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Illegal 2 years Service Agreement by Patni

Pankaj Sharma
Greenhorn

Joined: Oct 09, 2004
Posts: 9
Hi All,

I would like to draw your attention towards employee worst exploitation and harrassment by Patni Computer Systems (India's sixth largest software exports company). Any IT Professional that is having less than 3 years of experience is required to sign a one sided (Patni) 2 year service agreement. During the tenure of this agreement, if the employee leaves the company, he is required to pay amount of Rs 1.5 to 2 lakhs (around 3500-4000 US $).The salary given to the employee ranges from Rs 1,30,000 to 1,80,000 per year (only around 2500 - 3500 US $ yearly). During the tenure of this agreement, he is harrassed at all levels. Firstly, he is thrown out of his home and is placed in Mumbai. When he enters Mumbai with lots of hopes in his mind, he is treated like a bonded labour when he arrives. He is given very low grade jobs which results in devastation of employee career, but, the company benefits very much as no one it can find to do these kind of jobs.Company earns around 72000 US $ per employee yearly but the employee is given only 1/20 th of this amount.Their HR policy is even more worse than this. You don't get any increments or appraisals during this tenure.

Company has some fortune 500 clients like GE, Motorola, Hitachi etc..
I will request these companies to terminate their all businesses with this company in the interest of Indian worker.

Aslo, I would like the help of my community to initiate legal proceedings against this company's exploitative policies

Thanks,

Fighter against exploitation of Software Professionals in India
Pankaj Sharma
Greenhorn

Joined: Oct 09, 2004
Posts: 9
Hi,

In addition to this, company requires the employee to sign a bond of Rs 2.5 lakh (around 5000 US $) if he/she wants to go outside on H-1B visa to work at client's location even if he goes only for one day !!!
Arjun Shastry
Ranch Hand

Joined: Mar 13, 2003
Posts: 1874
Bond fighter,
If employees don't complain and speak openly then your allegations don't have any value.Also $72000 figure is I think too big.As per their website info,they have 7 development center in different cities in India.
Also their management seems to be influential.I doubt any newspaper will publish your story.


MH
Pankaj Sharma
Greenhorn

Joined: Oct 09, 2004
Posts: 9
Arjun, think impossible and you will succeed. Think possible and you will fail. I know that their management is influential but they can't continue the exploitation of employees. The time has come for the software fraternity to unite and stop the exploitation of relatively unexperienced people. I don't know of any other industry other than software which goes to such an extent in exploiting employees having relatively less experience.

Arjun, you and I can make a huge difference in bettering the lives of our community.

Regarding development centers, yes, they are having 7 development centres, but 90% of their employees are based in Mumbai and around Mumbai.They recruit people all over from India to get the cheapest labour and then base all of them in Mumbai and areas around Mumbai

Thanks,

"Unity is strength"
Arjun Shastry
Ranch Hand

Joined: Mar 13, 2003
Posts: 1874
{
but they can't continue the exploitation of employees
}
First we need to make sure whether this bond etc is really illlegal in India or not.I was under impression that this type of bond was illegal.But now many companies are openly asking for new employees as job hopping has increased considerably in last few months.So I doubt about my previous thought.If those kind of bonds are legal by law then nothing can be done about this 'exploitation'.
Patni/Tata etc must be having legal staff to decide on this matter if they get screwed up in this matter.They are openly asking the people means there has to be some legal loophole through which these employers can escape.
My two Rs.

Mark Herschberg
Sheriff

Joined: Dec 04, 2000
Posts: 6037
"Patni Bond",

Welcome to JavaRanch.

Please look carefully at official naming policy at javaranch & reregister yourself with proper first & last name, with a space between them. Please adhere to official naming policy & help maintain the decorum of the forum. The naming policy can be found at http://www.javaranch.com/name.jsp

--Mark
Gregg Bolinger
GenRocket Founder
Ranch Hand

Joined: Jul 11, 2001
Posts: 15299
    
    6

Makes me glad I work in the US where we have all sorts of laws protecting employees from such horrible circumstances.


