"It is informed and agreed that XYZ Solutions provides training worth Rs 50,000.00 (Rupees Fifty thousand only).
Please note:
- We are a software development firm.
- We are framing an agreement for one contract with an engineer.
- If the person leaves the job before one year, we want him liable to pay Rs 50K. Our senior engineer spends time with them, helping them understand advanced topics. We want this to be included under training.
Please suggest how we should frame the clauses. As I read here, companies need to prove that training was given."
From India, Kolkata
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Please note:
- We are a software development firm.
- We are framing an agreement for one contract with an engineer.
- If the person leaves the job before one year, we want him liable to pay Rs 50K. Our senior engineer spends time with them, helping them understand advanced topics. We want this to be included under training.
Please suggest how we should frame the clauses. As I read here, companies need to prove that training was given."
From India, Kolkata
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Certainly, a clause to refund the training costs incurred by the establishment in respect of an employee shall be incorporated in the contract of employment. However, it will be your company's duty to prove that the company has spent the amount equal to the sum demanded exclusively for the employee.
Regards,
Madhu.T.K
From India, Kannur
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4771Regards,
Madhu.T.K
From India, Kannur
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If you are paying the training fees to an outside provider for providing training to your employees, the cost of training along with incidental charges spent for training purposes can be recovered if the employee leaves the organization within a stipulated period, say one year. This should be a clause in the employment contract.
If the employee has already joined based on the contract of employment, the said clause can be incorporated in the order/advice of deputing him for the training, and acknowledgment must be obtained from him.
If a senior person guides the employee in executing the task or performing the work, it cannot be considered as training, and the cost (such as the salary of the senior) cannot be recovered unless it is done in a formal way, keeping the employee away from the workplace.
From India, Madras
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If the employee has already joined based on the contract of employment, the said clause can be incorporated in the order/advice of deputing him for the training, and acknowledgment must be obtained from him.
If a senior person guides the employee in executing the task or performing the work, it cannot be considered as training, and the cost (such as the salary of the senior) cannot be recovered unless it is done in a formal way, keeping the employee away from the workplace.
From India, Madras
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Salary of a senior engineer is 30K per month. He spends almost 50% of his time guiding and explaining the finer details, advanced concepts, and clearing their doubts, mistakes, bugs, etc. He guides them throughout the year, and there are 4-5 juniors under him.
Thank you,
Palak
From India, Kolkata
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Thank you,
Palak
From India, Kolkata
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The issue being raised is very genuine since small-sized software companies put in effort, energy, time, and money to train the freshers for their own business. Such companies are not training establishments to develop people for use by big companies. But the big fish lure these employees with higher remuneration to join them even without a relieving letter from the previous company. While big companies may not accept it as an unethical practice, organizations like NASSCOM may like to look at this issue if they are interested in the growth of small businesses and entrepreneurship.
Comments and further discussion on this issue can at least help in creating a consensus amongst the small software companies on how to legally protect their own interests. I personally find no harm in stipulating the refund of training and infrastructure costs by an employee who leaves the company without completing one year of service after finishing the training (which includes on-the-job training), as a term and condition of employment. If a fresher is not keen to join as a trainee on these terms and conditions, he/she need not sign the employment agreement.
If every small software company adheres to a common yardstick of 'one year training + one year post-training service' or refund of the full cost of training for premature separation from the company (except termination of services by the management), there can be a common ground to set up and streamline the employment process.
From India, Delhi
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Comments and further discussion on this issue can at least help in creating a consensus amongst the small software companies on how to legally protect their own interests. I personally find no harm in stipulating the refund of training and infrastructure costs by an employee who leaves the company without completing one year of service after finishing the training (which includes on-the-job training), as a term and condition of employment. If a fresher is not keen to join as a trainee on these terms and conditions, he/she need not sign the employment agreement.
If every small software company adheres to a common yardstick of 'one year training + one year post-training service' or refund of the full cost of training for premature separation from the company (except termination of services by the management), there can be a common ground to set up and streamline the employment process.
