Training Bonds

Last updated on Jun 21, 2022

What are Training Bonds?

In some cases, an employer may make you sign a training bond. According to the terms of this bond, you will have to work for that company for a specified period of time. You cannot terminate the employment before the required period is over. If you do, you will have to compensate the employer as per the terms of your agreement.

Why are Training Bonds Signed?

This type of bond is usually signed when there is some training involved, the cost of which is borne by the employer. The idea behind it is that if the employer is investing their resources in training you, they should also be able to utilize your talent and reap the outcome of the training. Therefore, training bonds are usually signed to protect the interests of the employer.

For example, Bhanu Rao was offered a job at Centaur Hotels. When he accepted the offer, Bhanu was made to sign a training bond which stated that he would have to work for the company for a minimum period of 2 years, which would also include a 6-month training period, cost of which would be borne by Centaur Hotels. If he were to leave before the expiry of the training period, Bhanu would have to pay to Centaur Hotels the cost of his training. After one and a half years, Bhanu found a higher paying job and quit Centaur Hotels, with 6 months remaining on his bond. Now, Centaur Hotels has a right to recover the cost of training from him.

Amount of Training Bond

It is important to note that the amount given in a training bond should be reasonable and is usually decided depending on the facts and circumstances of each case.

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