GenRocket - Experts at Building Test Data
peter wooster
Ranch Hand

Joined: Jun 13, 2004
Posts: 1033
Originally posted by Gregg Bolinger:
Makes me glad I work in the US where we have all sorts of laws protecting employees from such horrible circumstances.


If I lived there I'd start thinking that the Raj had been reinvented.

Also as a sheriff, can you let Bond, Patni Bond, keep his pseudonym?
[ October 09, 2004: Message edited by: peter wooster ]
Mark Herschberg
Sheriff

Joined: Dec 04, 2000
Posts: 6037
Originally posted by peter wooster:

Also as a sheriff, can you let Bond, Patni Bond, keep his pseudonym?


He's gotten the notice about the naming policy. We usually give people a few days to change, since not everyone checks their email/threads daily.

--Mark
Max Habibi
town drunk
( and author)
Sheriff

Joined: Jun 27, 2002
Posts: 4118
Originally posted by Gregg Bolinger:
Makes me glad I work in the US where we have all sorts of laws protecting employees from such horrible circumstances.


Most employment in the States is "At Will" employment. Basically, you can be fired at any time for any reason(so long as those reasons aren't race, gender, etc. ), and you can quit at any time for any reason.

For example, you can be fired for choosing to smoke in your spare time, or supporting one or another political party. The lesson, basically, is this: If you're not the lead dog, the view kinda sucks.


Java Regular Expressions
Mike Gershman
Ranch Hand

Joined: Mar 13, 2004
Posts: 1272
Also as a sheriff, can you let Bond, Patni Bond, keep his pseudonym?


Please read the policy:
... It is possible that you are uncomfortable about using your real name on the web. This happens. In that case, feel free to display a fictitious name. Just make it look like it could be real - like "Al Swensen", "Roberta Cheeny", "Anand Singh" or "Xiao Wu". And if you do use a fictitious name, don't announce that it's fictitious. We want to encourage use of real names as much as possible here, so please don't undermine that goal. ...


Mike Gershman
SCJP 1.4, SCWCD in process
Mike Gershman
Ranch Hand

Joined: Mar 13, 2004
Posts: 1272
In the US, you can be fired at will, but you can also quit at will. I had a Y2K consultant quit on his contract for a better offer two months before 1/1/2000 and there was nothing we could do.

Historically, scarce IT employees were retained by giving them a financial stake in the company and a psychological stake in both the organization and their coworkers. I don't think this works as well with a programmer working for a body shop halfway around the world from the actual users. Since the company got the business by low-balling the price, you can hardly blame the programmers for jumping to the highest bidder at the first opportunity.

Gregg Bolinger: Makes me glad I work in the US where we have all sorts of laws protecting employees from such horrible circumstances.


The issue is not the law as written, it's the law as enforced by one-sided government officials. We had the same problem in the US in the early days of organized labor. When I read about employers holding onto passports and diplomas, I can see the free market still has a ways to go in Asia.
[ October 10, 2004: Message edited by: Mike Gershman ]
Pankaj Sharma
Greenhorn

Joined: Oct 09, 2004
Posts: 9
Hi Mark,

As per the naming ploicy, I have updated my first name and last name. Now, i am more bold considering the support of you people.

Pankaj
Prakash Dwivedi
Ranch Hand

Joined: Sep 28, 2002
Posts: 452
Hi Pankaj,
I really appreciate your concerns regarding freshers. But can you tell me a single instance where a fresher was covicted for breaking one sided bond (either at Patni or any India S/W company).


Prakash Dwivedi (SCJP2, SCWCD, SCBCD)
"Failure is not when you fall down, Its only when you don't get up again"
Arjun Shastry
Ranch Hand

Joined: Mar 13, 2003
Posts: 1874
{
But can you tell me a single instance where a fresher was covicted for breaking one sided bond (either at Patni or any India S/W company).
}
Issue is not about conviction but the harrassment the employee suffers when he/she wants to join the new employer.I think this practice is followed by many big Indian companies.Business model is to lower the rate and work for the project.Companies hire many people once management expects some project in future.During this idle period employees 'update' themselves so that they are fully conversant with technology/process they will follow in following project.Once started working on project,management expects employee to remain in project till end as company has given them time to upgrade during idle time.If many employees migrate somewhere else,companies start the pratice of this 'one way bond'.Pratice of holding degree certificates was very much popular during 'good days'H1B visa till year 2000.Companies used to return the certficates once employees have worked 4/6 months at clien't place.
Prakash Dwivedi
Ranch Hand

Joined: Sep 28, 2002
Posts: 452

Issue is not about conviction but the harrassment the employee suffers when he/she wants to join the new employer.


