had some exp in the rare skills)...and the offer at the time was too good.
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Old 13th September 2006, 14:27   #17
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Quote:
Originally Posted by kutlee
The bond just says i can't leave without completing 3 years. period. thats it.

There was no proejct in our skills and were kind of bench- no proper plan etc etc (we just had some exp in the rare skills)...and the offer at the time was too good.

What was the bond for ? Did they invest training etc.?

If on bench, you could argue that you were in danger of jeopardising career due to lack of prospects
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Old 24th March 2010, 11:50   #18
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Default Are bond agreements signed by IT companies valid?

Hi,
I recently read somewhere that according to a ruling by the Supreme court of India, bonded labor is now illegal in India. But some of the IT companies still continue to ask people to sign bonds. Is it just used as a scare tactic to deter people from leaving the organization?

Also what does that ruling exactly say? Just that a company cant forcefully ask people to work for them or does it also mention that companies cant ask people who break such bonds to pay up?
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Old 24th March 2010, 11:57   #19
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Hooligan, Bonded labour is different and employment bonds are different. Bonded labour is banned in India. As are employment bonds. Under the Contract Act, there can be no restriction on trade and profession. So any agreement that compels you to work for someone is void. However, there are certain exceptions in terms of if you possess proprietary information or data, then you may be stopped from using such data.

As a recent practice, nowadays, instead of employment bonds, the contract stipulates that if the employee leaves within a certain period, he would have to pay a certain amount of money to the employer.

The law in this regard is pretty nebulous as well as difficult to enforce since no employer would want an unwilling worker.
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Old 24th March 2010, 12:00   #20
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I am also looking for an answer to the same question. My wife last week joined in an IT company who wanted a bond for 30 months. Since she was joining as a fresher, we decided to sign the bond. They printed the terms and conditions in a Rs.50/- stamp paper and my wife and me had to sign in it agreeing to all the terms and conditions.
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Old 24th March 2010, 12:11   #21
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Sorry for OT post, but would like to warn a bit.

I am not sure if they are valid or not, but the issue is that if one leaves job, the company might refer to NASSCOM. Again, I dont know how many companies still refer to Nasscom, but its good to be on the safe side.

As far as possible, stay away from them. I have seen many cases where people have suffered.

My arguments on bonds :

1) Company must give in written about my pay rise.
If the company says it depends on performnace, I would say that make me sign bond only after you see my performance during training period.

2) Argument 2 from company :
We have not opened training centers, what if you leave company ?
Well the answer is that just as two companies are competiting in market, there is competition between companies to hire good people. If I am leaving job after training, it menas you are not paying good to employee, i.e. you are paying lower than the market value of the employee.

Morality with IT companies is absent. I have seen many of Computer Engineers and BCA/MCA guys suffer as they were made to work in night shifts ( which was not stated earlier and in Interview the fresher did say that he/she cannot work in night shift ), made to work for 18 hours, etc.
Here uneven distribution of work is done and the one who has signed bond will face a lot of issues.

IMHO, before sign a bond only if its 3.6+ PA package. Not for Rs. 75-80K PA. I was asked to sign a bond for Rs. 96K PA, and I refused unless they promised me hike. If hike is dependent on performance, bond will be signed after they analyze my performance after training period.

For a fresher, most of the times, bond is another form of exploitation as companies are not confident of
a) their work environment
b) pay scale
c) Ethics.

PS : My friend was in one of the major IT companies after he signed bond for 3 years. During this period, despite health concern and issues he was made to work in night shifts and even at the end of 3 years, his salary was the same. He used to work for 12+ hours a day. Leaves were another issue. He managed to come back to Vadodara after around 2 years that too for his sister's marriage.

All I want to say is be cautious and read what they have written on the papers. Do ask if you have any doubts and be very specific.
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Old 24th March 2010, 12:14   #22
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Quote:
Originally Posted by Anoop RD View Post
I am also looking for an answer to the same question. My wife last week joined in an IT company who wanted a bond for 30 months. Since she was joining as a fresher, we decided to sign the bond. They printed the terms and conditions in a Rs.50/- stamp paper and my wife and me had to sign in it agreeing to all the terms and conditions.
Signing on bonded stamp paper is one thing. An agreement registered in the registry office has more standing. All you need to do is assess how much training inputs are really given and how much productive revenue generating work your wife delivered. If there is a return on investment, that coupled with a non competitive salary means the company has very little to stand on.

