Employment Bond – Employer’s perspective

The primary reason for companies asking the employees to sign an employment is that they want to recover the cost of training that is incurred in training the employee. Let us take the example of Indian IT industry. Almost all the IT giants in India recruit fresh graduates in huge numbers from Engineering Institutes. These fresh graduates have to sign an employment bond which requires them to serve the company for certain minimum number of years after joining. These young graduates have to undergo rigorous training ranging from 1 month in duration to 6 months before they absorbed in live projects. This training is imparted by industry professionals and after undergoing through this training successfully; even a graduate from non computer science background develops a competency in programming languages. Usually the employment bond signed by the IT companies has a clause which says that the employee has to serve the company for certain minimum number of years or they have to pay a certain amount incase they leave the company before completing the minimum number of years. For example, my last employer has an employment bond which says that the employee has to serve for minimum of 2 years since joining or he/she has to pay a sum of Rs 50000 in case the minimum number of years is not completed. What happens in these kinds of bonds is that the newly trained employees become competent in their domain that they are able to find new jobs in the smaller IT companies with much higher pay package. These newly trained employees breaks the employment bond i.e. neither they complete the minimum number of years nor they pay the required sum and join the small IT organisation. Such employees do not their experience certificate and the relieving letter. Another interesting aspect is that the small IT organisation does not ask for these documents. They just want the resource to work for their firm. In cases like the these, the organisation would give some phone calls to the employees or send some emails to come back and complete the final settlement process but they don’t go beyond that. They don’t indulge into legal proceedings against each and every employee as don’t want to bear the high legal cost and also they are not sure whether the court will give the verdict in their favour. Looking from this angle, the employment bond is highly ineffective as far as the employer is concerned. The employers should find different ways so that they can at least recover their cost of training.