Confused About Third-Party Contracts vs. Bonds? How They Impact Your Job Security and Legal Obligations

annu thapa
Please tell me what the difference is between a third-party contract and a bond, and which of them legally binds an employee to the employer. Can an employer sue its employee if he or she breaks the bond or third-party contract? I am a finance background fresher, and in most companies, there is either a third-party contract or a bond procedure for one or more years. However, due to the fear of penalty, I am hesitant to sign both, and because of this reason, I am not able to secure a proper finance background job.
nvraovskp
Agreement with Surety

In any service agreement with an employee, generally, the company may ask such an employee to get the signature of a surety. This surety will assure the management that if the terms of the agreement are breached by the employee during the period of the agreement, the surety is liable to pay damages to the management on behalf of the employee. In the case of a breach of the agreement's terms by the employee during its operational period, this surety is also liable to face legal consequences on par with the employee for whom they have stood as a surety. As such, nowadays, no person would like to stand as a surety for anyone, except the father, brother, or close relatives of the employee who opts to join duty by executing an agreement with management.

Agreement without Surety

If management does not ask the employee, particularly one working in the finance department, to obtain a surety from another person to execute an agreement, they may ask the candidates to deposit some amount/documents related to fixed assets towards security. Alternatively, they may ask the employee to provide property details. This may be useful for an employer to recover the amount in case an employee executes an agreement and subsequently breaches it for one reason or another, causing financial loss to the company.

Regards
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