Well, i am not able to understand who is getting harrassed here? The person who has broken the bond, and is now drawing bigger salary, or the management who cannot do except say bad words about the employee.

Secondly if anybody feels that he is unhappy with the work enviorment or with the salary he is drawing he can always change the company, despite of signing those illegal one-sided bonds. Thats why i raised the point of anybody being convicted for breaking such bonds. Nobody will get convicted, according to my knowledge Indian Constitution doesn't permit one sided labour bonds.
Mike Gershman
Ranch Hand

Joined: Mar 13, 2004
Posts: 1272
Nobody will get convicted, according to my knowledge Indian Constitution doesn't permit one sided labour bonds.


I am not sure what you mean by "convicted". Can you go to jail in India for violating a proper (two sided) labor bond?
Arjun Shastry
Ranch Hand

Joined: Mar 13, 2003
Posts: 1874
Yes.I think so.
{
Well, i am not able to understand who is getting harrassed here?
}
In majority of cases,employee submits his certificates and signs a 1/3 year bond.In between if he finds better employer,he submits a resignation.Current employer does not accept his resignation and thretens him that he can not resign as he has signed a bond,If he wants to resign,he need to give some xyz amount only after which employer will give experience letter and will hand over his certificates.Isn't this harrassment?If consitution etc does not allow ,how come these employers can openly threat the employees and keep their certificates?This is the main problem.
Jeroen Wenting
Ranch Hand

Joined: Oct 12, 2000
Posts: 5093
what the law allows and what people can get away with putting in contracts all depends on how well the other party in that contract knows the law.

A lot of companies in the Netherlands used to put far reaching clauses in contracts (and some still do) that were impossible to enforce before a court of law simply to scare employees away from leaving for a competitor.
This went as far as some (even large) IT companies having new employees sign contracts which banned them from working anywhere in IT for up to a decade after leaving the company (more usual was stating a term of 5 years ban from working for "any company in the same line of business" which to a court would mean direct competitors and customers but could be explained to mean any IT firm).
A few years ago such clauses were banned after several high profile cases (in other words a few people let it come to court and brought in the press when they won) and the practice is now less common but it still happens.

What you need to do is get this situation (with proof) to a lawyer in India who knows Indian labour law. He will be able to tell you whether the situation is illegal or not and if it is what action can be taken.


42
Arjun Shastry
Ranch Hand

Joined: Mar 13, 2003
Posts: 1874
Bond fighter,you are in Mumbai.
You may contact here for further advice.
Mike Gershman
Ranch Hand

Joined: Mar 13, 2004
Posts: 1272
If he wants to resign,he need to give some xyz amount only after which employer will give experience letter and will hand over his certificates.

Can't you just ask your schools for another copy of your certificates? In the US, you can't get duplicate diplomas but you can get certificates and official transcripts that say the same thing.

As for experience letters, you should have pay stubs and year-end tax witholding statements. Can't the hiring firm simply interview for information that can only be acquired on the job? When I was last hired, I was given a written test that consisted of trivia questions about advanced systems software support that are not covered in college courses or vendor documentation (example: in a memory dump or trace, which CPU register usually indicates the last file that was accessed?). If the applicant is a quick study who gained three years' experience in one year, that's even better.

For every company that refuses to hire you without a letter from your last employer, there should be another one whose management loves taking good people from their enemies. Just do a little research on which companies are bitter rivals.

Once started working on project,management expects employee to remain in project till end as company has given them time to upgrade during idle time.

Well, i am not able to understand who is getting harrassed here? The person who has broken the bond, and is now drawing bigger salary, or the management who cannot do except say bad words about the employee.


