The validity and applicability of the employment obligation may be called into question on the grounds that it limits the legal exercise of the profession, activity or activity. Under Section 27 of the Contracts Act 1872, any trade or profession restriction agreement is null and void. Therefore, all the terms of the agreement that directly or indirectly require the worker to serve the employer or prevent him from joining a competitor or other employer are not valid under the law. The worker does not sign slavery by signing an employment contract and, therefore, the worker still has the right to leave the job, even if he has agreed to serve the employer for a specified period of time.1 However, the restrictions or negative agreements of the agreement or contract may be valid if they are appropriate. For a restriction clause to be legally applicable in an agreement, it is necessary to prove that it is necessary for commercial freedom. For example, if the employer can prove that the employee joins the competitor to disclose his trade secrets, the court may issue a referral order that limits the worker`s employment to protect the employer`s interests. Whenever an agreement is called into question because it is subject to trade restrictions, the counterparty must demonstrate that the deference is appropriate to protect its interests.2 As noted above, the conditions set out in the employment obligation should be reasonable to be valid and, therefore, even if the contract provides for unreasonable terms or clauses such as the imposition of an exorbitant length of forced labour or a high penalty for the worker. , the court will only compensate if it finds that the employer has suffered a loss as a result of such a contract. As a general rule, the court takes into account the employer`s actual costs, the duration of the worker`s notification, the conditions set out in the contract to result in the loss of the employer in order to obtain the appropriate amount of compensation. Thus, in the case of Sicpa India Limited v. Shri Manas Pratim Deb8, the applicant had incurred expenses of INR 67,595 for the placement of training for the defendant for which a employment loan had been executed, following which the defendant had agreed to serve the complainant company for a period of three years or to make a payment of 200,000 INR.
The employee left the job in two years. To enforce the agreement, the employer went to court, which awarded INR 22,532 as compensation for breach of contract by the worker. It is important to note that, although the loan provides for a payment of 200,000 INR as a severance payment, the judge took into account the total cost of the employer and the length of service of the worker in deciding the amount of compensation. Given that the defendant had already completed two years of service under the agreed three-year period, the judge divided the total expenses of 67,595 INR incurred by the applicant for a three-year period into three equal parts and awarded an amount of 22,532 INR as appropriate compensation for the employment extract one year before the agreed deadline.