From India, Delhi
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A lot of companies have started asking to submit marksheet /degree for 1 year. That is not a legal solution and some good candidates avoid it. What steps are taken by you.
From India, Kolkata
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From India, Kolkata
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Don't you think you are going reverse way here??
The reasoning sequence should be:
1. Company spends money/efforts on training. They "know" the cost of training & can justify (say 50K).
2. They don't want the employee to leave the job unless the training cost is recovered by the gains from services provided by the employee. They know the ratio of gains against cost to define the term.
3. This term (say 1 year) is agreed between the company & employee.
While here is your reasoning sequence:
1. Company does not want the employee to leave the job sooner. (You are not sure if you can provide an environment where he would want to stay at least a year).
2. A clause is put in agreement with an inflated amount, based on the salary offered; so the employee cannot afford to leave.
3. Actually, the company does not pay much for the training itself. Generally, there is internal training of 1 or 2 weeks. Then the employee trains on the job. The senior engineer is generally a team lead, whose responsibilities include services from his juniors & he does not book separate time on "training" throughout the year.
4. Then the company is now searching for the reasons on how to justify the amount, so if they have to go legal in the future, they are covered. For this, the help of such forums is taken.
Is this the real purpose of this forum?
And is the HR department also not responsible for ethics?
How does it fit into ethics to find the reasoning on the internet for the expenses that are not actually directly done by the company?
Anyway, there are some things that you can do:
1. Estimate the initial 'formal' training cost.
2. Some companies call this period a 'probation' period, so the quality requirements need to incorporate the 'training curve' for employees for this on-job training period into your quality system (say performance index or earned value). Give a clear picture to the employee about his training curve.
3. Ask the senior engineers to record the efforts for training in the quality management documents.
4. If the 'budget' of 50K is not fulfilled, then do provide some additional training to the employee, so you would actually have a 'better trained' employee. Remember, the basic need for training is for the betterment of employee assets; & not to justify the clause in the contract.
Hope I was helpful, & pardon me for any strong words up there!
Amod.
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The reasoning sequence should be:
1. Company spends money/efforts on training. They "know" the cost of training & can justify (say 50K).
2. They don't want the employee to leave the job unless the training cost is recovered by the gains from services provided by the employee. They know the ratio of gains against cost to define the term.
3. This term (say 1 year) is agreed between the company & employee.
While here is your reasoning sequence:
1. Company does not want the employee to leave the job sooner. (You are not sure if you can provide an environment where he would want to stay at least a year).
2. A clause is put in agreement with an inflated amount, based on the salary offered; so the employee cannot afford to leave.
3. Actually, the company does not pay much for the training itself. Generally, there is internal training of 1 or 2 weeks. Then the employee trains on the job. The senior engineer is generally a team lead, whose responsibilities include services from his juniors & he does not book separate time on "training" throughout the year.
4. Then the company is now searching for the reasons on how to justify the amount, so if they have to go legal in the future, they are covered. For this, the help of such forums is taken.
Is this the real purpose of this forum?
And is the HR department also not responsible for ethics?
How does it fit into ethics to find the reasoning on the internet for the expenses that are not actually directly done by the company?
Anyway, there are some things that you can do:
1. Estimate the initial 'formal' training cost.
2. Some companies call this period a 'probation' period, so the quality requirements need to incorporate the 'training curve' for employees for this on-job training period into your quality system (say performance index or earned value). Give a clear picture to the employee about his training curve.
3. Ask the senior engineers to record the efforts for training in the quality management documents.
4. If the 'budget' of 50K is not fulfilled, then do provide some additional training to the employee, so you would actually have a 'better trained' employee. Remember, the basic need for training is for the betterment of employee assets; & not to justify the clause in the contract.
Hope I was helpful, & pardon me for any strong words up there!
Amod.
