Why do employees need to give a blank cheque and bond to serve a company? How Is it legal to take blank cheque as security?


It is illegal for a company to force servitude by way of bond. The good news is that even if you give them a check, you can ask your bank to cancel the check, so your company is just holding a piece of paper, and they cannot do anything about it legally if your check bounces. No. What you have to give is a cheque that has been crossed out and made invalid. This is needed to get all the details of your bank account for the company to transfer salary and other perks.

A bond is a different matter. Many companies get a bond from potential employees as they feel employees are not dependable. They will learn from you and jump ship at the first opportunity. This is quite a common habit among well-educated ‘engineersÕ in India. One guy joined our company at a senior position when he was waiting to be posted in Germany. He wasted 6 months of his and our time.

I am not sure about the bonds as I do not personally and professionally encourage the practice. However, the blank cheque part I can shed some light upon, having once worked in a companyÕs compensation and benefits department. With so many fake profiles in the market and so many frauds happening around the world by people, taking a blank cheque from an employee.

Reference: NI act – 202100499-20210041-10416



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