Thursday, March 11, 2010

A Forgettable Bond

Few clauses from my last organisation XYZ’s contract:
1. The employee, after completion of the technical training, has agreed to serve XYZ (at its location in India) for a period of 24 months. The agreement would be effective from the date of start of training but the duration of 24 months would start from the date of resumption of duties on completion of training. In case the employee takes leave without pay for more than 15 days during the tenure of service agreement, the duration of the service agreement will get extended by an equal number of days taken as leave without pay.
2. It being impracticable to ascertain or estimate the actual cost, damage or injury which XYZ may sustain, should employee breach the terms and conditions of this agreement as set forth above, Employee agrees and undertakes to pay to XYZ a sum of Rupees 1, 00,000 as liquidated damages, along with interest @ 18% per annum to compensate XYZ for damages by reason of such breach. It is further clarified that the said amount is only a damage and is not in the nature of penalty.


I worked in that organisation for around 24 months and since I was leaving the organisation within the agreement period of 24 months (excluding training period), I paid the above mentioned amount as damage.
When I joined the company, different batches of new joinees had different training periods depending on their domain. Few batches had a training of 2 months; few had training of 3 months. My training went for one and half month. But our HR manager later told us that company would consider 3 months as uniform training period for all the batches.
In my opinion this was an unfair practice. Either they should have mentioned a bond period of 2 years and 3 months in the contract (in place of 24 months would start from the date of resumption of duties on completion of training) or should have considered different training period for different batches.
My project manager was a very nice person .Since I was leaving the organisation for higher studies (and not to join some other company) he had no issue with my resignation. As I had completed all assigned work on time properly before the last day, he even talked to HR manager regarding the reduction in bond amount to be paid. But unlike the other organisation, HR manager did not accept the suggestion of my project manager.

It was the recession time when I left my company. Employees were moved to bench and there was no appraisal that year. I put forward the same point to my HR manager that since there had been no increment in salary, company should waive off a part of the amount I was supposed to pay (which was being done in other similar companies). But my HR manager was very adamant and finally I ended up paying more than what I had saved.



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