Is Signing a Work Bond Really Worth It for Employees? Let's Discuss the Pros and Cons

From an employee's point of view, is it beneficial to sign a bond with a company to work for a certain period of time? Does it actually benefit the employee?

It depends on learning outside of the job assigned. Otherwise, it's just mere tenure.

What is an employment bond?

An Employment Bond is an agreement between an employer and an employee encompassing several employment terms. One of these terms is that in consideration of imparting training to the employee and the financial outlay on providing said training, the employee is required to remain in the service of the employer for a specific period. If the employee breaches this term of the Employment Bond, they shall become liable to indemnify the employer for the training costs incurred.

From the employee's perspective, when they accept specific training at the company's expense, they must review the terms and conditions post-training. After all, no company would provide training and then let go of the employee without recovering the training costs through their enhanced skills.

The employee will now have job security for the bond's duration and gain valuable experience that can be utilized after the bond period. Some questions an employee should consider asking are:

- How long is the bond period?
- If the bond conditions are unfavorable, it is advisable not to sign and later face the consequences.
- Are there any implications for transfers or movements during the bond period?
- What are the penalties outlined for breaking the bond?
- Keep in mind that breaking the bond could lead to issues with final settlement (F&F) and acquiring proper relieving certificates.

It is essential to ascertain whether the company is genuinely providing training or if it is merely presented as part of regular work duties. Some forethought before signing the bond can prevent potential difficulties in the future.

It is an individual choice to sign a bond or not. The inputs given by Mr. Nathrao will be of great help to you in making that choice. Apart from it, check the background of the employer in honoring bond commitments. It was often complained by many that they were not given any special training but only on-the-job training.

Factors to Consider When Signing a Bond

Two other factors you need to look for are: 1) whether the terms of the bond are very restrictive, like posting anywhere in India after training, etc., and 2) whether the quantum of liquidated damages cited in the bond (penalty) is too high and prohibitive for the kind of training they impart to you.

Regards, B. Saikumar HR & Labour Relations Advisor Navi Mumbai