If you are stuck in such a situation, here is what to do.

Mr. Rohan Sharma, a bright young professional from a reputed institution, accepted an internship at ‘Innovate Dynamics Ltd.’, a technology firm in the city of Chandrapur. The offer included a six-month internship followed by a full-time position with a specified Cost-to-Company (CTC). After completing an extended seven-month internship, Mr. Sharma was called into a meeting with his manager and senior colleagues to discuss his transition to a full-time role.

During the meeting, the management claimed his performance was not up to their expectations and that he lacked enthusiasm. They then presented a new offer where the salary was nearly half of the amount initially indicated in the offer letter. The company justified this drastic reduction by pointing to a clause in the original letter that mentioned the salary was “up to” a certain amount, arguing that his performance did not merit the maximum figure.

To compound the issue, Mr. Sharma was informed that he would be required to sign a two-year employment bond. If he were to leave the company before the two-year period, he would have to pay a substantial penalty. When he pointed out that the bond was never mentioned in his initial offer letter, the management casually dismissed his concern, stating that such practices are common and not always disclosed upfront.

Feeling betrayed and cornered, especially after forgoing other job opportunities based on his trust in the company, Mr. Sharma was given a couple of days to either accept the new terms or leave. This situation left him in a state of shock and uncertainty about his legal rights and next steps.

Advice in such cases

• Document Everything: Keep a record of all communication, including the original offer letter, emails, and any written correspondence regarding the new terms. If discussions are verbal, send a follow-up email summarizing the conversation to create a written record.
• Do Not Sign Under Duress: Avoid signing any new agreement or bond immediately. State that you need time to review the documents and seek advice. Signing the document can be interpreted as your acceptance of the new terms.
• Review the Offer Letter: Carefully examine the original offer letter. The term “up to” provides the employer with some discretion, but a 50% reduction can be contested as an arbitrary and unreasonable deviation from the initial offer.
• Consult with Lawyer: The very basic and important step to start is talk to Lawyer / advocate. You should not hesitate in paying his consultation fee i.e. might be in range of Rs. 10,000 to 50,000 depends case to case. He is helping you in this situation of come out. He is expert in the domain and can help you explain the procedure which you might have never explored. A good lawyer can get the issues resolved much faster than you think.

Applicable Sections of Law

This situation primarily involves a breach of contract and unfair labour practices. The relevant legal provisions include:

• The Indian Contract Act, 1872: This Act governs the terms of the employment contract. Key principles include offer, acceptance, and consideration. A unilateral and significant change to the core terms (like salary) can be considered a breach of the original contract.
• Section 27 of the Indian Contract Act, 1872: This section deems agreements in restraint of trade as void. Employment bonds are often challenged under this section. Indian courts have consistently held that bonds are only enforceable to recover reasonable expenses incurred by the employer for the employee’s specialized training, not as a penalty to prevent them from leaving.
• Principle of Promissory Estoppel: If an employer makes a clear promise (e.g., a specific salary) and the employee acts on it (e.g., by rejecting other offers), the employer may be prevented from going back on that promise.
• Section 316 of the Bharatiya Nyaya Sanhita (BNS), 2023: If it can be proven that the company had a dishonest intention from the very beginning to induce you to join with a false promise, it could potentially amount to cheating. However, proving this criminal intent is often difficult.

If you are the complainant

• Send a Legal Notice: Your lawyer can draft and send a formal legal notice to the company. The notice will outline your grievances, cite the breach of the initial agreement, challenge the validity of the proposed bond, and demand that the company honour the original terms.
• Negotiate a Settlement: A legal notice often prompts the employer to negotiate. You might be able to reach a mutually agreeable solution, such as an improved salary offer or the removal of the bond clause, without resorting to litigation.
• File a Civil Suit: If the company does not respond favourably, you can file a civil suit for breach of contract, seeking specific performance of the contract or damages for the financial loss and mental anguish caused.
• Consult with Lawyer: The very basic and important step to start is talk to Lawyer / advocate. You should not hesitate in paying his consultation fee i.e. might be in range of Rs. 10,000 to 50,000 depends case to case. He is helping you in this situation of come out. He is expert in the domain and can help you explain the procedure which you might have never explored. A good lawyer can get the issues resolved much faster than you think.

If you are the victim

• Gather All Evidence: Collect your offer letter, all email communications, performance appraisals (if any), and any other document that supports your claim. Make notes of verbal conversations with dates, times, and names of people present.
• Do Not Resign Immediately: Resigning might weaken your position. It is better to formally communicate your non-acceptance of the new terms and state your reasons in writing.
• Seek Professional Guidance: This is a critical time to get legal advice. An experienced lawyer can assess the strength of your case and guide you on the best course of action.
• Consult with Lawyer: The very basic and important step to start is talk to Lawyer / advocate. You should not hesitate in paying his consultation fee i.e. might be in range of Rs. 10,000 to 50,000 depends case to case. He is helping you in this situation of come out. He is expert in the domain and can help you explain the procedure which you might have never explored. A good lawyer can get the issues resolved much faster than you think.

How the police behave in such cases

Police generally do not intervene in such matters as they are considered civil disputes related to breach of contract. Police involvement would only be warranted if there is a clear element of a criminal offence, such as cheating under Section 316 of the BNS, which requires proving dishonest intent from the outset. In most cases, the police will advise you to approach the civil court or a labour court for resolution.

FAQs people normally have

Is an employment bond legally enforceable in India?
The enforceability of an employment bond is limited. A bond is generally considered valid only if the employer has spent a significant amount on special training for the employee. It cannot be used as a penalty to simply stop an employee from leaving. A bond introduced after the initial offer, without prior agreement, is on very weak legal ground.

Can a company legally reduce the promised salary if the offer letter says “up to X amount”?
While the term “up to” gives the employer some flexibility, the reduction must be reasonable and based on objective, pre-defined criteria. A drastic, arbitrary reduction of 50% based on vague, subjective feedback can be challenged in court as an unfair and arbitrary practice and a breach of the spirit of the original offer.

What should I do if the company threatens to give a bad reference?
Threatening a negative reference to coerce an employee into accepting unfair terms is unethical. If the company provides a false or malicious reference that harms your future employment prospects, you may have grounds to sue for defamation. Focus on resolving the current dispute first with the help of your lawyer.

What evidence is required?

• The original offer letter detailing the internship and the promised full-time employment terms.
• Any email correspondence with HR or management regarding your role, performance, and salary.
• The new, revised offer or agreement presented by the company.
• Any performance reviews or feedback documents.
• Witnesses, if any, to the verbal discussions.
• Proof of having rejected other job offers based on this company’s promise (if available).

How long will the investigation take?

Since this is a civil matter, it does not involve a police “investigation.” The process is a legal proceeding in a civil or labour court. The timeline can vary significantly. After sending a legal notice (which usually gives 15-30 days for a response), filing a suit can take a few weeks. The entire court process, from filing the case to getting a final judgment, can take several months to a few years, depending on the complexity of the case and the court’s workload. However, many such disputes are settled out of court after a legal notice is served or during the initial stages of litigation.

Advocate Sudhir Rao, Supreme Court of India