Is Legal Action Taken by a Company for Breaking an Employment Bond Valid?

Introduction

Employment bonds, also known as employment guarantees, are a form of security that can be requested by companies from their employees as part of the hiring process. However, it is important to note that asking employees to deposit money for a job is illegal. If an employment bond is requested, no legal action can be taken by the company against the employee for breaking this bond. This article will explore the legality of company actions when employment bonds are involved and provide guidance on what employees can do if their cheques bounce.

Employment Bonds and Their Legality

Employment bonds are not legally binding or enforceable. Companies that require employees to provide a deposit as part of their employment contract can face severe legal consequences. Employees are under no obligation to provide such bonds, and it is illegal for companies to force them to do so. Any demands for employment bonds should be considered a scam and reported to relevant authorities.

Cheque Bounce: What You Need to Know

A cheque bounce refers to a situation where a cheque is dishonored by the bank due to insufficient funds or other reasons. When a cheque bounces, the bank issues a cheque return memo that details the reasons for non-payment. The holder of the cheque can resubmit the cheque within three months from the date of the memo, provided they believe it will be honoured the second time. If not, the holder has the option to pursue legal action.

Legal Proceedings for Cheque Bounce

The process for legal action starts with sending a legal notice to the cheque issuer within 30 days of receiving the cheque return memo. The notice should clearly mention all relevant facts regarding the transaction, including the date of depositing the cheque, the subsequent date of dishonour, and the nature of the transaction. If the cheque issuer fails to make a fresh payment within 30 days of receiving the notice, the payee has the right to file a criminal complaint under Section 138 of the Negotiable Instruments Act.

For the complaint to be valid, it must be registered in a magistrates court within one month after the expiry of the notice period. If the court finds in favor of the complainant, the delinquent party can be fined up to INR 2,000 or imprisoned for up to six months, or both, along with interest on the face value of the cheque.

Employee Rights and Protection

Understanding your rights as an employee is crucial when faced with such situations. If you are unsure about the legality of a company's actions or if you are a victim of a bounced cheque, it is advisable to seek legal advice. Many countries have legal blogs and forums where you can get expert advice tailored to your specific situation.

Conclusion

Employment bonds and cheque bounces can be complex issues, but understanding your rights and the legal process is essential. As a non-lawyer with experience in HR, my advice is to be wary of any request for employment bonds and to act within the bounds of legal guidelines. For more detailed and specific legal advice, consult legal professionals or legal resources specific to your country.