As for the idea that an employee is cheating a company by gaining experience and moving on, I can guarantee you that the top managers do the same thing in a minute if they are offered a better job. As for the shareholders, they are happy to see cost-cutting (read lay-offs) if it makes the company more profitable. What do you owe them besides your best efforts while you work there? Any greater loyalty has to be earned, not demanded.

I have written all this after decades in systems management but from a US perspective. Please test my comments against your friends with experience where you live!

Can you go to jail in India for violating a proper (two sided) labor bond?

Yes.I think so.


Does anyone know of a case where this happened to someone or is it just an idle threat from desperate employers?
Prakash Dwivedi
Ranch Hand

Joined: Sep 28, 2002
Posts: 452

If he wants to resign,he need to give some xyz amount only after which employer will give experience letter and will hand over his certificates.



Can't you just ask your schools for another copy of your certificates? In the US, you can't get duplicate diplomas but you can get certificates and official transcripts that say the same thing.


In India, all almost all school / colleges will isssue duplicate degree / diploma on nominal charges.



Does anyone know of a case where this happened to someone or is it just an idle threat from desperate employers?


Well, it has happened in India, but ironically in all the instances i know, the employer was Govt itself, Indian Army to be more precise. They are really very strict in following rules, and drags anybody who violates the bond, and of course their bonds are legal.
Mike Gershman
Ranch Hand

Joined: Mar 13, 2004
Posts: 1272
Well, it [jailing] has happened in India, but ironically in all the instances i know, the employer was Govt itself, Indian Army to be more precise. They are really very strict in following rules, and drags anybody who violates the bond, and of course their bonds are legal.

Same in US Army.

Thanks for the information.

I'm trying to understand our brave new world.
[ October 11, 2004: Message edited by: Mike Gershman ]
Pankaj Sharma
Greenhorn

Joined: Oct 09, 2004
Posts: 9
Prakash, let me first respond to you. Patni expectes not only "freshers" but the experienced person having experience of even more than 2 years and having the same amount of Rs 1.5-2 lakhs (4000 US $) to sign a legal agreement and this legal agreement is one sided means that company can terminate services of employee for any reason but employee can't do it. Moreover, the legal agreement is executed by employee himself and family member of employee. I was also an experienced person when I joined Patni and I was not given even a single day of training, not even induction programme that is given to employees of other companies. On the second day of my joining, I was put into the project of one premier fortune 500 company the name of which I will not like to reveal.

Bonds may be justified in Indian Army, as this relates to security of nation. But, the bonds by IT company are nothing but exploitation.

I think that the best way to fight the bonds is to inform their premier customers the so called Fortune 500 companies, which if they come to know, they may pressurize companies like Patni to stop the exploitation of employees.

One more thing, Infosys requires to sign a service agreement for 1 year from freshers, but they give a training for 3 months to freshers and what they only want is the refund of that amount if the employee leaves the company.

It is the company like "Patni" which indulges in illegal and exploitative practices.

Arjun, thanks very much for the link. I am contacing the lawyers to get my case strengthened.


Pankaj
Jeroen Wenting
Ranch Hand

Joined: Oct 12, 2000
Posts: 5093
A clause requiring employees to stay on for a set period of time (usually 1-2 years depending on the cost of that training) after receiving company-paid training is normal all over the world I'd say.
It's the only way the company can ensure they get their investment back after all.
Such clauses are normally accompanied by subclauses listing the percentages of training cost to be refunded to the company if the employee leaves anyway.

Clauses which also require the employee to pay back cost of training if he's fired I've never seen (though I've heard of them) and are likely illegal.
Balan Raj
Ranch Hand

Joined: Aug 26, 2003
Posts: 74
These big bullies of IT in India has the NASSCOM
- an association of several software companies in India - on thier side.

They ensure that NASSCOM memebers can't take employees from another member organization without a resignation letter. This means, you are stuck with any member organizatin & you will have to cough up the bond amount if you have an offer with someone else.

I know of instances in the TCS (yesteryears), where someone was asked to pay the bond amount for leaving a DAY earlier ( bcoz of misinterpretation of terms). TCS used to send the notice from the courts in Bombay to people who left the company during the bond period.
[ October 12, 2004: Message edited by: Balan Ram ]
Mike Gershman
Ranch Hand

Joined: Mar 13, 2004
Posts: 1272
I think that the best way to fight the bonds is to inform their premier customers the so called Fortune 500 companies, which if they come to know, they may pressurize companies like Patni to stop the exploitation of employees.

