I am Director with a startup IT company overseeing the HR function. We have a 2 year bond policy for all the freshers joining the company. One of our employees in the probation period(< 6 months), during a increment discussion raised salary hike concerns. During the course of the discussion, we offered a performance based hike for which he clearly stated that for the current salary, he will work time bound, will not put any additional efforts.
He clearly started demanding terms which were not acceptable and in the heat of the moment during the discussion , we gave him an option to either accept the increment or resign. He chose to resign, with a formal mail stating that the company has given this option. Under this scenario, will it be possible for us to enforce the bond policy? Do we give him a resignation letter? How do we handle the situation?
From Fiji, Suva
He clearly started demanding terms which were not acceptable and in the heat of the moment during the discussion , we gave him an option to either accept the increment or resign. He chose to resign, with a formal mail stating that the company has given this option. Under this scenario, will it be possible for us to enforce the bond policy? Do we give him a resignation letter? How do we handle the situation?
From Fiji, Suva
Firstly, please understand that bonds are illegal. Bonded labour has been abolished long back in India. Bonds are not enforceable in the given scenario. Then, when is bonds enforceable is the question. Bonds are enforceable only when the organisation has invested heavily in training the employee which warrants a time frame to transfer the skill or complete a project. For example, if your company has sent a person for a training abroad which is not easily available in India, then, the employee is duty bound to stay in the organisation and transfer the training to others. The time frame has to be reasonable enough and cannot be arbitrarily decided as two years. And the compensation has to be equivalent to the cost incurred for such training plus a reasonable penalty and not an arbitrary amount which is common to all.
Most PSU'S invest heavily in initial training. When engineers from HMT left and joined Titan without relieving orders, the Supreme Court declared the bonds of HMT as illegal, since their training did not warrant a bond.
Similarly, when NTTF tried to enforce the bond of their engineers, the employee was able to prove that the work that he put in during training period was encashed commercially by NTTF. The Supreme Court declared it as illegal. In fact they termed NTTF's attempt to encash the bond as extortion.
Many IT companies make their employees to sign bonds despite the SC judgements. Employees have not approached the court and pay up not knowing that the bond is illegal. IT companies know it's illegal and despite that sign bonds to keep it as a psychological barrier because the thought of going to court in India is fearsome. But those who have gone to court have always won or the company makes an out of court settlement.
It depends on the ethics of your organisation as to whether you want to enforce the bond. If you want to enforce the bond and the employee goes to court, you will be embarrassed in front of the current employees when the judgement comes. And those who consider it as a psychological barrier and were staying back on account of it will be emboldened to leave. If I were you, I will let go the bond to ensure the existing employees stay back without knowing that the bond is illegal and not enforceable.
From Indonesia, Jakarta
8Most PSU'S invest heavily in initial training. When engineers from HMT left and joined Titan without relieving orders, the Supreme Court declared the bonds of HMT as illegal, since their training did not warrant a bond.
Similarly, when NTTF tried to enforce the bond of their engineers, the employee was able to prove that the work that he put in during training period was encashed commercially by NTTF. The Supreme Court declared it as illegal. In fact they termed NTTF's attempt to encash the bond as extortion.
Many IT companies make their employees to sign bonds despite the SC judgements. Employees have not approached the court and pay up not knowing that the bond is illegal. IT companies know it's illegal and despite that sign bonds to keep it as a psychological barrier because the thought of going to court in India is fearsome. But those who have gone to court have always won or the company makes an out of court settlement.
It depends on the ethics of your organisation as to whether you want to enforce the bond. If you want to enforce the bond and the employee goes to court, you will be embarrassed in front of the current employees when the judgement comes. And those who consider it as a psychological barrier and were staying back on account of it will be emboldened to leave. If I were you, I will let go the bond to ensure the existing employees stay back without knowing that the bond is illegal and not enforceable.
From Indonesia, Jakarta
If you have asked him to resign then better not to ask for any recovery related to bond. As if the employee refuse to pay back and agree to rejoin then he may create problems related to IR in your organisation. Better to let him go without asking for pay back bond amount.
