Queries
Dear sir, i am working in one of the pharmaceutical company in jedcherla. One half year back i joined in this company as a executive.while joining time i signed on service agreement of 2 yrs and i deposited 10th orginal certificate.but til now they dint given any increment.not only for me .all the employees has same situation. so one month back i got a good offer and i given resignation to my manager.but the are not accepting and i talked with hr also they are not giving proper conformation. They are saying MD told don't accept any resignation till 6 months. So please help me now what have to do.how to proceed with them.please help me.
24th November 2017 From India, Karimnagar

Dear Kunchala,

The concept of employment bonds or service agreements has become prevalent in India as an attempt to control the increasing attrition rate. With 'job hopping' becoming a common phenomenon, often employers find the need to safeguard their interest by way of such bonds.

Service agreements are broadly covered/ protected by the Indian Contract Act, 1872 so long as the agreement was formed with the free mutual consent of both the parties (employer and employee) without fraud, undue influence, mistake, misrepresentation and/ or coercion. Since you have served a period of one and a half years already, I am inclined to believe none of these influenced your service agreement.

So far as your interest is concerned, please note that the validity and consequent enforceability of the service agreement can be challenged under Section 27 of the Indian Contract Act. This section essentially prohibits any agreement which causes restraint in the pursuance of a trade and profession. A Supreme Court judgement (Central Inland Water Transport Corporation v. Brojonath Ganguly (1986) IILJ 171 SC) laid down that wherever the terms and conditions of an agreement, whether directly or indirectly force an employee to serve the employer (or put a restriction on the employee joining another employer), such agreement shall be deemed invalid under the Indian law. As such, an employee would have the right to resign from his employment despite the existence of a service agreement.

Please note that while the employer cannot deny accepting your resignation on the grounds of the service agreement, he also has access to certain recourses owing the the agreement. Should the employer so claim (and prove) that he has incurred considerable amount of expenditure on the employee's initial training and retention, he shall be entitled to recover such damages.

I hope this provides you with a brief overview of your position and you are able to plan your course of action accordingly.

Best regards,
Citelegal
26th November 2017 From India , Delhi

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