Are Employment Bonds Legal? Seeking Advice on Binding Senior Employees to Contracts

Hi Friends, I am in need of a service contract bond for senior position employees, basically binding them to work with us for a certain minimum number of years. Please share if anyone has the same.

Legality of Employment Bonds

Also, I want to know about whether agreements and bonds are allowed in employment as per the rules and regulations of labor laws, Central Government, State Government, or by Supreme Court or High Court orders in the current scenario.

Regards,
Nanjappa
Manager HR

Legality of Employment Bonds and Agreements

Such bonds or agreements compelling an employee to remain in service for a certain period and restricting them from joining a competitor are legally invalid. You cannot enforce them even if you have a bond on stamp paper. However, if the employee is given specific training and the cost of training is met by the employer, to that extent the employer can make the employee liable to compensate. If the employee has paid back the amount spent by the employer on their training, they should be relieved from service.

Training Agreements

Therefore, when you send an employee for training, you can make an agreement that they should remain with the employer for a certain period, and if they fail to do so (or wish to leave), they should pay the cost incurred on training with or without interest. Please remember that general training shall not be treated as training given to a particular employee.