How Can We Draft an Agreement to Recover Training Costs from Departing Employees?

Hello Esteemed Members,

Our company is a fertile training ground for trainee Software Engineers on new technologies, and we invest significantly in training and skill upgrades. On the flip side, these employees often leave for larger companies, suddenly putting us in a difficult position. We need help drafting an agreement that specifies employees who leave after training will be required to reimburse the salary and bonus they received during the first year of training.

Need urgent help!!

If the training provided by the employer to a new recruit involves the investment of time and money, asking for the execution of an employment bond mandating a minimum period of service after completion of the training is reasonable. This is especially true if failure to comply requires reimbursement of the actual cost of training by the employee, as it aligns with the provisions of Section 74 of the Indian Contract Act, 1872.

However, care must be taken by the employer to fix the amount of the liquidated damages and the duration of the compulsory period of service reasonably and commensurate with the length of the training period and its actual cost incurred. The bond should be executed on a stamp paper of appropriate value.