4 ms·

"Look at the HR policies most companies have. The big shops all treat their “fresher” recruits as bonded labour. (The contracts are worded to pass the bond off

"Look at the HR policies most companies have. The big shops all treat their “fresher” recruits as bonded labour. (The contracts are worded to pass the bond off as training fees.)" Am I understanding this right. People have to pay a 'bond' to a new employer? Is this common in India? Other countries?

kranner 14y ago
Yes, this is common in India.
FlyingSnake 14y ago
Many outsourcing giants have 1 year bond. (E.g. TCS and Wipro) and if you break it you've to pay the company some amount. Also if you resign and don't want to serve the notice period, you can 'buy' your way out.
- edandersen 14y ago
  I hope the rest of the world doesn't get any ideas.
  - mseebach 14y ago
    Like having your stock options to vest over a five year period? Also, in many many fields less meritocratic than software, you typically gain privileges as you accrue seniority with little regard to experience or actual contribution.
    - edandersen 14y ago
      I meant having bonds on employment - imagine having to pay your employer when you quit because they had no idea what they were doing or flat out lied about what the job would entail? The thought is horrific.
      - mseebach 14y ago
        The fact that you don't have to take actual cash out of your pocket to do it makes it a much simpler/less disruptive thing to do, but the outcome is the same: You commit to work for the employer for a set number of years, and forfeit a sum of money if you renege on the commitment.
        edandersen 14y ago
        This assumes that you are guaranteed a promotion/autonomy/responsibility after a few years - how many contracts have promises of career advancement in them (not the "social contract")?
        gaius 14y ago
        It's actually pretty common: http://en.wikipedia.org/wiki/Seniority http://en.wikipedia.org/wiki/Seniority
        mseebach 14y ago
        > how many contracts have promises of career advancement in them It's extremely common in union contracts.
- mjwalshe 14y ago
  You can see why working in the USA and similar devloped economys with more "liberal" employment laws is so popular.
  - jace 14y ago
    It's not different here. Bonds are illegal by labour law in India. They cannot be enforced in court. They only serve as a harassment tool, and they work because most young workers don't know better.
  - batista 14y ago
    On the other hand, you can also see why working in a civilized place, like Western Europe with less liberal firing laws is also popular...
    - mjwalshe 14y ago
      ah I was using it in the technical (political) sense to mean that the balance is slightly more towards the servant than the master. More conservative employment laws would mean less employment rights for workers. Less liberal in the UK would be the fringe torys who want to get rid of all employment protection.
- yashchandra 14y ago
  I worked in Hong Kong for a major international bank and they have 3 month notice period. If you break it, you pay for the prorated time.
  - vignesh_vs_in 14y ago
    Do they provide a 3 month notice before firing someone?
    - kamaal 14y ago
      These bonds work only in one direction. Coming to giving a 3 month notice before firing some one, firstly when they ask you to leave they may not necessarily tell you that they are firing you for some socially acceptable reason like cost cutting. Instead they will give you two options, get fired for some fictional violation of company code or you can put in your resignation. The choice is obvious, the person resigns, while he is actually fired. The quarterly results project this as attrition. Having said this, the last I have heard about this bonds is that they are not valid in the court of law.
      - yashchandra 14y ago
        "last I have heard about this bonds is that they are not valid in the court of law" Probably not. But what will you when they decide to not pay your final paycheck since you did not pay for breaking the bond. Heck, in some countries like HK again, you need to get tax clearance from your employer before you leave permanently, if you do. So the question is: do you just bite the bullet or go fight with the corporate giants regardless of who could win.
  - throwaway1979 14y ago
    I've seen this in the US as well. It boggles my mind. How can someone get another job when they are in a contract like this? Not many employers will wait 3 months before you start. Can such contracts really be enforced in the US?
asto 14y ago
Employees are contractually obliged to pay the employer a certain sum of money if they quit before the contractually agreed period. Usually ranges from 1-3 years and the sum from 2,00,000 - 5,00,000 ($2000 - $9000) Although, one of my professors in college (I majored in finance) told us that the labour laws in India forbid such contractual obligations and you can get away with not paying the amount asked.
biggfoot 14y ago
Common among companies, although the extent to which it is implemented varies - typically exists for new recruits with less than a certain number of years in experience. While it seems like a rather defensive & oppressive move, the companies might offer a different justification, maybe on the following lines: 1. Largely service driven IT industry 2. Projects running into several months - planning, estimation, allocation nightmares 3. The recruited talent has to generally be trained from scratch for the skills required for these projects. This is probably the most important point - as even the article above says, there is good talent but by a large sourcing good talent is way beyond trivial. As such companies would want to protect their investments. This is not meant to be a justification for such activities of course :) The point I'm trying to make is there are multiple variables in this. As the industry matures I expect things will change for the better.
ig1 14y ago
It's not uncommon anywhere where companies have to invest a large amount in employee training. It's pretty common if you're doing a professional qualification (accountancy, etc.) with training and exam costs paid for by your employer, that if you quit before a set period you have to pay back your employer for the amount they invested in you. In countries like India companies have to pay a lot to train new inexperienced graduates and staff turnover is a huge issue far more than in western countries. Many western companies that hire graduates just write-off training expenses when a recent hire quits which they can afford to do so because it happens relatively rarely, but if it was a frequent occurrence like in India it would be economically unviable to do so.
- yummyfajitas 14y ago
  It even happens in the US. I know someone who's employer paid for her Crossfit certification, but she'd have to pay the pro-rated cost of her training if she quit before the year was up. Similarly, if you quit your job quickly, you need to give back the signing bonus.

kranner 14y ago

Yes, this is common in India.