The Fortune 500 companies who buy products made with prison labor are not going to care about bonds, except to wish they could get away with it in the US. They only care about bad publicity, and exploited Indian programmers will not arouse much sympathy in the US media.
A clause requiring employees to stay on for a set period of time (usually 1-2 years depending on the cost of that training) after receiving company-paid training is normal all over the world I'd say.
Not in the US. Entry-level US employees stay with a company because they have a career path to better assignments and higher salaries over many years. If some people leave anyway, they leave.


I note that many Indian software companies are not members of NASSCOM. Start-up companies, for example, should be happy to hire programmers without asking permision from the previous employers.

Also, there are many small software companies in the US that are essentially cooperatives. The programmers are the owners and they keep all the money from the clients, not just a small share. I understand that, for historical reasons, Indian law favors cooperative ownership. Of course, the coop will need either a good salesman with the right to travel in the US and Europe and with good language skills, or an alliance with a US consulting company. The NASSCOM members got their clients by underbidding the competition. There is no reason they can't be beaten the same way.
Tina Desai
Ranch Hand

Joined: Mar 13, 2003
Posts: 365
Hello Pankaj,

I agree to what you say. In fact I have been thinking on this for quite some time but did not do anything about it as the thought comes to mind that myself IS NO DOUBT is the only person thinking on these lines!!

Im so happy someone atleast feels this way.

Myself being a married woman, working 12 hours a day for Saturdays also and without ANY compensation becomes very hectic. I come home and straight into kitchen for cooking. As my husband is also in s/w, we hardly spend time together.

Worst days were when my husband was onsite and I was expected to put long hours till late night and no travel arrangements were made even after giving advance notice. India is not a place where a lady can feel fine travelling alone at 2am in night.

Raising this in interviews and in appraisals, gets an answer like, 'any colleague will drop you back'.. hey Im not working for the colleague! He/She aint paying me!

I too think 'Unity is power'. I was feeling too weak being alone having such thoughts. May be we should form a body of software engineers who believe this way. There will be many of them who will work extra hours without ANY compensation, who will not mind bonds, who will learn to kiss the bosses ass and might want it that way. Slavery is at times in the mind. Still, if we unite, may be few years down the lines, we can be a group that helps s/w people in India.

Tina


Alongwith being a good coder, try to be a good professional as well!
Pankaj Sharma
Greenhorn

Joined: Oct 09, 2004
Posts: 9
The Fortune 500 companies who buy products made with prison labor are not going to care about bonds, except to wish they could get away with it in the US. They only care about bad publicity, and exploited Indian programmers will not arouse much sympathy in the US media.


Well, Mike we are living in globalized world and whatever happens to IT workers anywhere in the world affects US workers also. See the whole debate on outsourcing and it is more when Indian IT companies are acquiring US firms to expand their businesses. As Patni acquired Cymbal Corporation for $68 million. So, it boils down to that it will affect US workers also.

Friends, I am not against outsourcing but I am against outsourcing to companies like Patni which exploit the IT workers and results in loss of both US and Indian IT professionals and results only in benefits to CEOs of outsourced and outsourcing companies.

Dheeraj
Prakash Dwivedi
Ranch Hand

Joined: Sep 28, 2002
Posts: 452

Friends, I am not against outsourcing but I am against outsourcing to companies like Patni which exploit the IT workers and results in loss of both US and Indian IT professionals and results only in benefits to CEOs of outsourced and outsourcing companies.


Don't mind Pankaj / Dheeraj (whatever your name is), but this sounds like joke to me. When the US companies don't bother about US IT workers loosing their jobs due to outsourcing, how can you expect that they will think about you.
Jeroen Wenting
Ranch Hand

Joined: Oct 12, 2000
Posts: 5093
Originally posted by Prakash Dwivedi:


Don't mind Pankaj / Dheeraj (whatever your name is), but this sounds like joke to me. When the US companies don't bother about US IT workers loosing their jobs due to outsourcing, how can you expect that they will think about you.


because he's selfish and thinks that his working conditions are more important than someone on the other side of the world having a job at all.
Homer Phillips
Ranch Hand

Joined: May 26, 2004
Posts: 311
They ensure that NASSCOM memebers can't take employees from another member organization without a resignation letter.


