Facing a 2-Year Service Bond: Should My Daughter Join the Software Company?

My daughter was selected as a developer by a software company in campus selection. The call letter has not been received yet. They may ask for a service bond for 2 years.

My daughter is in a dilemma about whether to join or not. She has not received any other offers from different companies so far. Valuable guidance is solicited.

This is more of a personal decision than anything else. However, here are a few aspects that may help you arrive at a well-informed decision.

1. Please conduct due diligence about the company. Is it stable and well-established?

2. It would be best to speak to some employees from whom you can get first-hand information about the general work environment and culture, and whether they receive salaries on time. This is an indication of the company's stability.

3. Usually, only bonds associated with any sort of formal and real training are legal. Any other types of bonds are illegal, though many companies just get them signed to create a sense of 'mental bonding' from the employee's end. It's known that not many employees who sign up have the time, money, and scope to go legal given the timeframes associated with our legal system. Therefore, companies take advantage of this aspect.

Benefits of Staying with a Single Company

Looking at it from another angle, it's always good for a fresher to stay with a single company for at least 2-3 years for two reasons:

1. It takes at least a year or so for anyone to begin to get productive after they have learned the tricks of the trade, so to say. Effectively, the employee has just 1 year of usable experience from the company's perspective if they leave after 2 years.

2. The general perception is that an employee who leaves earlier than around 2 years (except in unforeseen circumstances like company closure, etc.) is seen as indecisive, uncommitted, or having a 'jumping-jack' nature. This perception is obviously not good for anyone in the long-term perspective.

Hope this helps.

Regards,
TS

Further to my query of the 20th inst, I may add that my daughter has received the offer letter from the employer company. She is selected as a developer. I am not clear as to the nature of her duties. Is it development of business and marketing? The software company offers support to mobile companies like Aircel. Can anybody clarify? Moreover, there is a probationary period of 6 months when the salary is Rs. 15,000, which will be increased to Rs. 20,000 after probation. Is the salary on the lower side?

Regarding the 2-Year Bond

The bond amount is Rs. 1 lakh. Some conditions of the contract are given below:

Quote

CONTRACT OF EMPLOYMENT

When you sign this offer letter document, it is assumed that you commit to stay with the Company for a minimum period of 2 years, unless your services are terminated by the company. In case you wish to disassociate yourself from the Company before completing your two years, then you commit that you will pay a minimum amount of Rs. 100,000 (Hundred Thousand Rupees) in lieu of early disassociation with the company. In case you do not pay this amount and decide to leave, then in such a case, the company shall not issue you a Service Certificate, Relieving letter, and other such documents, and at the same time, all your existing dues with the company, if any, shall not be cleared by the company. You are always required to give a minimum of twelve weeks' written notice to the company for your termination of employment with the company.

Termination

The Company may terminate your employment with the Company by giving you two weeks' written notice of termination if you are still in the probationary period or twelve weeks' written notice of termination in case of permanent employment, or salary in lieu thereof.

In case you wish to disassociate with the Company, then you are required to give a minimum of twelve weeks' written notice to the company for your termination of employment with the company. However, this (twelve weeks' notice period for disassociation with the company) will only be applicable in case you have successfully completed your two years of employment with the company.

The Company will not be liable to pay the notice pay if you resign from its services and request that you be relieved with immediate effect. Your resignation will become effective and final notwithstanding the fact that the communication of acceptance does not reach you. However, in case any disciplinary proceedings are either contemplated or pending against you, the Company will have the right not to accept your resignation.

The Company reserves the right to terminate your employment without notice, or pay in lieu of notice where you are found to have committed an act of gross misconduct.

Your employment with the Company will terminate automatically without any further notice at the Company's normal retirement age, which is on the day of your 60th birthday.

On termination of your employment, you will immediately deliver to the Company all equipment, software, original and copies of documentation (including documentation stored in electronic format), and any other property belonging to the Company, which is in your possession or under your control.

In the event, if you are absent from work for 24 hours or more, then you are forthwith required to notify the company about your absence along with reasons for the absence from work. However, if you are absent from work for a period of five (5) consecutive working days without providing any notice or affording any reasons or without taking the company's prior approval in this regard, the company shall be entitled to forthwith terminate your employment without providing any notice or incurring any obligation or liability to pay any amount or dues to you. Further, in the event of such termination, you shall be liable to pay the company an amount equivalent to your two (2) months' current gross salary. This shall not restrict the company from claiming legal remedies available to it under ordinary legal recourse. The company shall be entitled to recover any additional damages from you in a manner that the company may determine suitable in this regard.

Unquote

Kindly provide your valuable opinion on the above aspects.

Thanks in advance.

Regards

You have not mentioned whether this bond includes any provision for training. If so, the bond amount will depend on the quality of the training and the corresponding management expenditure. Please provide details on this matter so that we can assess the situation more effectively.

Regards

Our fellow member Taj Satheesh has provided you with an understanding of your initial query, which is certainly concise. Regarding the salary, what they have mentioned is quite good, considering the fact that many college graduates are still looking for jobs since 2011. If the employer is insisting on a 2-year bond, that should not be an issue, as your daughter will be earning while learning in her initial period.

Enhancing Skills During Initial Employment

The initial 2 years will help your daughter enhance her platform skills, provided the company's track record is sound. As Taj has recommended, you can connect with a few employees in the same organization through LinkedIn to gain a clearer understanding of the situation. However, if you can share the company's name via a private message, I will try to check the track record, if possible.

Regards

As there is no mention of any sort of training, they cannot legally force your daughter to work for them for 2 years. However, she has to give 3 months (12 weeks) notice to the company before parting ways with them. As suggested by Mr. Tajsateesh, it is advisable for her to work in a company for at least 2 years, as it is best for her career. A legal bond is not enforceable.

Thank you.
Regards.