The video explains that employment bonds in India are subject to strict legal limits. While bonded labour is prohibited under Articles 21 and 22 of the Constitution, a bond can be valid only if it is executed on properly stamped paper, signed by both parties, and does not infringe on the employee’s fundamental right to freedom of occupation under Article 19. The presenter highlights Section 388 of the Indian Penal Code, which makes it a criminal offence for an employer to retain an employee’s documents or extort money by threatening to withhold them. Finally, the speaker clarifies that an employer may recover a reasonable amount for actual training expenses only if such a clause is expressly mentioned in the stamped contract; otherwise, any arbitrary penalty for leaving early is unenforceable.
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So employment bond is legal or not? No doubt employment bonds are actually very scary. For example, you have to pay ₹2 lakhs if you leave the company before 3 years. Isn't that scary? Yes, and this is one of the most common issue that most of the employees across the globe are facing because of the employment bond that they sign in the early stage. So if you're facing the same issue and you're not really sure what to do, let me help you with that. First thing first, bonded labor in India is prohibited. You can read Article 21 and Article 22. Also, for any employment bond to be legally valid, it It has to be put up on a proper stamped paper with an appropriate value and then signed by the both parties. Now, if you're stuck in the same situation, you need to understand 3 important points right away. Point number 1, Article 19. Now, Article 19 is nothing but fundamental right and freedom, which means that no employer in the world can ever force you to stay in a specific company for a longer duration and then ask you for money if you leave before a periodic time, because that is going to be a violation of your fundamental rights and freedom. Point number 2, Section 388, Indian Penal Code. If your employer has any of your legal document and forces that, you know what, I'm only going to release your document after you pay the penalty. That is a punishable offense, a crime as per Section 388 of Indian Penal Code, which is extortion by threat. Point number 3, when can you actually be charged? Well, don't worry, you can only be charged under one circumstance where the employer has actually spent some amount on your training while you are there into the company, which has to be reasonable and also mentioned into the contract that you have done on the stamp paper. If not, they can't charge any random amount from you.
