Employment bonds can be void if they impose unreasonable restrictions, are coercive, or violate public policy, especially considering the unequal bargaining power between employers and employees.

ORDER :

Nagesh Bheemapaka, J.

The short question for consideration is whether “minimum service bond” signed in an employer & employee relationship is valid as per the mandate of the Constitution of India or not.

2. In the present writ petition, petitioner challenges the inaction of Respondent No. 1 - Commissioner of Labour, Telangana through Respondent No. 3 – Joint Commissioner of Labour, RR District against Respondent No. 4 - Algonox i.e. petitioner’s employer, who had made him sign an "employment bond" and extorted Rs.5,90,000/- (Rupees five lakh ninety thousand) from petitioner, by not relieving him from the job unless he makes such payment and citing the "Bond" which they made him sign under duress (i.e. issuing the bond one month after employment and "in total issuing employment bonds three times to the petitioner) and harassing and causing immense mental trauma and financial distress to petitioner.

3. Petitioner states that he had joined Respondent No. 4 as an intern during June to August 2019 and was issued a full time employment offer in September, 2019 through offer letter dated 01.09.2019 and joined the employment under Employee ID: 1182, on 01.09.2019. Petitioner was made to sign employment bond viz."Surety agreement" for minimum duration of employment by Respondent No. 4 as follows:

i. 1st Bond, October 2019, for 24 months

ii. 2^nd Bond, June 2021, for 12 months

iii. 3^rd Bond, April 2022, for 26 months

According to petitioner, 2019 and 2021 surety bond copies were not given to him.

3.1. Petitioner states that making an employee sign an ‘Employment Bond’ after one month of employment, is clearly abuse of their dominance position, under which getting a signature from the employee, who is in a weaker position is easy, thus violating the principle of ‘Free Consent’ under Section 16 (undue influence) and 14 (Free Consent) of the Indian Contract Act, 1872 (1872 Act) as such, the contract being one- sided, the said "Employment Bonds" are void in nature. Further, petitioner states that, every time he wanted to resign from the services due to the hostile work culture, illegal labour policies, abusive work allocation (i.e. making him to work for 12-15 hours a day); petitioner cited the ‘Bond and asked to stay and then later hiked salary nominally. Yet, under some or the other pretext, petitioner was asked not to resign. Being vexed with the bonded labour culture, petitioner had finally decided to resign and submitted his resignation on 11.08.2023 via e mail to Respondent No. 4, who, in turn, refused via e mail on 12.08.2023 to accept his resignation and cited that to break the "Employment Bond" (the 30% bond), petitioner has to pay a total of Rs.5.9 lacs INR to them, and only then, they will accept his resignation.

3.2. Petitioner further states that after receiving refusal to accept his resignation from respondent No. 4, he filed a representation with Respondent Nos. 2 and 3 on 10.10.2023, after which a joint meeting was called vide notice dated 17.10.2023, (meeting dated 20.10.2023) to solve the issue amicably. Yet, while the discussions were in progress, the employer was adamant on NOT accepting his resignation and threatened petitioner that he would face dire conseq