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Dear friend,
As you know, there have been numerous litigations pending in various courts over the bond during training. It's very difficult to draft a foolproof agreement of a bond that cannot be challenged in Indian courts. However, certain aspects have to be looked into very closely.
First of all, proving beyond doubt how much and in what manner the employer incurred certain costs on training the employee. Though it is no doubt could be arbitrary, complete documentation would be helpful, which should be verifiable.
Secondly, many companies follow a "Management Trainee," "Engineer Trainee," or some such designation for the initial appointment, with a provision for confirmation subject to the availability of posts, etc. This system aids the employer in showcasing that the entire period the employee has been under training and whatever CTC during the period is the "cost of training."
Thirdly, as the adage goes - "...not only should justice be done, but it should also be seen to have been done," which means there should be visible evidence that the employee is indeed under training. This could be ensured by more than one method. Like - Prepare and circulate a detailed training manual and conduct the day-to-day affairs accordingly. Earmark certain hours of the duty hours as "training hours," which should be well-documented.
Fourthly, there should be an exclusive Trainer Officer whose time should be substantially spent with the "Trainee."
Fifthly, a periodical progress report should be prepared about the Trainees' progress together with the progressive amount spent (CTC) on each such person and issued to the trainee with acknowledgment.
Like this, we can think of some more conditions to strengthen the objective. Needless to say, the success of this exercise would depend much on avoiding unfair labor practices.
Kumar S.
From India, Bangalore
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As you know, there have been numerous litigations pending in various courts over the bond during training. It's very difficult to draft a foolproof agreement of a bond that cannot be challenged in Indian courts. However, certain aspects have to be looked into very closely.
First of all, proving beyond doubt how much and in what manner the employer incurred certain costs on training the employee. Though it is no doubt could be arbitrary, complete documentation would be helpful, which should be verifiable.
Secondly, many companies follow a "Management Trainee," "Engineer Trainee," or some such designation for the initial appointment, with a provision for confirmation subject to the availability of posts, etc. This system aids the employer in showcasing that the entire period the employee has been under training and whatever CTC during the period is the "cost of training."
Thirdly, as the adage goes - "...not only should justice be done, but it should also be seen to have been done," which means there should be visible evidence that the employee is indeed under training. This could be ensured by more than one method. Like - Prepare and circulate a detailed training manual and conduct the day-to-day affairs accordingly. Earmark certain hours of the duty hours as "training hours," which should be well-documented.
Fourthly, there should be an exclusive Trainer Officer whose time should be substantially spent with the "Trainee."
Fifthly, a periodical progress report should be prepared about the Trainees' progress together with the progressive amount spent (CTC) on each such person and issued to the trainee with acknowledgment.
Like this, we can think of some more conditions to strengthen the objective. Needless to say, the success of this exercise would depend much on avoiding unfair labor practices.
Kumar S.
From India, Bangalore
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I understand the HR side to this discussion. I have managed where this was implemented at a very large scale, even worked on the recovery when there was a non-adherence.
However, is this legal? How far can these training or travel agreements be challenged in the court of law?
Regards, (Cite Contribution)
From India, Mumbai
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However, is this legal? How far can these training or travel agreements be challenged in the court of law?
Regards, (Cite Contribution)
From India, Mumbai
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Dear Cite Contribution,
Thank you for your comments on my suggestions. To make things legally viable, senior individuals from NASCOM or prominent IT companies should step forward and address the issue of how to help small software companies survive against the threat of larger competitors who hinder their growth by poaching their trained workforce. It is important not to shy away from this responsibility.
Let's await some comments from them and then discuss any legal issues that may arise.
Regards
From India, Delhi
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Thank you for your comments on my suggestions. To make things legally viable, senior individuals from NASCOM or prominent IT companies should step forward and address the issue of how to help small software companies survive against the threat of larger competitors who hinder their growth by poaching their trained workforce. It is important not to shy away from this responsibility.
Let's await some comments from them and then discuss any legal issues that may arise.
Regards
From India, Delhi
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