FlyingSnake 14y ago

Many outsourcing giants have 1 year bond. (E.g. TCS and Wipro) and if you break it you've to pay the company some amount. Also if you resign and don't want to serve the notice period, you can 'buy' your way out.

edandersen 14y ago
I hope the rest of the world doesn't get any ideas.
- mseebach 14y ago
  Like having your stock options to vest over a five year period? Also, in many many fields less meritocratic than software, you typically gain privileges as you accrue seniority with little regard to experience or actual contribution.
  - edandersen 14y ago
    I meant having bonds on employment - imagine having to pay your employer when you quit because they had no idea what they were doing or flat out lied about what the job would entail? The thought is horrific.
    - mseebach 14y ago
      The fact that you don't have to take actual cash out of your pocket to do it makes it a much simpler/less disruptive thing to do, but the outcome is the same: You commit to work for the employer for a set number of years, and forfeit a sum of money if you renege on the commitment.
      - edandersen 14y ago
        This assumes that you are guaranteed a promotion/autonomy/responsibility after a few years - how many contracts have promises of career advancement in them (not the "social contract")?
        gaius 14y ago
        It's actually pretty common: http://en.wikipedia.org/wiki/Seniority http://en.wikipedia.org/wiki/Seniority
        mseebach 14y ago
        > how many contracts have promises of career advancement in them It's extremely common in union contracts.
mjwalshe 14y ago
You can see why working in the USA and similar devloped economys with more "liberal" employment laws is so popular.
- jace 14y ago
  It's not different here. Bonds are illegal by labour law in India. They cannot be enforced in court. They only serve as a harassment tool, and they work because most young workers don't know better.
- batista 14y ago
  On the other hand, you can also see why working in a civilized place, like Western Europe with less liberal firing laws is also popular...
  - mjwalshe 14y ago
    ah I was using it in the technical (political) sense to mean that the balance is slightly more towards the servant than the master. More conservative employment laws would mean less employment rights for workers. Less liberal in the UK would be the fringe torys who want to get rid of all employment protection.
yashchandra 14y ago
I worked in Hong Kong for a major international bank and they have 3 month notice period. If you break it, you pay for the prorated time.
- vignesh_vs_in 14y ago
  Do they provide a 3 month notice before firing someone?
  - kamaal 14y ago
    These bonds work only in one direction. Coming to giving a 3 month notice before firing some one, firstly when they ask you to leave they may not necessarily tell you that they are firing you for some socially acceptable reason like cost cutting. Instead they will give you two options, get fired for some fictional violation of company code or you can put in your resignation. The choice is obvious, the person resigns, while he is actually fired. The quarterly results project this as attrition. Having said this, the last I have heard about this bonds is that they are not valid in the court of law.
    - yashchandra 14y ago
      "last I have heard about this bonds is that they are not valid in the court of law" Probably not. But what will you when they decide to not pay your final paycheck since you did not pay for breaking the bond. Heck, in some countries like HK again, you need to get tax clearance from your employer before you leave permanently, if you do. So the question is: do you just bite the bullet or go fight with the corporate giants regardless of who could win.
- throwaway1979 14y ago
  I've seen this in the US as well. It boggles my mind. How can someone get another job when they are in a contract like this? Not many employers will wait 3 months before you start. Can such contracts really be enforced in the US?

asto 14y ago

Employees are contractually obliged to pay the employer a certain sum of money if they quit before the contractually agreed period. Usually ranges from 1-3 years and the sum from 2,00,000 - 5,00,000 ($2000 - $9000) Although, one of my professors in college (I majored in finance) told us that the labour laws in India forbid such contractual obligations and you can get away with not paying the amount asked.

biggfoot 14y ago

Common among companies, although the extent to which it is implemented varies - typically exists for new recruits with less than a certain number of years in experience. While it seems like a rather defensive & oppressive move, the companies might offer a different justification, maybe on the following lines: 1. Largely service driven IT industry 2. Projects running into several months - planning, estimation, allocation nightmares 3. The recruited talent has to generally be trained from scratch for the skills required for these projects. This is probably the most important point - as even the article above says, there is good talent but by a large sourcing good talent is way beyond trivial. As such companies would want to protect their investments. This is not meant to be a justification for such activities of course :) The point I'm trying to make is there are multiple variables in this. As the industry matures I expect things will change for the better.

ig1 14y ago

It's not uncommon anywhere where companies have to invest a large amount in employee training. It's pretty common if you're doing a professional qualification (accountancy, etc.) with training and exam costs paid for by your employer, that if you quit before a set period you have to pay back your employer for the amount they invested in you. In countries like India companies have to pay a lot to train new inexperienced graduates and staff turnover is a huge issue far more than in western countries. Many western companies that hire graduates just write-off training expenses when a recent hire quits which they can afford to do so because it happens relatively rarely, but if it was a frequent occurrence like in India it would be economically unviable to do so.

yummyfajitas 14y ago
It even happens in the US. I know someone who's employer paid for her Crossfit certification, but she'd have to pay the pro-rated cost of her training if she quit before the year was up. Similarly, if you quit your job quickly, you need to give back the signing bonus.