Enforceability And Validity Of Employment Bonds – A Critique

In this article, I intend to pen my thoughts on the enforceability and validity of employment bonds. The views stated in this article are purely personal.

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Adv Sherry Samuel Oommen: This article is authored by Adv Sherry Samuel Oommen. He specialises in the Constitution, tax and corporate laws and has also cleared the final exams of the Institute of Chartered Accountants of India, the Institute of Cost Accountants of India and the Institute of Company Secretaries of India. He has also completed his Masters's Degree in Commerce, apart from obtaining a Post Graduate Diploma in Business and Corporate Laws from Symbiosis, Pune. The views expressly are personal and should not be construed as a legal opinion.

i. Why is it necessary for employment bonds to be valid?

The usage of employment bonds has come become a practice that is increasingly gaining importance. An employment bond is typically entered into so as to protect the interest of the employer. It enables the employer to claim compensation for time and resources spent on training an employee, if the employee breaches the conditions stipulated therein. The conditions essentially percolate around an assurance that the employee would be in employment with the concerned employer for a defined period, which is agreed by the parties.

One must bear in mind that the main reason for an employer to include a condition of assured service for an agreed period is to prevent the employee from leaving the organization. Generally, employers insert such condition since a considerable amount is spent by them during the entire recruitment process and for training the employee. Interestingly, the employees concur to such conditions prior to the joining employment and are thereafter benefitted from the training imparted by their employers.