Understanding Employment Bonds, Legal Implications, and Training Costs Recovery in Organizations

Hi Friends,

Employers, especially middle-level organizations, get contracts or bonds signed from the new joiners (freshers) for 2 or 3 years. Is this bond or contract legal?

Regards,
Suresh

Hi,

Even I am interested in knowing so. I have recently received an offer, but they are asking me to sign a bond, and I do not want to do so. Though the offer seems good, I feel that if I sign the bond, my growth would be stagnated. Does this really happen?

Hi all,

It is a bond, because there is no point for the company if it is just a clause or a say. I think if the incumbent does not serve the bond period, he is sent a legal notice or needs to pay for the unserved period. This is what I have seen in many companies, and even we do it. Sometimes, it could be at the management's discretion to relieve the person, provided the issue is really serious and genuine.

Regards,
Srilatha

Hi all,

Please go ahead and sign the bond. No issues. The company can just recover the training cost, etc. :) Nothing else as per law.

Regards,
Lakshminarayanan

Friends,

If an employee breaks the bond, can the employer file a case against that employee? Is this valid under the law? If valid, may I know under which law?

Regards,
Suresh

Hi All,

A bond does not hold any water as per law, and it is illegal too, as per the Bonded Labour Abolition Act. On the other hand, a contract and its terms are mutually agreed upon by the parties. In a contract, a clause must be included for the termination of the contract by either party. Only the training expenses can be recovered by the employee if an agreement has been signed to that effect. The word "bond" will only invite problems.

Rgds,
Deepak 🤯

It is a dicey situation. Legally, as rightly said by our colleagues, only training costs can be recovered. But what actually happens.

Most companies put trainees on the job after some initial induction. Very few actually have structured training programs. So the companies that put trainees on the job can only recover the initial costs of induction. However, when they go to court, they claim that the individual was attached to a specific person, no work was being taken from him, and that person used to spend at least one hour every day training the trainee. This way, they add up the costs, which include the stipend as well.

Companies have a lot of resources to fight their case, whereas individuals lack resources. Ultimately, courts rule that costs have to be paid back in installments.

So the final result generally is if a company decides to go to court, the individual is forced to pay back the money as per the terms of the bond but in installments.

KKT

I agree with what Krishan says; it's ultimately the company which is going to have the upper hand if the terms and policies are not followed as disclosed.

Regards, Srilatha

Good one.

I have also signed a bond for 18 months when I went abroad for one month. I served almost 14 months but did not resign. I was absent for 15 days without providing written information. They sent me a letter to resume service on a specific date. When I tried to rejoin on that date, they were not prepared to have me back and demanded money for the bond or another three-year bond. I refused and returned. They continued to send advisory letters, and after two months, in the last letter, they declared my service abandoned and asked for settlement from accounts. I have not resigned yet. Now, they have created a fraudulent resignation letter claiming the bond amount needs to be returned through an Advocate notice.

Even after the fraudulent resignation letter, I have received advisory letters from the company dated after that.

What can they legally do? Is it valid?

I was working in one of the IT companies, Newway IT company, as a software developer. They forced me to sign a service bond for 2 years. After 3-4 months, because of unhealthy working conditions, they have not given me a copy of the bond. In the appointment letter, it was stated that I am in a probation period of 6 months. Now, they are sending a legal notice and harassing me since I have broken the bond; I am supposed to pay them Rs 2,00,000. They have not provided me with any training since I was experienced. Also, I have submitted my resignation and completed the handover. After leaving that company, I have not joined any other company. I am still unemployed.

Do they really have the right to go to court? There was no overseas training, only induction for a few hours that was not related to my work profile. I have also sent a resignation email and completed the handover.