Bond Ultimatum

Like everything else, my opinion about employment bonds have also changed with time. Thanks to the change in my occupation. Few months back, had someone asked me about bonds in job market, I would have strongly disapproved it for the simple reason that it limits the mobility of the employee by putting financial constraints mentioned in the bond. In the first sight, it seems to be pro-employer tactic but now as I am pursuing my business studies, I can see the issue from the employer’s point of view too.
Bonds, as Mukul Sachdeva put it rightly, are the tools used by the organizations to safeguard themselves against the investments made in employees and also to discourage them to switch between the companies too often. Today companies spend too much on trainings and skill enhancing courses of the employees; it is true that most of them are mainly to improve the employees’ performance and not much of personal value addition to them. The advantages of these trainings and skills in employee’s career do not exactly outweigh the economic hardship faced by the employee on serving the bond while leaving the organization. This argument clearly means that it’s the employee who suffers more but there’s more to this.
In today’s competitive age, everyone is demanding more hikes, more perks in their jobs and ironically the same has become difficult for many companies to provide, thanks to the recession and economic slowdown. This only encourages employees to switch jobs more frequently which is not very good for the companies. Consider an employee who is working on a crucial project and suddenly he decides to quit. The costs incurred in getting a substitute and training her can significantly increase the opex of the company.
A quick look at the legalities of the matter - The Supreme Court of India has clearly stated that no employee can be forcefully employed against his will, just because he has signed a contract with the employer. Also, as per the Indian Contract Act contracts entered between two parties if is one sided then such contract would be null and void. Most of the Bonds are one sided. So, it tells quite a bit about the law regarding the employment bonds.
One more noteworthy point here is that there are some big MNC’s which do not have any contractual bonds for example I worked in Nokia Siemens Networks which did not have anything like that. There was just a notice period of 2 months from both the sides which had to be honoured failing which some amount had to be paid which was generally the salary of 2 months.
Bonds CAN be used by the employer to get undue advantages but the stakes are higher for the employer as there can be significant dependencies and the costs incurred in case an employee switches in the middle of some prior engagement with the employer. All said and done, I agree that the repercussions of these bonds are harsh for the employee to withstand and probably it is not fair on the employer’s part to limit the employee’s ‘freedom’ of choice; but to this I can only say – Who said Life was meant to be Fair?