Dear Members- I am posting this thread to seek guidance in dealing with the Performance bonus & Retention Payout as detailed below..
Retention Payout-
There is a retention letter that is signed off by the colleague which articulates that if you leave the company before the said period your are liable to pay the complete amount, such amount is paid to colleague upfront. If a colleague is on a active Retention clause with a lock in period of 18 months,if the colleague resign before the completion of 18 months should the pay back be the entire Retention amount? Should this amount not be pro-rated per the tenure served?
Is it lawful to recover the complete amount ?
Performance Bonus:
The perofmance bonus is added as part of CTC and the performance year is from Jan to Dec and the payout happens in March, the company exit policy mentions that should you be on notice at the time of disbursment you will be not be paid.
Question is: Is this legally correct to hold the bonus of a colleague who has worked through the year and has performed well,the justification for not paying the bonus is because the colleague is on notice,however, the colleague has resigned in Feb, it is the company that has chosen to pay the bonus in arrears so why should the colleague be penalised?
Can you please advice.
attribution <link outdated-removed> #ixzz2utQn4wHp
From India, Bangalore
Retention Payout-
There is a retention letter that is signed off by the colleague which articulates that if you leave the company before the said period your are liable to pay the complete amount, such amount is paid to colleague upfront. If a colleague is on a active Retention clause with a lock in period of 18 months,if the colleague resign before the completion of 18 months should the pay back be the entire Retention amount? Should this amount not be pro-rated per the tenure served?
Is it lawful to recover the complete amount ?
Performance Bonus:
The perofmance bonus is added as part of CTC and the performance year is from Jan to Dec and the payout happens in March, the company exit policy mentions that should you be on notice at the time of disbursment you will be not be paid.
Question is: Is this legally correct to hold the bonus of a colleague who has worked through the year and has performed well,the justification for not paying the bonus is because the colleague is on notice,however, the colleague has resigned in Feb, it is the company that has chosen to pay the bonus in arrears so why should the colleague be penalised?
Can you please advice.
attribution <link outdated-removed> #ixzz2utQn4wHp
From India, Bangalore
Dear Seniors- Request you to provide your inputs on the above context at your earliest convenienece. Regards Rahul
From India, Bangalore
From India, Bangalore
I posted a reply but it did not reflect here :(
1. Retention Payout is an amount paid by the employer to the employee when joining, like a joining bonus. It is subject to whatever terms they mutually decide on. The amount is not covered under payment of wages act or any other labour legislation. Therefore, this will be purely based on the contract act. Under the contract act, the employee is agreeing to some terms and accepting a compensation for the same. So where he has failed to fulfill his obligations, he is required to return the compensation. Where the terms clearly state he has to return the full money if he leave early, then he needs to honour what he has agreed on.
An exception would be if the terms were misrepresented or not explained or if it was signed under coresion.
2. Performance Bonus is an amount paid outside the Payment of Bonus act and therefore does not have a statutory protection or norms. It depends on what is in the scheme the management has put out. (I am assuming the management has clearly laid out the scheme and circulated it or otherwise clearly informed the terms for the concerned employee).
If the terms specified that he will not be eligible on resignation, then he has no option to protest against it now. He should have refused to agree when the terms was made known to him. On the other hand, if there is no scheme or terms specified at all, then it is at the discretion of the management who may or may not wish to pay it now.
While it may not be fair that he will not get the money since he has resigned, but if that is the terms, then that is it.
Please remember that CTC is only an internal document that shows the cost to the company (or likely cost to the company) and not what the employee is getting. So the amount being in the CTC is immaterial
From India, Mumbai
23921. Retention Payout is an amount paid by the employer to the employee when joining, like a joining bonus. It is subject to whatever terms they mutually decide on. The amount is not covered under payment of wages act or any other labour legislation. Therefore, this will be purely based on the contract act. Under the contract act, the employee is agreeing to some terms and accepting a compensation for the same. So where he has failed to fulfill his obligations, he is required to return the compensation. Where the terms clearly state he has to return the full money if he leave early, then he needs to honour what he has agreed on.
An exception would be if the terms were misrepresented or not explained or if it was signed under coresion.
2. Performance Bonus is an amount paid outside the Payment of Bonus act and therefore does not have a statutory protection or norms. It depends on what is in the scheme the management has put out. (I am assuming the management has clearly laid out the scheme and circulated it or otherwise clearly informed the terms for the concerned employee).
If the terms specified that he will not be eligible on resignation, then he has no option to protest against it now. He should have refused to agree when the terms was made known to him. On the other hand, if there is no scheme or terms specified at all, then it is at the discretion of the management who may or may not wish to pay it now.
While it may not be fair that he will not get the money since he has resigned, but if that is the terms, then that is it.
Please remember that CTC is only an internal document that shows the cost to the company (or likely cost to the company) and not what the employee is getting. So the amount being in the CTC is immaterial
From India, Mumbai
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