Curbing attrition

While unemployment is a big concern for individuals, ironically, attrition has become a major concern for entities. Strangely, on one hand, the administration is grappling with resolving the issue of joblessness among the masses; on the other, many simply lose the value of a job right after getting one, indulging in frequent job hopping. There are a number of instances where employees, after acquiring industry knowledge, abandon their employers. This impacts the productivity of the organization to a large extent, apart from the credibility of the individual.

As per the law of the land, an employer cannot force an employee to work, even if the contract binds him to do so. According to the Specific Relief Act, 1963, a contract of personal service cannot be enforced, except in rare cases where the contract is subsisting. One cannot force an employee to work, though the company may claim damages for the loss caused due to sudden leaving. With the changing economic scenario, it is incumbent upon the legislature to provide for such issues. Organizations throughout the country are witnessing employees quitting work, at times even avoiding their applicable notice period. To cope with the pressure, entities hire temporary staff or burden other staff to work overtime. But if the vacant post is one that requires skills, problems may become more complex. There is a need to devise a middle path and clear provisions for curbing such issues.

In fact, nowadays business houses are imparting training to their employees to improve the quality of goods and services, and the costs of these training are quite high. Needless to say, companies expect a return on their investment by having competent and well-trained employees serve them for a reasonable period of time pursuant to the training. Most certainly, investment is a sheer waste of money if businesses are required to consistently train new staff each time. Therefore, as a condition of employment, companies require employees to sign a training bond prior to receiving such training. The basic premise of such a contract is that in exchange for training, the employee consents to remain with the company for an agreed period of time. As per the terms, if he leaves an organization before the stipulated time, he is required to pay back compensation, which could be a pro-rated share of the training costs as well as compensation and damages.

While drafting an agreement claiming damages and compensation, one cannot be unreasonable. A company's reaction to an employee leaving prior to the completion of their contractual notice period should be commensurate with the impact it has on the business. Clauses may include the period of notice/notice pay, the amount of damages and compensation, any money spent on training, etc. The amounts mentioned should be overall comparable to the expected impact and not beyond it. It is important that the provisions of the contract are rational; otherwise, they may be held to be void if tried in a court of law. This is relevant from a legal angle as well as from an organizational perspective. Tying an employee into a role that he does not want to continue may result in poor performance and affect company standards. In a case where the company has spent a lot of time and money training the employee and the bond is for a reasonable time period, the compensation sought for breaking the bond may be considered justified when tried in a court of law. However, in a case where the company pays a lower salary or other clauses like the time period, etc., are imprudent, the arrangement can be termed arbitrary. Wherein an employee has spent a part of the contractual period and violated the rest of it, the bond amount awarded by the court may also be proportionate.

Though compensation for breaking a bond is achievable, an injunction compelling the employee to serve the company is generally held to be barred by the provisions of the Specific Relief Act, according to which a contract of personal service cannot be enforced. It is also hit by Section 27 of the Indian Contract Act, 1872, which prohibits any agreement in restraint of trade and profession. Nevertheless, seeking compensation is, in itself, a strong deterrent.

The legislature needs to consider these everyday issues of our economy by bringing in straightforward regulations. This would provide ease of business to entities, apart from a better-trained and stable workforce rather than a fickle-minded one.

The writer is a practising Advocate in Supreme Court and High Court of Delhi. Views expressed are personal