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Employment Bond For Sponsoring Higher Education

Discuss anything relating to Consumer Law

Employment Bond For Sponsoring Higher Education

Postby zebulon71 » Tue Nov 29, 2016 11:45 am

Hi Arun,

I have been working with an IT MNC since 2005. In 2009, I was selected for an MBA program to be sponsored by my company. We around 20 selected people signed a Bond for commitment to serve for 3 years after completion of MBA. Our program completed in April 2011, therefore we are supposed to serve until March 2014.

Anybody leaving company in first year will have to pay 5 lacs, in 2nd yr 3 lacs, in 3rd yr 1 lac.

After completing MBA, I asked my company to recognize it in terms of Grade & Salary, to bring it at par with MBA recruits hired from B-Schools by them. To which they didnt act upon.

My question is,

1) Though there is a commitment to serve, Can a company continue to exploit the abilities gained through the education by not recognizing it ? in other words, How fair it is to recover the money invested through these means ?

2) One of the candidates who signed the same Bond, have left the company and they didnt enforce Bond conditions on him, Can they discriminate between employees and enforce it on me ?

Do I have strong legal grounds to pursuit in case they enforce it on me ?

Thanks in advance
zebulon71
 
Posts: 74
Joined: Wed Feb 13, 2013 11:16 am

Employment Bond For Sponsoring Higher Education

Postby trucker » Thu Dec 01, 2016 9:32 am

Hi Arun,

I have been working with an IT MNC since 2005. In 2009, I was selected for an MBA program to be sponsored by my company. We around 20 selected people signed a Bond for commitment to serve for 3 years after completion of MBA. Our program completed in April 2011, therefore we are supposed to serve until March 2014.

Anybody leaving company in first year will have to pay 5 lacs, in 2nd yr 3 lacs, in 3rd yr 1 lac.

After completing MBA, I asked my company to recognize it in terms of Grade & Salary, to bring it at par with MBA recruits hired from B-Schools by them. To which they didnt act upon.

My question is,

1) Though there is a commitment to serve, Can a company continue to exploit the abilities gained through the education by not recognizing it ? in other words, How fair it is to recover the money invested through these means ?

2) One of the candidates who signed the same Bond, have left the company and they didnt enforce Bond conditions on him, Can they discriminate between employees and enforce it on me ?

Do I have strong legal grounds to pursuit in case they enforce it on me ?

Thanks in advance
trucker
 
Posts: 48
Joined: Thu Mar 31, 2011 5:03 pm

Employment Bond For Sponsoring Higher Education

Postby Werner » Sun Dec 04, 2016 11:52 pm

Generally a service bond is illegal in India as it is one sided. Further, as per Section 27 of the Indian Contract Act, 1972, it is not legally valid, being agreement in restraint of trade, profession or business . Percept D Mark(India)Pvt. Ltd. Vs. Zaheer khan(2006)4 SC 227. Bonds are applicable only if the company has spent money on the personal enhancement of the employees However,it should  not just be a training that helps the employee to perform better. Moreover, in the event of breach of contract, the employer cannot recover anything more than the actual reasonable loss suffered by them.The Supreme Court of India has clearly stated that no employee can be forcefully employed against his will, just because he has signed a contract with the employer. Therefore,enforceability of a particular restrictive agreement depends upon the facts and circumstances of each case. The object is to maintain greater flexibility and bargaining power to the employees. It is fully at the discretion of the employer to fix the pay of an employee.They take into account several factors including their own financial conditions, size of their organisations,caliber of the selected employees,present market rates etc.Once you have accepted the contract, you are legally bound by it.There is no merit in comparing the accepted scale with the scale of similar competitive businesses and then grumble for the same before your present employer.You could have demanded better scale of pay before accepting the offer.Moreover,if you are dissatisfied with your scale,then you can try for a betterjob and leave the organisation by complying with the termination clause contained in the contract..

In view of the above,my advice is that in case you get a really better opportunity, you should certainly leave but after serving a notice as per the termination clause contained in your contract.Under no circumstances,you should pay any amount from your own pocket.If at all any amount is actually recoverable by your employer on account of pre-mature termination of contract, they can recover it against your outstanding dues.They can demand only the actual reasonable loss suffered, if any ,by them and nothing more.
Werner
 
Posts: 38
Joined: Sat Jan 11, 2014 9:24 am


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