Issue will be that they might withold any documents you may have given or not issue a no dues / discharge certificate.

Retain yor payslips.
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Old 24th March 2010, 12:23   #23
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It is very much valid.
If you look at the contents, it would say that the bond amount is the cost spent by the IT company towards the training and infrastructure provided for the trainee.
In case you need to break the bond you may have to make good these costs.
Even if you break the bond, it is very likely that the companies may take legal action, but the catch, you cannot go back to them for reference and you cannot showcase your experience with the company.

It's always better to have a smooth exit from any company.
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Old 24th March 2010, 12:23   #24
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Quote:
Originally Posted by ajmat View Post
Signing on bonded stamp paper is one thing. An agreement registered in the registry office has more standing. All you need to do is assess how much training inputs are really given and how much productive revenue generating work your wife delivered. If there is a return on investment, that coupled with a non competitive salary means the company has very little to stand on.

Issue will be that they might withold any documents you may have given or not issue a no dues / discharge certificate.

Retain yor payslips.
Would just like to clarify. It does not matter what training you have received, what is the revenue generated or whether the agreement is on stamp paper or not. Any agreement which restricts any person's right to work is void and not enforceable. A case in point is the airlines sector. Every airline company makes its pilots sign bonds and then incurs heavy expenditure on their training. Even so, such bonds have been held to be unenforceable by the courts. So there is no question of them restricting your right to move away. However, if the bond requires you to pay them some money, then that may be enforceable. This will depend on case to case keeping in view the job profile, the nature of work etc etc. In my opinion, if such payment restricts your ability to move out of a job, the same will not be enforceable. For example, if your salary is Rs. 50,000 per month and your bond requires you to pay the company Rs. 6,00,000 if you move before 1 year, the same would not be enforceable.

On a related issue, for the company it does not cost much to initiate legal action. The harassment it may cause to the employee or his future employer acts as a deterrent to shifting.

@Ikoneer - Undoubtedly the bond will say that. This is what we lawyers are advising them to do in order to get around the legal bar on contracts which restrict employment. However, the companies are well aware that if the monetary compensation required to be paid as training cost etc. are onerous, the bond may be struck down. This is not just my view but also advice that has been consistently given to some of the top companies in India.

Last edited by mysticmonkey : 24th March 2010 at 12:34. Reason: reply to ikoneer's post.
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Old 24th March 2010, 12:44   #25
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So if my company has paid me Rs.x till date, its illegal to ask 2x/3x in return if I break the bond?
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Old 24th March 2010, 12:52   #26
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If the companies want to take you for a ride they will. How you smell it out depends upon how desperate you are for the job.
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Old 24th March 2010, 13:10   #27
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@Spitfire - Very well put.
@Hooligan - It would depend on the kind of work you are doing, your training, designation, the sector you are working in etc. but yes anything disproportionate will be struck down.
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Old 24th March 2010, 14:08   #28
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Quote:
Originally Posted by mysticmonkey View Post
This is what we lawyers are advising them to do in order to get around the legal bar on contracts which restrict employment. However, the companies are well aware that if the monetary compensation required to be paid as training cost etc. are onerous, the bond may be struck down. This is not just my view but also advice that has been consistently given to some of the top companies in India.
From your posts it makes me feel that the bond does not have any value add and the employees are safe from any legal proceedings.

Could please clarify the basis a bond is made then?

Is it just to exploit / harass employees who may not be aware of the legal proceedings.
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Old 24th March 2010, 14:28   #29
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Quite a few labor laws are not being followed in India. For example, as per labor law, a company can not have a notice period of more than 30 days. But we have zillion companies in India forcing employees to serve notice period of more than 30 days (I have heard some companies have notice period of 3 months).
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Old 24th March 2010, 14:35   #30
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Bonds have a deterrent effect. Plus cause a lot of harassment to the employee. There are cases where the former employer may send a notice to the new employer highlighting the bond and informing the new employer of the legal recourse being taken. In addition to that, if there are issues pertaining to intellectual property or proprietary information, then the former employer may initiate legal proceedings to prevent misuse.
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