Hi,
I need to draft an employee bond/contract comprising of the following points:
1. The employee needs to serve 3 years and can't leave the organization unless in unavoidable situations.
2. Also, it should mention an amount, say 5 lakh rupees, to be paid by the employee on breach of contract.
Kindly share if any such contract has been generated previously. I will make my own changes to it.
Thanks & Best Regards,
From India, Mumbai
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1I need to draft an employee bond/contract comprising of the following points:
1. The employee needs to serve 3 years and can't leave the organization unless in unavoidable situations.
2. Also, it should mention an amount, say 5 lakh rupees, to be paid by the employee on breach of contract.
Kindly share if any such contract has been generated previously. I will make my own changes to it.
Thanks & Best Regards,
From India, Mumbai
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Dear HR_Rati,
Serve three years, and if you fail to do that, pay half a million! My personal opinion is that the conditions of employment are too harsh. In that case, why not go further and say serve five years or pay a million?
More than drafting the employment letter with this sledgehammer condition, what you need is feedback on the condition itself. The underlying rationale is well discernible. You want people to work long in your company. This kind of contract condition is nothing but a forced stay in the company. Therefore, you need to investigate why people are not sticking to your company. A lock-in period for employment is fine, but what about employees' motivation? Do you think they will stay well-motivated despite this condition?
Lastly, when you reveal this kind of condition to prospective job candidates, will they accept employment, or will it scare them away? In the case of the latter, how will your organization's purpose be served?
I have given my critical comments since I conduct training programs on Contract Management. During my training, I handle disputes arising out of faulty contracts. I foresee your contract to be faulty. Hence the above comments.
Thanks,
Dinesh Divekar
From India, Bangalore
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Serve three years, and if you fail to do that, pay half a million! My personal opinion is that the conditions of employment are too harsh. In that case, why not go further and say serve five years or pay a million?
More than drafting the employment letter with this sledgehammer condition, what you need is feedback on the condition itself. The underlying rationale is well discernible. You want people to work long in your company. This kind of contract condition is nothing but a forced stay in the company. Therefore, you need to investigate why people are not sticking to your company. A lock-in period for employment is fine, but what about employees' motivation? Do you think they will stay well-motivated despite this condition?
Lastly, when you reveal this kind of condition to prospective job candidates, will they accept employment, or will it scare them away? In the case of the latter, how will your organization's purpose be served?
I have given my critical comments since I conduct training programs on Contract Management. During my training, I handle disputes arising out of faulty contracts. I foresee your contract to be faulty. Hence the above comments.
Thanks,
Dinesh Divekar
From India, Bangalore
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Dear Dinesh,
I understand that such contracts are not general; the reason we want to imply such conditions is particularly for a few positions in our company. The said positions involve the exchange of core business secrets and information that we want to secure. This is the first time we are implementing such a contract/bond system in the company. So, that is the reason I wanted clarity on it. I do appreciate your reply and suggestions. Thank you.
Regards,
From India, Mumbai
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I understand that such contracts are not general; the reason we want to imply such conditions is particularly for a few positions in our company. The said positions involve the exchange of core business secrets and information that we want to secure. This is the first time we are implementing such a contract/bond system in the company. So, that is the reason I wanted clarity on it. I do appreciate your reply and suggestions. Thank you.
Regards,
From India, Mumbai
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Hi Rati, Better that bond i think an agreement would fetch your requirement. I am attaching the same for your kind reference. Please go through the same. Thanks, Meera Sagan
From India, Thiruvananthapuram
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From India, Thiruvananthapuram
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Dear Rati,
Your second post contradicts the first one. From your first post, one gets an impression that your major concern is the retention of the employees. In contrast, in the second post, you have written that "The said positions involve the exchange of core business secrets and information which we want to secure."
You wanted to impose an employment bond with a penalty clause to protect "core business secrets." However, business secrets can be leaked even while in employment. Suppose an employee wanted to leave before three years by paying three lakhs and had leaked business secrets. Will 3 lakh work as sufficient collateral for the damage caused by the leakage?
If data security or information security is your primary concern, then you need to make an exclusive contract with the employee on information security. Employment bonds will not serve the purpose. For these kinds of contracts, it is better to hire a lawyer who handles cases under the Indian Contract Act, 1872. Drafts provided by members of the HR forum will not suffice for your purpose.
Thanks,
Dinesh Divekar
From India, Bangalore
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Your second post contradicts the first one. From your first post, one gets an impression that your major concern is the retention of the employees. In contrast, in the second post, you have written that "The said positions involve the exchange of core business secrets and information which we want to secure."
