Employment Bonds: What Challenges Should We Expect and Are There Better Alternatives?

Dear Seniors,

We are planning to implement an Employment Bond with the new employees. Could you please inform me about the hurdles or challenges that may arise during the implementation? Are there any alternative options available for the same?

Please suggest.

Regards,
Gopal Singh

Hi,

Employment bonds in India

Employment bonds, in general, are not valid in India. However, an employment bond may be enforced provided the employer has some proper justification for implementing the same. For instance, if the employer spends a considerable amount of money on training the employee in software or concepts, a contract can be entered into between the employer and the employee, where the employee agrees to work for a specific period of time. It is crucial that the employee enters into the bond voluntarily and with a full understanding of its terms and conditions. Coercion or undue influence to sign the bond is not allowed. Additionally, the terms and conditions of the bond, including the duration of employment and any penalties for breach of contract, must be reasonable and fair.

Challenges in implementing employment bonds

Regarding challenges, it can be very tough to find suitable candidates who accept your terms and conditions. If the lock-in period is unreasonable, many candidates may not accept the offer. To retain good talent, you may consider implementing a retention bonus strategy.

Hi Gopal,

Legality of Employment Bonds

Bonds are not legal or valid. Although you may ask employees to sign them, if an employee breaks the bond, you don't have any right to take this to court.

Challenges in Implementing Employment Bonds

The main challenge you would face is that it will be difficult to close the position. People usually do not agree to enter into any kind of bond.