Daffodil International University
Faculty of Humanities and Social Science => Law => Topic started by: abduarif on February 14, 2015, 07:57:10 PM
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Saida Sharmin Esha
In the utmost competition, it is getting harder day by day to get a job in any profession even after having a set of degrees or top qualifications. After passing every stage, ie a written examination and couple of interviews, a person is offered a job with a bundle of terms and conditions. Now a days one of the terms is signing an employment bond for a specific period. Finding no alternative, a person accepts the job with all the terms and conditions.
Many companies, including banks and multi-nationals, make their employees sign an employment bond for a specific period so that employees cannot quit the organisation and join some other organisations before completing that specific period, otherwise s/he will have to refund the amount specified as bond value. Under the current circumstances, although employees sign employment bonds but every employee has a question on their mind whether such bond is reasonable, justifiable and enforceable by the law.
According to the labour law of Bangladesh, a permanent employee can terminate his/her employment by giving a two months’ notice or payment in lieu of notice and for contractual employees the notice period can be one month or payment in lieu. Therefore, if this is the legal requirement to terminate any employment on the part of the employee, on what basis the employment bond can be enforceable by the employer under which an employee cannot terminate his/her job unless the period stipulated in the bond is not completed.
Considering the employment agreement between the employer and the employee a contract, the contractual clauses in employment agreement will be governed by the Contract Act of 1872. Therefore, while incorporating contractual clauses it is necessary to keep in mind that the contractual clauses have to be reasonable in order to be enforceable by the law.
According to the contract law, the employment bond will be valid and enforceable if it fulfils the following conditions:
The parties agree to sign the contract with their free consent, ie without force, undue influence, misrepresentation, or mistake
The conditions must be reasonable, and
The conditions imposed on the employee must be proved to be necessary to safeguard the interests of the employer
Furthermore, consideration on part of the employer is necessary, ie the employer will spend money on the employee for his training.
Therefore, it is reasonable for employers to incorporate employment bonds in the employment agreements and accordingly take bonds when they hire employees for a particular project or for a job for which the employer will spend money on employees’ training, otherwise if employees leave the employment without serving the employers for the agreed period, the employers will suffer losses.
Moreover, in order to be enforceable by the law, the employment bond has to be drafted with reasonable terms and conditions including the compulsory employment period and amount of penalty in case of breach of such terms. The penalty amount should be based upon the actual loss incurred by the employer and not beyond it.
In other words, the conditions stipulated in the bond should justify that it is necessary to safeguard the interest of the employer and to compensate the loss if the employee leaves the company before completion of the period specified in the employment bond and the penalty should not be exorbitant.
However, in reality, most of the companies want a five-year bond from the employees and the penalty in case of breach of such employment bonds is that the employees will have to return one year’s salary to the employers. Even some of the companies also mention that the provident fund is subject to completion of a five-year service, otherwise the employees will not be entitled to receive benefits of provident funds.
Such conditions seem to be unreasonable. In worst scenario, employers do not issue the release letters when employees want to resign or terminate their employment before completion of the compulsory period stipulated in the employment bond. Without release letters from the previous employers employees become unable to join any other company and therefore suffer a lot.
Such kind of act on the part of an employer, eg retaining the original educational certificates, or creating any kind of impediments for the employees to join another job should be considered as illegal.
Although employees are reluctant to raise questions on any exorbitant term but employers should be aware that any exorbitant term can be challenged on the basis of the provisions enshrined in the Constitution of Bangladesh and under other relevant laws ie, labour law, contract law, etc.
Article 34 of Constitution of Bangladesh provides that “All forms of forced labour are prohibited and any contravention of this provision shall be an offence punishable in accordance with law.” In addition, Article 40 of the Constitution of Bangladesh ensures freedom of profession or occupation which is lawful.
The enforceability of an employment bond can also be challenged on the ground that it restrains the lawful exercise of a profession, trade or business. Section 27 of Contract Act 1872 provides that every agreement by which any one is restrained from exercising a lawful profession, trade or business of any kind, is to that extent void.
To take up any lawful profession or occupation is a fundamental right. Therefore, any term and condition of the employment agreement which directly or indirectly either compels employees to serve employers or restrict them from joining other employers is violation of the fundamental rights and thus are not tenable in the eyes of law. An employee by signing a contract of employment does not sign a bond of slavery.
In view of the aforesaid discussions, an employment bond will be considered to be reasonable if it is necessary to protect the interests of the employer, and the employment bond is drafted with appropriate compulsory period and reasonable amount of penalty. Otherwise, the validity of the such employment bonds may be questioned.
Saida Sharmin Esha is Barrister-at-Law and an Advocate.
See more at: http://www.dhakatribune.com/juris/2015/feb/12/legal-status-employment-bonds#sthash.GIecy0P3.dpuf
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"To take up any lawful profession or occupation is a fundamental right. Therefore, any term and condition of the employment agreement which directly or indirectly either compels employees to serve employers or restrict them from joining other employers is violation of the fundamental rights and thus are not tenable in the eyes of law. An employee by signing a contract of employment does not sign a bond of slavery.
In view of the aforesaid discussions, an employment bond will be considered to be reasonable if it is necessary to protect the interests of the employer, and the employment bond is drafted with appropriate compulsory period and reasonable amount of penalty. Otherwise, the validity of the such employment bonds may be questioned."
I never think in that way. Thanks sir for uploading this.
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You are most welcome. From the beginning of my professional life, I was worried about signing any kind of employment bonds. Although I do not like to switch jobs very frequently, I am not in favour of taking bonds either. You can not expect good service from a person under any bond.