Employment bonds

Companies invests huge amount on the training of its employees. As a result, if the employees leave the company after the training period, the company will not be able to derive any return from the investment it had earlier made on employees. So in order to protect its interest, the companies made ‘Employment Bonds’. These bonds try to compensate the company for the training expenses incurred on the employees. However, they fail to compensate the actual cost to the company on the loss of employees.

The companies provide training to the employees so that they are able to perform efficiently and bring business to the company. But when the employees leave the company shortly after the training, the same expertise is actually used to serve the competitor. It also may be the case that the employee is actually hired because of the training he has received from the previous employer. In that case the previous employer deserves to be compensated for the training cost.

However, the Employment Bond should not tie the employee to the company for unreasonably longer period of time. It should be such that the interest of the company should not be harmed. And the enforcement of the bond is to the discretion of the company. It should not be used in case the employees has genuine reasons like pursuing higher studies or has served the company reasonably well.