Employees often leave their company after a certain period of time and after gaining their skills and knowledge to get better benefits from other new companies. This means loss for the company where employee trained and groomed. ❌
For this purpose, to protect the interest and goodwill of the company, the employment bonds were needed to be introduced. 📃
‼️Note - You cannot always escape by breaking the employment bond. (Read till the end)
✅ Bonds are applicable only if the company has spent money on the personal grooming and enhancement of the employees, but not just a training that helps employees perform better.
In the case of Kailash Kumar v. Syndicate Bank Ltdt The Delhi High Court held that since there were no training expenses incurred in the present case, the condition containing the employment bond would not be enforceable against the employee at the time of the employee’s resignation.
🔺 How safe are employees? Can an employer take an employee to court for resigning before the termination period?
This completely depends on whether contract is legally enforceable in India or not.
The employment bond should be drafted as per these two provisions -
✍🏻Section 27 of Indian Contract Act, 1872
Under Section 27, an employer is not permitted to put a restriction directly or indirectly which forces the employee to work for the employer or restricts the employee to practice any trade or profession.
AND
✍🏻Article 19(1)(3)(g) of Constitution
Article 19(1)(g)[3] of the Indian Constitution also gives rights to exercise a lawful profession, trade and business
When an employment bond is not in contrast with the above-mentioned provisions and reasonable in nature then it is said to valid in India.
‼️Restraints can be enforced only when the employee is in the service of the employer and these restraints cannot be enforced after the employee leaves service of the employer – irrespective of whether the employee leaves voluntarily or as a result of his/her service being terminated.
Remedy with the Employer -
If the employer has spent a considerable amount on Training and grooming of employee then employer can file a case claiming for damages.
