- Modi govt trades less in-hand salary for fat PF
- EPFO Withdrawals : 8 mn dig into retirement fund
- Delhi HC Issues Notice On Plea For Increasing Number Of Labour Courts
Old/New Cases of Importance
- Dismissal from service for absenting due to medical reasons should have been modified (Madras HC)
- Trainee is not a ‘workman’ under the ID Act (Delhi HC)
- Casual employees engaged for maintenance of guest house to be covered by ESI Act (Madras HC)
- Remittance of EPF dues in instalments may be permitted subject to sufficient cause (Kerala HC)
- Engaging daily wager for 10 year would amount to unfair labour practice (Delhi HC)
Good Reads
- Why Salary Increases Do Not Keep Pace With Inflation
- An Antidote to the Great Resignation
- Designing Work That People Love
- Stop Selling. Start Collaborating.
- The Next Great Digital Advantage
Videos This Week
Are G-Sec Bonds Better than EPF
Starting a New Business – How to Save Maximum Tax
When the Employment Bond is a Trap
The employment bond holds a lot of significance in the lives of both the employer and the employee. It provides both the parties a certain assurance and protection of their rights.
However, it is also used by many employers to take advantage and exploit employees. You must have heard from a friend or a relative about their boss who has either not paid the dues post resignation or does not accept the resignation or keeps extending the notice period and harassing the employee etc. These are usually a result of not reading and comprehending the bond before signing or because of lack of knowledge.
To avoid such traps, one should consider the following points when signing an employment contract.
- Read the employment contract very carefully and take your time to sign it.. You can take your time to read and consult a lawyer or your family and friends in case of any apprehensions. If there is pressure from the employer to sign immediately, that is the first and most important red flag for the employee.
- The non-compete clause is another element which needs to be understood carefully. It is reasonable only when it doesn’t allow you to share the information which can potentially harm the company.
- The bond should not render you incapable of working in the same industry post employment.
- One way indemnity bonds or unilateral bonds are the ones that should scare you the most. If it mentions the provisions to cover the losses of the employer, it should equally protect the interests of the employee too. Any such bond should make you question and ask for change.
- Feel free to ask questions and request changes. Do not hesitate to ask questions and discuss your doubts and concerns with the employer. If need be you can request for changes too.
- Any period of restriction for employment in the same industry or field should not go beyond 12 months and should be compensated. Anything beyond, would jeopardise your career and is not negotiable.
- Do not agree to submit your documents as a security ever. Any such bond is illegal and can lead to the employer landing in a soup if such a bond is contested in the court.
These are critical concerns because, while you may not have a crystal ball while signing the employment contract, the contract, once signed, might have substantial consequences for you both during and after your employment. However, it is not the end of all. There have been many cases in the court of law where the employment bonds were declared null and void for the absurd conditions they laid.
For example, in the case of Scipa India Limited v. Manas Pratim Deb, before the Delhi High Court. Manas had signed some bonds in the course of his employment with Scipa India. As per the bonds, Manas was bound to serve for five years or pay a sum of Rs.2 lakhs per bond, if he left the service before the period of bond ended. The Respondent resigned three years before the expiration of the second bond. So, the company sued him for Rs. 2 lac each for both the bonds. The trial court dismissed the case and awarded an adjusted compensation of Rs.44, 300 stating that the period of first bond had almost expired, hence claiming Rs.2 lakhs for the same was unreasonable. Hence the bond was unenforceable.
Many such case examples exist where many exploitative employment bonds were declared null and void by the court. Yet there are several employees who suffer due to lack of awareness regarding these provisions. If you know someone like this ask them to checkout LLA Consult
Data Digest
The lack of awareness about clauses and norms of an employment bond in India is owed to the huge crisis of skilled labour. Employers take advantage of the sensitive condition of the employees seeking employment which leads to exploitation of employees.
Source: Manpower Talent Shortage Survey via OECD
See you until next time!