So NASSCOM is really a union. Can Indians form a union?
Prakash Dwivedi
Ranch Hand

Joined: Sep 28, 2002
Posts: 452
Can Indians form a union?


No, we are still living in stone age.
HKM2004
Greenhorn

Joined: Sep 28, 2004
Posts: 4
Hi Pankaj Sharma ,

You told patni bond is illegal as per india law. I have few questions:
1. Have you reviewed it from any indian lawer?

Also even if any body break bond and company might not take any action. But it is true that company wont give any experience certificate and PF.

2. this is will surely effect while getting US H1 visa, because that person wont have experience certificate to show, am I right?
Mike Gershman
Ranch Hand

Joined: Mar 13, 2004
Posts: 1272
Can Indians form a union?
No, we are still living in stone age.


I suggest you look at the history of the American labor movement. The workers weren't given the right to organize unions - they took it by force.

Since India invented the non-violent protest, perhaps Indian IT workers can win the same rights without violence.
[ October 14, 2004: Message edited by: Mike Gershman ]
Arjun Shastry
Ranch Hand

Joined: Mar 13, 2003
Posts: 1874
I don't think any problem with forming a union.But who will take a leadership? .Trade Unions etc were quite influential but those were related with political parties.In last few years after globalization,all unions have now very less voice.Railway,Bank employees etc have unions though.
Prakash Dwivedi
Ranch Hand

Joined: Sep 28, 2002
Posts: 452

Since India invented the non-violent protest, perhaps Indian IT workers can win the same rights without violence.


Well the question asked was "Can Indians form a union?" and not "Does Indians form a union?".
Arjun Shastry
Ranch Hand

Joined: Mar 13, 2003
Posts: 1874
Basic criteria for forming a union is people should understand that justice is not being done in the frame of law.How many people(software professionals/programmers)in India feel that?We see even in this forum that people who are having 10/15 years experience in Finance/Accounting sign an agreement with companies.Even if law is made,attraction of going abroad and earning money(which is not wrong anyway)will not fade away.and people will sign these kind of agreements/bonds.
So until people feel that they are not cheated by employers,nothing can be done.
During H1-B days,many people went on salary as low as $36-40K despite knowing that it is not the market rate.
[ October 15, 2004: Message edited by: Arjun Shastry ]
Pankaj Sharma
Greenhorn

Joined: Oct 09, 2004
Posts: 9
Even if law is made,attraction of going abroad and earning money(which is not wrong anyway)will not fade away.and people will sign these kind of agreements/bonds.


I am not against signing of these agreements/bonds if they are logical and justifies their purpose. But, if these agreements are used to harass and dodge the fresh minds, then they become exploitative. Agreement should be fully transparent and justified. Only then, it meets its purpose and adds to business.
Mike Gershman
Ranch Hand

Joined: Mar 13, 2004
Posts: 1272
A contract between a worker and an employer obligating both parties to a fixed term of employment is perfectly fair. Most top executives demand one.

A contract that the worker cannot leave but the employer can fire him at will is completely unfair. If the employer is unsure whether an entry-level programmer will work out, the employer can agree in advance to a early-termination bonus allowing the programmer time to get another job.

In most countries based on English common law, a completely one-sided contract is not enforcable in court.

What has been described here is an agreement among employers not to hire each others' programmers without permission from the old employer. Others have added that this may be illegal in India but the government is not acting.

Finally, the latest comments are that unions are legal in India.
I think it is time for Indian programmers to consider a professional association to look out for their interests. This could serve to pressure the government to enforce the law. It could evolve into a formal union or into a cooperative to pass more of the money directly to the people doing the work.

Of course, this idea requires programmers with the right people skills (always a challenge) and the time to make it work.

Programming in India for Western companies has become a commodity business (buy low - sell high). It's up to the programmers to stop being a commodity.
 
 
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