Employment Bond: A Covalent Bond between the Employer and the Employee

Ruskin Bond once said, “To be able to laugh and to be merciful are the only things that make man better than the beast”. Perhaps he took into the consideration the rate at which the world is progressing today. These days people belong to nobody and nobody belong to them. The competition has been growing exponentially and the whole world is in a sorry state of affair. Every one is seeking one’s own profit and forgetting the greater goal of serving the society.

Now why I brought this up here is simple. Consider this situation:

Had the world been a perfect picturesque, probably every person would have acknowledged the other person’s favor and would have returned it in due course of time. Incase of an employment, when an employee and employer decide to get into a professional relationship, the employer would have gone to the maximum extent to train his employee and support him in troubled times. And in return the employee would have worked relentlessly without expecting much from his employer. In such situations probably there would have been no attrition at all.

But let us admit it, such is not the case. People are greedy- greedy for money, power, position and respect. And it is due to this greed that an employee decides to abandon his employer in the midst of their relationship and join another firm which indeed promises him a better position and pay. Needless to say, that an employer in such situation feels cheated not because he lost a talent but he lost on the investment he made on that particular employee. Talking in terms of Return on Investment, the employer return on his big investment is zero. The investment includes the cost of training the employee, the cost of retaining him and all other tits and bits cost that the employer has incurred. In such situation expecting merci out of the employer is pointless. The employer has every right to demand back the money that he loses when the employee decide to put an end to their so called established relationship.

So what should the employer do in such situation or in other words how should the employer ensure that that he gets back what he has invested if not positive returns. The only way is to get it back from the employee. And how to ensure that the employee pays is simple- make him sign a bond, that guarantees that the employee has to serve the employer for a minimum of certain period or else has to pay back the entire amount as specified. Fair enough as far as the employer is concerned though the employee might feel that he is the one who is at loss.

Now let us look from the employees’ perspective. Modernity has dawned upon man and in this era of super computers, no one can afford to be slow. Every now and then the rules of the game change and it is required that the player adopt himself to such changing rules as fast as he can, lest he has to face the fury of this fast moving world. Gone are the days when frequent changing of jobs were looked down upon and the employee considered as fickle and inconsistent, today if one sticks to his job for a relatively longer period of time then his competency is questioned and his caliber is doubted. In such situations the employee is in a serious dilemma of whether to stick to his current employer and be loyal to him or to change jobs so as to prove his competence. Now that he is forced to sign a bond, he has no other option but to wait for the period until the bond expires and then only decide to change job or else pay the fine and switch to a better job offering better profile.

Here I would like to cite my personal experience as evidence that how such bonds change people’s decision and how it changed my life. In my engineering days, I was recruited by a software giant XYZ company (name hidden for confidentiality reasons). I was happy that I got through the company. I had planned out everything for my future. What I had decided is I would work for a year, get some industry exposure and then try my hand at management. But all my plans were shattered the day when I received my offer letter. It had a 2 years of bond or else I would be liable to pay the entire fine which was in lieu of the training cost. Following is an excerpt from my offer letter:

Service Agreement:

“As XYZ will be incurring considerable expenditure on your training, you will be required to execute an agreement, to serve XYZ for a minimum period of 2 years after joining, failing which, you (and your surety) will be liable to pay XYZ Rs.**,***/- towards the training expenditure.”

Overseas Deputation / International Assignment Agreement:

If you are on international assignment, you will be covered by the XYZ International Assignment policy from the date of deputation.

Accordingly, you will be required to sign the applicable Overseas Deputation / International Assignment Agreement/s. In case of every international assignment that exceeds 30 days, you will be required to serve XYZ as per the Notice Period mentioned below.

This is to ensure that the knowledge and information gained by you during your assignment is shared and available to XYZ and its associates. This transfer of knowledge and information is essential for XYZ to continue to serve its clients and customers better.

If you are deputed internationally for training, you will be required to sign an agreement to serve XYZ for a minimum period of 6 months on completion of training.

Notice Period:

If you are covered under Deputation Agreement / International Assignment

Agreement, either you or XYZ can terminate the traineeship / appointment by giving

90 calendar days written notice as set out in the Separation Policy of XYZ.

XYZ reserves the right if it is in the interest of the business and current assignment,

to ask you to complete your notice period.

Seeing this agreement, I decided not to go ahead with the decision of joining this firm instead I preponed my decision of joining a B-School and here I landed up doing my MBA. So needless to say bond does put a significant impact on people’s lives.

So ideally what should an employer do to avoid such situation in the first place. What the employer need to understand is the employee’s need. Every employee seeks to have a challenging role where he can prove his mettle. And for that the employer need to search in various avenues to help the employee find his dream profile and does not get bored with his routine life and job description. On the other hand the employee needs to be patient enough and wait for his employer to give him numerous opportunities.

I know this is a bit difficult to achieve, but if achieved nothing like it. Till then I believe this fight will exist. And it is up to the employer and the employee how they can bargain a fair share of deal. I would say this employment contract acts as a covalent bond between the two parties keeping them together. Every person involved makes a sincere effort to please the other party involved even though he might not enjoy doing so. This is today’s world and today’s corporate structure or as James Bond quotes “you may call it professional courtesy”.