Here is the situation:
I was working for an MNC in India and resigned in February.
I was eligible for the variable pay (or bonus) for the period of July to December 2014 (given out every 6 months)
I put my paper (and communicated the notice period) on 16 January, 2015
My last working day was 13 February, 2015
When I received my final settlement, this variable component was not present.
Reason given: I need to be on roles of the company at the time of payout. Apparently this was paid on February 28.
This aspect was mentioned in the offer letters and this would come as a surprise for all the employees who had resigned around this time.
In my view, the criteria of employee to be on roles at the time of payout is not valid as company can differ the payment by a month due to some reason.
Any view on this is welcome. What is the best way to contest this?
From India, Bangalore
I was working for an MNC in India and resigned in February.
I was eligible for the variable pay (or bonus) for the period of July to December 2014 (given out every 6 months)
I put my paper (and communicated the notice period) on 16 January, 2015
My last working day was 13 February, 2015
When I received my final settlement, this variable component was not present.
Reason given: I need to be on roles of the company at the time of payout. Apparently this was paid on February 28.
This aspect was mentioned in the offer letters and this would come as a surprise for all the employees who had resigned around this time.
In my view, the criteria of employee to be on roles at the time of payout is not valid as company can differ the payment by a month due to some reason.
Any view on this is welcome. What is the best way to contest this?
From India, Bangalore
The catch with variable component of salary is that in case you leave the company before the financial year ends, you have to forgo this amount.
Incentive bonus is not part of wages.
This needs to be kept in mind.However you can contact higher management and request them to release bonus as you had contributed towards achieving company's targets and targets set for you.
further the company may be having rules which specify that the employee should be on rolls as on a aprticular date for becoming eligible for Incentive bonus.
Persuasion and tactical requests will be of help in getting bonus.
Litigation may not succeed.
From India, Pune
3131Incentive bonus is not part of wages.
This needs to be kept in mind.However you can contact higher management and request them to release bonus as you had contributed towards achieving company's targets and targets set for you.
further the company may be having rules which specify that the employee should be on rolls as on a aprticular date for becoming eligible for Incentive bonus.
Persuasion and tactical requests will be of help in getting bonus.
Litigation may not succeed.
From India, Pune
Thanks Nathrao
Since this is an US company, financial year is from Jan to Dec, and I was there during that period. They dont seem to have a particular date on which the employee has to be on rolls, but having a policy that employee has to be on rolls at the time of payout. I find this vague because company can decide to pay even at a later date, and the employee who is resigning has not control over it. BTW this is part of the variable pay kept aside from the CTC and not really an incentive or bonus.
From India, Bangalore
Since this is an US company, financial year is from Jan to Dec, and I was there during that period. They dont seem to have a particular date on which the employee has to be on rolls, but having a policy that employee has to be on rolls at the time of payout. I find this vague because company can decide to pay even at a later date, and the employee who is resigning has not control over it. BTW this is part of the variable pay kept aside from the CTC and not really an incentive or bonus.
From India, Bangalore
Anyway nothing much can be done about it. However you can request the higher management to consider your case in proper light in view of all these circumstances.
From India, Pune
From India, Pune
If the policy mentions that employee has to be on rolls then company is not liable to pay. However, you may approach senior management and request for a discretionary payout.
From India, Bangalore
From India, Bangalore
You may ask why the duration is not mentioned about payment of variable pay after close of every six month it should be clear that it shall be paid with in one month or two month after the close of every six months and it can't be indefinite duration or at the feasibility of mgt. But, I think you should thoroughly examine the terms and conditions of appointment at the time of joining in future
From India, Lucknow
From India, Lucknow
Dear Nathrao,
You have given your views axiomatically. Nevertheless, it remains to be seen whether these hold scrutiny against (a) Payment of Wages Act and (b) Indian Contract Act, 1872.
Though I am not a lawyer, I have read judgements on ICA, 1872. With my limited knowledge, I say that if the employers have imposed a condition that at the time of disbursement of variable pay, employees need to be on the rolls of the company otherwise they forego the variable pay, then the agreement is one-sided and it may not stand against ICA, 1872.
