BONDing through employment bonds??

Most companies make employees sign an employment bond when they join the company. This is mainly to prevent the employee from switching over to other jobs (thereby reducing employee turnover) and also for covering the training costs incurred.

Most bonds require the employee to pay the amount (as specified by the bond) if they leave before the period mentioned under the bond. Even if the employee is fired (with cause) by the employer, he is liable to pay the amount.

There are two major issues that arise:

• The justifiability of the bonds and
• Their enforceability

I personally feel that these bonds are justified and in fact needed under certain circumstances (huge investment on the employee). For example: the case of Chutney Computers mentioned in the forum. Here the company is only trying to recover its training costs which it had invested in the employee. On the other hand the IMFL Group requires the employee to pay the entire bond amount even if he leaves just one day before the bond expiry date. This is definitely not justified.

In India, employment bonds are not legally enforceable. We know that Indian courts emphasize on ‘freedom of mobility’. The Supreme Court of India has stated clearly that no one can be employed forcefully (against his will), just because he has signed a contract with the employer. The bonds are applicable only when the company has spent some money on enhancement and personal grooving of the employees, and not only training that will help them perform better. Further, a lot depends on the clauses of the bond agreement.

Companies should realize that these bonds are not the appropriate instruments for retaining employees and for fostering bonds. In some cases, bonds act as deterrent to the performance of employees as they feel that they have been forcefully locked-in (more of a bondage). Instead, companies should create a work environment (communitarian) that would make employees want to stay in the company. If they retain the employees with personal bonds, they would no longer have to worry about the legal bonds.