Legal Question in Employment Law in India

Hello

My employer has a contract in the agreement which states that if the employee is not able to serve the entire notice mentioned in the contract he would have to pay 3 times his gross salary for the shortfall in the number of days to the company ... My question is .. is this clause valid and legal according to the law.... The clause is

You acknowledge and agree that we have spent a considerable amount of time and resources in

recruiting you to the Company and further acknowledge and agree we may suffer considerable

damage if you leave without providing full or adequate notice of termination pursuant to clause 1.4

above. Such damages will include but not be limited to the costs of recruiting a permanent

replacement and/or retaining a temporary replacement pending the recruitment of a suitable

permanent replacement. You therefore agree that if you fail to give full notice of termination of

employment in accordance with clause 1.4 above, you will pay to us as a liquidated sum an amount

equivalent to three times your Base Salary for the whole of the period represented by the shortfall in

notice due to be given by you to us under clause 1.4. You agree that this represents a genuine preestimate

of the losses we are likely to suffer in the event that you fail to give full contractual notice.


Asked on 8/16/13, 11:59 pm

1 Answer from Attorneys
Fca Prashant Chavan Expert Edge LLP

18.08.2013

Dear Sir / Madam,

This condition in your appointment letter is draconian and absolutely illegal, liable to legal action, since it tantamounts to "bonded labour". Whether you wish to work or not in a Company is purely left to your own decision and it is your birthright. If the Company issues a legal notice asking you to pay notice period salary, straightaway lodge an FIR against the HR Department Head in the local Police station. Re-post query if the Police do not intervene and resolve the matter within 3 days.

Regards,

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Answered on 8/18/13, 4:23 am


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