Tied with an employment bond

The primary reason a company requires an employee to sign an employment bond as a huge sum of money is spent on the employees training and development programs. Thus an employer would expect the employee to stay with the organization atleast long enough to justify the expenses incurred. Also, equally important is the fact that some skills are acquired over a period of time and if the employee is trained for a specific duration of time and then wishes to quit , it would be difficult for the employer to find a replacement. No company would like to let go of an employee after training him/her with the best of their resources , equip them with highly sought after on the job skills and then see them quit to move on to greener pastures. Thus, bonds are signed at the time of accepting the employment or sometimes even later,which require compensation to be paid incase an employee wishes to quit before a stipulated duration of time. However, if a company asks an employee to sign a bond as to not to terminate the employment relationship and accept alternate employment before a specific duration it could amount to an agreement in restraint of trade.

It can also be seen as a gain for both the parties- Employer pays for the training and in turn uses the employee’s services for atleast a minimum time period. If such a bond were considered illegal a company would solely have to rely on good faith and the employee’s loyalty to the company. As the carrot and stick approach goes, a combination of rewards and punishments is required to induce a desired behavior. Thus, if there is no deterrent in the form of a legal obligation, it will not be suprising to find employees maximizing their benefits and moving on. But on the other hand bonds might also act as a deterrent for prospective employees from taking up the job offer. In some companies employment bonds are a common practice as a need to stop early attrition. However, at companies like Deloitte where I worked for a few months, employment bonds are signed only when an employee is sent for an onsite assignment. As the company incurs all the expenses with respect to the travel and training such a bond is justified. No one can be forced to sign an employment bond. It is upto the employee to evaluate its merits , consider if the value addition/training is worth being bonded and then make an informed decision.