Employment bond is an instrument of primitive age. Please do away with the bond.
You were aware that your company has bond policy then how come you offered such an option. Now you can not make any recovery except for usual notice period.
From India, Thane
You were aware that your company has bond policy then how come you offered such an option. Now you can not make any recovery except for usual notice period.
From India, Thane
Employee has an attitudinal problem, we should relive such employee immediately as can create unnecessary negativity within the system.
Referring the details it seems he has feeling of indispensability, he is just trying to create importance by opting to resign. He should be given informal feedback that Management is ready to accept the resignation & relieve him immediately.
There are chances he may withdraw resignation as things are not moving as per his plan.
From India, Mumbai
Referring the details it seems he has feeling of indispensability, he is just trying to create importance by opting to resign. He should be given informal feedback that Management is ready to accept the resignation & relieve him immediately.
There are chances he may withdraw resignation as things are not moving as per his plan.
From India, Mumbai
Firstly, please understand that bonds are illegal. Bonded labour has been abolished long back in India. Bonds are not enforceable in the given scenario. Then, when is bonds enforceable is the question. Bonds are enforceable only when the organisation has invested heavily in training the employee which warrants a time frame to transfer the skill or complete a project. For example, if your company has sent a person for a training abroad which is not easily available in India, then, the employee is duty bound to stay in the organisation and transfer the training to others. The time frame has to be reasonable enough and cannot be arbitrarily decided as two years. And the compensation has to be equivalent to the cost incurred for such training plus a reasonable penalty and not an arbitrary amount which is common to all.
Most PSU'S invest heavily in initial training. When engineers from HMT left and joined Titan without relieving orders, the Supreme Court declared the bonds of HMT as illegal, since their training did not warrant a bond.
Similarly, when NTTF tried to enforce the bond of their engineers, the employee was able to prove that the work that he put in during training period was encashed commercially by NTTF. The Supreme Court declared it as illegal. In fact they termed NTTF's attempt to encash the bond as extortion.
Many IT companies make their employees to sign bonds despite the SC judgements. Employees have not approached the court and pay up not knowing that the bond is illegal. IT companies know it's illegal and despite that sign bonds to keep it as a psychological barrier because the thought of going to court in India is fearsome. But those who have gone to court have always won or the company makes an out of court settlement.
It depends on the ethics of your organisation as to whether you want to enforce the bond. If you want to enforce the bond and the employee goes to court, you will be embarrassed in front of the current employees when the judgement comes. And those who consider it as a psychological barrier and were staying back on account of it will be emboldened to leave. If I were you, I will let go the bond to ensure the existing employees stay back without knowing that the bond is illegal and not enforceable.
From India, Mumbai
Most PSU'S invest heavily in initial training. When engineers from HMT left and joined Titan without relieving orders, the Supreme Court declared the bonds of HMT as illegal, since their training did not warrant a bond.
Similarly, when NTTF tried to enforce the bond of their engineers, the employee was able to prove that the work that he put in during training period was encashed commercially by NTTF. The Supreme Court declared it as illegal. In fact they termed NTTF's attempt to encash the bond as extortion.
Many IT companies make their employees to sign bonds despite the SC judgements. Employees have not approached the court and pay up not knowing that the bond is illegal. IT companies know it's illegal and despite that sign bonds to keep it as a psychological barrier because the thought of going to court in India is fearsome. But those who have gone to court have always won or the company makes an out of court settlement.
It depends on the ethics of your organisation as to whether you want to enforce the bond. If you want to enforce the bond and the employee goes to court, you will be embarrassed in front of the current employees when the judgement comes. And those who consider it as a psychological barrier and were staying back on account of it will be emboldened to leave. If I were you, I will let go the bond to ensure the existing employees stay back without knowing that the bond is illegal and not enforceable.
From India, Mumbai
Find answers from people who have previously dealt with business and work issues similar to yours - Please Register and Log In to CiteHR and post your query.
BOND BY AN EMPLOYEE FOR NOT ENGAGING HIMSELF.doc