Bonds - From a different angle

Bonds, as has already been discussed and debated in a number of previous posts, are an essential tool for the employers to either restrict the employee from leaving the organization before a specific time or extract the amount which it had invested in the development of the employee if he/she chooses to do so.

However, I would like to look at it from a different perspective. In my opinion, in today’s world all that matters is talent and the rest follows. Consider an employee with immense talent, who is not satisfied with his current employer due to monetary/other issues and is looking for other opportunities. He is bound by a contract which prevents him from leaving his current employer or imposes a penalty otherwise. Given the talent he has got, any employer who requires resources in the concerned field would, in today’s competitive environment, be willing to pay the contract breaching amount associated with the employee because it is the talent that matters in the long run. What the employees need to be careful about is other terms and conditions which often go unnoticed until they finally come into contention demanding penalties or even leading to termination. Conditions relating to intellectual property rights fall in the above category. But as we already discussed it in detail in previous forums, so I won’t go any deeper into it. While I was working in the software division of a mutual fund company, my employment contract required that I don’t invest in IPO’s as it believed that I would be competing against the organization by doing so. Further it required me to give details of my demat account and also restricted my trading activities to a maximum of four transactions per month. Non-adherence to these conditions led to penalties and other severe actions. Further, there are policies which restrict the employees from extending the relationships with clients/other employees beyond the work that they do as their obligation towards the organization. Getting engaged into any sort of business activity is prohibited. Even giving gifts to one another might make one liable to penalties and other strict actions. Employment bonds, in strict sense, are just like the tip of an iceberg which is visible to everyone and hence can be manoeuvred with, based on one’s talent but it is the covert conditions which form the rest of the iceberg that one should have cognizance of.