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"Query on Enforceability of Undisclosed 18-Month Bond and Penalty Clau


13-Mar-2025 (In Corporate Law)
I joined Company as Research Associate. Post-joining, they introduced an 18-month bond with a Rs. 1,00,000 penalty in the Service Agreement. This was not disclosed in the interview, JD, offer, or appointment letter. Questions: 1. Is the bond enforceable without prior disclosure? 2. Can they impose a penalty or withhold wages/certificates? 3. Should I sign, negotiate, or take legal action? Please advise on my rights and next steps.
Answers (1)

Answer #1
580 votes
No, an employment bond that was not disclosed in the interview, job description (JD), offer letter, or appointment letter may not be legally enforceable. Employment contracts must have clear terms, and employees should be informed before joining. A company cannot impose a penalty arbitrarily. If a bond exists, a company must prove that it suffered actual financial loss due to early resignation. They cannot withhold your salary. Do not sign immediately. Since it was not disclosed you have the right to challenge it. Negotiate for shorter bond period or lower penalty. If they force you to sign or threaten penalties, you can file a complaint with the labour commissioner. Better consult a lawyer and send a legal notice challenging bond unless you really need this job. Few things to consider- 1. Talk with HR about this in writing 2. Keep records of all the communications
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