You wanted to impose an employment bond with a penalty clause to protect "core business secrets." However, business secrets can be leaked even while in employment. Suppose an employee wanted to leave before three years by paying three lakhs and had leaked business secrets. Will 3 lakh work as sufficient collateral for the damage caused by the leakage?
If data security or information security is your primary concern, then you need to make an exclusive contract with the employee on information security. Employment bonds will not serve the purpose. For these kinds of contracts, it is better to hire a lawyer who handles cases under the Indian Contract Act, 1872. Drafts provided by members of the HR forum will not suffice for your purpose.
Thanks,
Dinesh Divekar
From India, Bangalore
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Dear Hr_Rati,
Greetings .....
Employment Bonds are nothing but an agreement between two parties governed by Indian Contract Act. Such bonds are applicable only if the company has spent money on the personal grooming and enhancement of the employees with Educational and Field Studies. Training for performing better alone won’t hold good..
It is emphasized that the Indian Contract Act specified that contracts entered between parties are not to be one sided else it would be considered null and void. Most of the Employment Bonds are one sided and don’t suffice in a Court of Law.
Also, as per the Indian Contract Act no contract can be enforced on any person compelling him to work against his willingness or goes against Natural Justice. On the floor of the Court such conflicting or one sided conditions do not hold good as it would cause harm to one of the Parties of the Contract.
In India Bond is illegal in relation to employment since as per the Indian Statute, bonded labor system was long abolished and no bond can force any person to work against the employees wishes.
A bond merely as employee retention tool is bad in law.
Further, under no circumstance does the Fundamental rights under Article 19 of Indian Constitution be waived by any person nor can any person be forced to do something that amounting to the violation of the rights mentioned under Article 19 and it is a Punishable Crime..
More so, as per Sec 368 of Indian Penal Code if any person or institute holds back any document or any use any legal document or threatens any legal suits or actions and thus forces a person to perform any act against his wishes or which is illegal or wrong as per the statute of Law of the land and is punishable.
Any complain on the company would land the Directors and Managing Directors of the company in Jail or face the risk of Exemplary Damages, as the company is not an actual living entity but only a legal entity and the management are hands and heads of the company.
Thus, please refrain your Management to indulge into illegal practice that may lead to closure of Business.
Regards & Wishes,
From India, Pune
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Greetings .....
Employment Bonds are nothing but an agreement between two parties governed by Indian Contract Act. Such bonds are applicable only if the company has spent money on the personal grooming and enhancement of the employees with Educational and Field Studies. Training for performing better alone won’t hold good..
It is emphasized that the Indian Contract Act specified that contracts entered between parties are not to be one sided else it would be considered null and void. Most of the Employment Bonds are one sided and don’t suffice in a Court of Law.
Also, as per the Indian Contract Act no contract can be enforced on any person compelling him to work against his willingness or goes against Natural Justice. On the floor of the Court such conflicting or one sided conditions do not hold good as it would cause harm to one of the Parties of the Contract.
In India Bond is illegal in relation to employment since as per the Indian Statute, bonded labor system was long abolished and no bond can force any person to work against the employees wishes.
A bond merely as employee retention tool is bad in law.
Further, under no circumstance does the Fundamental rights under Article 19 of Indian Constitution be waived by any person nor can any person be forced to do something that amounting to the violation of the rights mentioned under Article 19 and it is a Punishable Crime..
More so, as per Sec 368 of Indian Penal Code if any person or institute holds back any document or any use any legal document or threatens any legal suits or actions and thus forces a person to perform any act against his wishes or which is illegal or wrong as per the statute of Law of the land and is punishable.
Any complain on the company would land the Directors and Managing Directors of the company in Jail or face the risk of Exemplary Damages, as the company is not an actual living entity but only a legal entity and the management are hands and heads of the company.
Thus, please refrain your Management to indulge into illegal practice that may lead to closure of Business.
Regards & Wishes,
From India, Pune
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Hi, True is this fact. Thank you, Mr. Soumitra Sengupta, for shedding light on the contract act.
But management generally forces HR to come up with contracts because of the time and money a company spends on not only training each employee but also on salaries, expecting that they will do their job properly. Bearing with all the mistakes they make will go to waste if employees leave the company at a crucial moment.
If not through a contract, what is another way to control attrition?
From India, Hyderabad
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But management generally forces HR to come up with contracts because of the time and money a company spends on not only training each employee but also on salaries, expecting that they will do their job properly. Bearing with all the mistakes they make will go to waste if employees leave the company at a crucial moment.
If not through a contract, what is another way to control attrition?
From India, Hyderabad
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Effective employee retention strategies-BPO. doc
Employee-retent ion-plan_1__185 .pdf