Tuesday, March 9, 2010

Flaws in the employment Bond

We have seen many instances of employment bond. But I have a doubt how is the amount fixed in the bond. Is there any specific way to calculate the amount or it is fixed arbitrarily? Moreover we have seen that the bond amount is generally fixed over the entire tenure. For ex. In one of the leading steel companies of India the bond period is 3years and the amount one has to pay for violation is 2lakhs. But the interesting thing is that if one breaks the bond on day one he/she has to pay the same amount and same is the case if someone violates the bond after 2 years 11 months. This really puts a question mark on the way employment bonds are formulated in our country.

In another event one of my friends (after 3 years) went to onsite for training from the same company and he was made to sign another bond wherein he has to serve the company for another year, so as to recover the training costs. But once in the training he realised the entire training cost is bore by the other company. So definitely organisations have used or at least tried to use the employment bond in their favour.

In the Indian scenario how far the employee bond is enforceable is debatable. First of all not all the companies pursue the breach of employment contract in the court. Consider a company like Infosys where everyone has to sign a bond of 1 year while joining. But the attrition rate is so high among the trainees that it is impossible to go to court against all these individuals. So in many cases the bond is only for the namesake. Also in the majority of cases pertaining to the employee vs employer the judgement goes in favour of the employee. So strict enforceability of the bond in Indian context is highly impossible.

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