Is Implementing a 6-Month Employee Bond Legal and Advisable in India?

Due to frequent absconding cases in our organization, our management has decided to implement an employee bond for a period of 6 months (Probation phase).

Bond Details

The bond amount would be 50K. In this scenario, we will not provide any training to new employees. If an employee wishes to leave the organization during the bond period, he/she will be required to pay the agreed bond amount to the company. If the employee fails to pay the bond value to the organization, the organization may recover the bond amount from any of his/her property or from his/her heirs.

Exemptions

1. Acute illness (Employee must provide medical reports/certificates)
2. Relocation (For newly married women after marriage)
3. Any other circumstance where the employee is unable to perform his duties.

Given the above scenario, is it advisable to have a bond like this? And is it legally valid in the eyes of Indian law?

Apart from the validity, do you really think that if a person absconds, the company will be in a position to recover that much amount from an employee who didn't even stay for six months? Instead, you should consider deducting a small amount, say 5000 Rs, from the salary of the employee (termed as a loyalty bonus) which will be payable to the employee after completion of 1 year. That shall work.

Instead of working on this bond system, which would be a breach of the Bonded Labor Act, I think your company should focus on retaining people. It is not a healthy sign for any company when employees leave on a large scale without any intimation. Also, recovering the bonded amount is very unrealistic in practice, as I have had such experiences. As a good HR practice, understand the pain points of employees, counsel them, and if there are flaws in the system, correct them in line with stakeholders' consent.

Regards, Harpreet Walia

But my question is, will this bond stand legal in an absconding case during the bond period by considering the bond conditions.

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Hi!

Your corrected text is as follows:

"But my question is, will this bond stand legal in an absconding case during the bond period by considering the bond conditions."