Furthermore, provisions of Payment of Bonus Act, 1965 make it mandatory disbursement of bonus to the employee, whether they are on the rolls or not. While the issue at hand is not of bonus but of variable pay, for the logical purposes, PBA, 1965 can very well be used.
Fixed or variable, simple definition of wages is "Income received for work". To make employee work and give him only the part wages is unlawful.
For GHedge: - Has your FNF been completed? Have you received the service-cum-employment certificate? If yes, then send a letter to the MD for non-payment of variable component of the wages by RP/AD. If MD remains inexorable to your plea, then you may approach a lawyer who handles the cases relating to ICA, 1872 and obtain his/her views.
All the best!
Dinesh Divekar
The catch with variable component of salary is that in case you leave the company before the financial year ends, you have to forgo this amount.
Incentive bonus is not part of wages.
This needs to be kept in mind.However you can contact higher management and request them to release bonus as you had contributed towards achieving company's targets and targets set for you.
further the company may be having rules which specify that the employee should be on rolls as on a aprticular date for becoming eligible for Incentive bonus.
Persuasion and tactical requests will be of help in getting bonus.
Litigation may not succeed.
From India, Bangalore
You have given your views axiomatically. Nevertheless, it remains to be seen whether these hold scrutiny against (a) Payment of Wages Act and (b) Indian Contract Act, 1872.
Though I am not a lawyer, I have read judgements on ICA, 1872. With my limited knowledge, I say that if the employers have imposed a condition that at the time of disbursement of variable pay, employees need to be on the rolls of the company otherwise they forego the variable pay, then the agreement is one-sided and it may not stand against ICA, 1872.
Furthermore, provisions of Payment of Bonus Act, 1965 make it mandatory disbursement of bonus to the employee, whether they are on the rolls or not. While the issue at hand is not of bonus but of variable pay, for the logical purposes, PBA, 1965 can very well be used.
Fixed or variable, simple definition of wages is "Income received for work". To make employee work and give him only the part wages is unlawful.
For GHedge: - Has your FNF been completed? Have you received the service-cum-employment certificate? If yes, then send a letter to the MD for non-payment of variable component of the wages by RP/AD. If MD remains inexorable to your plea, then you may approach a lawyer who handles the cases relating to ICA, 1872 and obtain his/her views.
All the best!
Dinesh Divekar
The catch with variable component of salary is that in case you leave the company before the financial year ends, you have to forgo this amount.
Incentive bonus is not part of wages.
This needs to be kept in mind.However you can contact higher management and request them to release bonus as you had contributed towards achieving company's targets and targets set for you.
further the company may be having rules which specify that the employee should be on rolls as on a aprticular date for becoming eligible for Incentive bonus.
Persuasion and tactical requests will be of help in getting bonus.
Litigation may not succeed.
From India, Bangalore
Contract is a meeting of minds and even if some terms are one sided,it need not be a violation of ICA1872.
The term should not illegal that is all.
Bonus is a tool for retention of employees.
i know of many cases where in employees put in resignation only after securing bonus in hand.
Drawing a simile between PBA and Payment of Wages Act may not actually work..
Advice would become very complicated and simplest method was suggested to try and secure bonus or variable pay.
Once matter goes into litigation,no one can be sure of outcome.
From India, Pune
The term should not illegal that is all.
Bonus is a tool for retention of employees.
i know of many cases where in employees put in resignation only after securing bonus in hand.
Drawing a simile between PBA and Payment of Wages Act may not actually work..
Advice would become very complicated and simplest method was suggested to try and secure bonus or variable pay.
Once matter goes into litigation,no one can be sure of outcome.
From India, Pune
Agree with Mr Nathrao. Once a person resigns from the organization, payment of any sort of incentive including bonus will be the descretion of the respective managements. Even in PSUs, Productivity incentive is not paid to the officers who resigned whereas the same is paid to the superannuated employees. Litigation would lead to only waste of money.
From India, Hyderabad
From India, Hyderabad
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