Hyderabad techie challenges IT firm’s Rs 5 L exit bond rule in HC

Hyderabad: A Hyderabad-based software engineer has approached the Telangana High Court, challenging what he termed as coercive and illegal exit bond practices followed by an IT company, prompting sharp observations from the court on the treatment of software employees.

Justice Nagesh Bheemapaka, while hearing a petition filed by Potnuru Rajesh, a software engineer from Nallagandla, came down heavily on Algonox Technologies for allegedly forcing employees to sign multiple minimum service agreements and demanding Rs 5 lakh as compensation on resignation.

Petitioner alleges harassment

The petitioner alleged that the company made him sign three consecutive “minimum service surety agreements” and later harassed him by insisting on payment of Rs 5 lakh as liquidated damages if he chose to resign.

Taking serious note of the allegations, the High Court criticised the conduct of the company and expressed strong displeasure over the inaction of the Labour department. The court observed that senior officials, including the Principal Secretary of the Labour department, the Labour Commissioner, and the Ranga Reddy district Joint Commissioner, had “miserably failed” to address the grievance despite serious complaints of illegal bargaining.

Bench questions exit bond’s legality

The bench questioned the legality of demanding a fixed amount as liquidated damages without any formula or calculation linked to the employee’s tenure or alleged loss suffered by the company. It noted that such arbitrary demands appeared to be aimed at harassing employees.

Directing labour authorities to examine whether such exit bond clauses amount to an illegal bargain under labour laws, the court posed a pointed question: “Do labour laws not apply to software employees?”

Software professionals often left without basic social security: HC

The High Court also remarked on the contrast between the public image of the IT sector and the ground realities faced by employees. While modern offices, high salaries, and perks are visible, the court said software professionals are often left without even basic social security.

Highlighting the significant contribution of software professionals to the country’s economic growth, the court suggested that the Telangana government consider bringing in special legislation to protect the welfare and rights of IT employees.