Is giving a blank cheque as a guarantee for a bond period legal?


It is legal for a company to ask an employee to stay employed in that company for a fixed duration as a bond period.
But it the question of a blank cheque is questionable.

Another thing to take into account is the validity of employment bonds.
It is usually applicable if the company has trained the employee, and now wants a guarantee that the said employee will work for a definite time to cover the cost of training.
However if it’s a new company and you have not received any training from this company, then the employment bond is legally questionable.

From Toshnial Brothers (Pvt) Ltd v E Eswarprasad & Ors (MANU/TN/0511/1996), Sicpa India Limited vs Shri Manas Pratim Deb (MANU/DE/6554/2011), employment bonds are enforceable if following requirements are satisfied:

• The employer has actually spent money on the employee,
• The said expenditure is in lieu of a promise from the employee that he or she would not leave the employment for duration specified in the contract,
• The employee has breached the contract and left the employment before the stipulated period,
• On account of the breach, the employer has suffered loss.

On this note it is not safe to give the company a blank cheque. The company can use the cheque for any immoral purpose which will make you fall into trouble.
You have to take the decision of joining the company. If the company didn’t train you that it can’t take an employment bond. It can be challenges in court.
You can instead convince the company to frame an agreement for employment for a fixed duration, in place of the bond.

Reference: Toshnial Brothers (Pvt) Ltd v E Eswarprasad & Ors (MANU/TN/0511/1996);

Sicpa India Limited vs Shri Manas Pratim Deb (MANU/DE/6554/2011)



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