Apni Law Staff asked 6 months ago
I joined a new company a few months ago and signed a document on an A4 sheet. It mentioned a two-year bond and a Rs. 45,000/- penalty if I left before completing the term. Unfortunately, I had to leave after three months due to health issues. Now, the company is demanding the full penalty amount, threatening legal action if I don’t pay. Is this bond agreement legally valid under Indian labor laws?
Best Answer
Apni Law Staff answered 6 months ago
Under Indian labor laws, a bond agreement with a penalty clause is generally valid. However, the penalty amount should be reasonable and proportionate to the actual loss incurred by the company. Since your departure was due to health issues, you can contest the full penalty amount and try to negotiate a lower sum based on your circumstances.
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