Is It Fair for Employers to Reimburse Notice Period Buyout as a Bonus with a Bond?

Recently, my brother switched his job. The company had a notice period of 2 months, but with mutual discussion, the employer agreed to a buyout of the notice period. The current employer also confirmed the same (request initially raised by the current employer). Now, they are asking for a 3-month incubation time on the reimbursement of the same. Also, they want him to fill out a joining bonus form, which is more like a bond for one year. It states that:

“At my request, as a special case, it has been very kindly consented by XYZ Company to grant me a Bonus of Rs. _________________ (Rupees __________________________________________________ _ __________________________________________________ ______________). By accepting the Bonus, I am also committing myself to serve XYZ Company for a period of at least one year. I agree to refund the entire amount of Bonus of Rs._________________ (Rupees___________________________________________ _______________________________). If I, on my own volition, resign or leave the organization within the period of one year from the date of joining. I agree that the grant of Bonus is ‘a onetime grant’ and will not be construed as part of the package (CTC), and I shall have no claim on such Bonuses during the course of service with XYZ Company.”

The amount here would be equal to the amount he paid for the buyout and has been confirmed by the HR that he needs to fill this form to get reimbursement of the NP buyout amount.

My Questions Are:

1. Can a notice period buyout amount be reimbursed in the form of a bonus?

2. Is it correct to get a bond signed in return for reimbursement of the buyout amount?

3. What are the steps that can be taken in this regard?

Any suggestions would be greatly appreciated.

Regards,
Vimal

When they reimburse the notice period buyout, their condition for a minimum one-year service seems reasonable. It can be called a special bonus or joining bonus but is taxable in the hands of employees.

Regards,
Pon

But as far as I am aware, a joining bonus and notice period buyout reimbursement are two distinct terms. A joining bonus is something that companies provide as a token of appreciation, and notice period reimbursement is something that is repaid to the employee who invested their salary or savings to get relieved at the earliest from their current job after the confirmation of the new employer. Disguising a bond in the name of a bonus would not be fair, I guess.

In this special scenario, the employer forced a buyout, reducing the notice period to 1 month from the initial 2 months without a buyout by the previous employer. Other employees have not signed any bond of this nature. Do you think it is right in this case?

Joining Bonus and Notice Period Buyout

Did they promise him a joining bonus? If not, then given the fact that they are giving the same amount to him, what is your problem? Or do you think they should be giving him a joining bonus also, though it was never offered?

On the matter of one year working, I think that is fair. They are paying extra to get you in. What use is it to them if you do not work there for at least a year?

Bond and Forced Labor Concerns

1. Bond definitely amounts to forced labor (no two questions about it).

Concerns About Bonus Clauses

2. "I shall have no claim on such Bonuses during the course of service"... This point needs further inputs on the philosophy/policies of the said company. Foregoing future benefits without careful thought is not a good idea.

Regards

Bond and Notice Pay: A Discussion

1. Bond definitely amounts to forced labor (no two questions about it). LOL, this is really funny. You expect the company to pay for the notice pay that you should have been paying from your pocket and are not willing to work for a year there. Why should they pay for your notice pay if you are not willing to work for them at least for a year?

2. "I shall have no claim on such Bonuses during the course of service"... This point needs further inputs on the philosophy/policies of the said company. Foregoing future benefits without careful thought is not a good idea.

Regards

Also, I hope you realize that the term "such bonus" refers to your joining bonus. This means you will not be eligible to receive the joining bonus again during your employment. This does not refer to the normal annual bonus.

Notice Period Buyout and Employment Bonds

My education (PhD in HRM) and 14 years of rich experience in leading corporates (HCL/AMEX/Zamil, etc.), coupled with life membership of bodies like AIMA/ISQ, etc., do not allow me to make fun of anyone. I am a life member of AIMA simply to help young managerial talent to grow.

I feel you have a short attention span. Read the "case study-styled narration" once again, but this time do not be in a hurry. There are several parts:

• Notice period buyout
• New employer is willing to pay
• Content of the bond

Make notes. Check out different aspects with different experts. Learn to be holistic (it's tough, but the payoffs will be huge when it comes to negotiating anywhere). Join various industry forums, pick additional courses, and increase your knowledge both in depth and breadth.

The way you articulate yourself poses a major problem for you in the work environment. If you are working in a corporate where team sizes are large and there are specialists for every arena, your seniors would be able to see that you speak in a hurry without checking all the facts. This, coupled with a lack of knowledge, can ruin your career. If you need help, I am there.

Warm regards,
Surya

Justification for Guarantee from Employee

I think the query here is about the justification of asking for a guarantee from the employee to work for a minimum of one year in the organization. This is because the employee in question has received reimbursement for the shortfall in the notice period buyout. Arguments on irrelevant matters may be avoided.

Regards,
Pon