Legal Question in Employment Law in India

Hi ,

Usually top MNCs(or IT companies) in India use a concept of "legal bond" when hiring Freshers(college pass outs) . In this the usual clause will be that "the employee will not leave the company before a certain amount of time(say 2 years) . In such circumstances the employee must pay the bond amount(say 1Lakh) towards the company". In excitement of getting a job in top MNC and ignorant to the consequences of such commitments people tend to sign such bonds.

My question is is this a valid bond because this practice emphasizes on Bonded Labor and as far as I know it is banned in India?


Asked on 11/22/10, 10:45 pm

2 Answers from Attorneys
RAJIV GUPTA (Cell: +91 9811284735) [email protected]

unless i go through the contents of bond, i cannot comment further.

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Answered on 11/22/10, 11:07 pm

HI,

See these contracts are not banned as such in India. The only thing which needs to be taken into consideration while signing such bonds that the bond should not be one sided, that is to say it should not be solely for the benefit of the employer. An employer can definiatly sign an employment contract with his employee setting out the conditions of his employment , along with it an employer should also set out conditions , breach of which would entail the employee to take any action( Compensation, Termination etc. )

In India such contracts / bonds are governed by the Indian Contract Act and the termination or breach of such contracts are governed by the above act.

Yes if the contract has been entered into by the employee by coercion , misrepresentation, fraud , undue influence , the employee has always an option to resinde such contract.

For more discussion you may contact us on 09811617186.

Warm Regards

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Answered on 11/23/10, 10:34 pm


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