LCI Learning

Share on Facebook

Share on Twitter

Share on LinkedIn

Share on Email

Share More

Raja (Project Manager)     26 February 2013

Pending dues bonus

Hello

  I am a Software Engineer and was working for a foreign investment company. As per the service agreement Anuual Bonus and performance Bonus was mentioned as part of renumeration agreed upon under service agreement. Annual Bonus and Performance bonus was mentioned as fixed in the Salary break up. Both Anuual Bonus and Performance bonus was revised (raised)  along with yearly hike. The company then decided to teminate few employees since the company is taking over some other company. The company paid the annual bonus and performance bonus to those employees whom the company retained and terminated others along with me without paying the 2 years annual and performance bonus.

 The company has so far not done any performance review to anyone. My question is can I claim the Annual and Performance bonus. Since its mentioned as fixed in service agreement .

 Also there is no condition or any such documents to provide the annual and performance bonus. Both are mentioned as fixed in Salary break up offer letter/

Please clarify.

Thanks


Raja



Learning

 10 Replies

Kumar Doab (FIN)     26 February 2013

You have posted that:

--“Also there is no condition or any such documents to provide the annual and performance bonus. Both are mentioned as fixed in Salary break up offer letter/”

“The company paid the annual bonus and performance bonus to those employees whom the company retained”

If this is fact there may be a chance to succeed.

However did you submit any representation to good offices of appointing authority, MD, Chairman in writing under acknowledgment during course of employment and did company supply any reply?

Was there any dispute on payment of bonus?

If you are eligible employee for Annual bonus, customary bonus  as described in Payment of Bonus Act should have been paid within 8 months from close of accounting year and 30th Nov of the subsequent year to avoid penalty.

You may approach o/o Labor commissioner.

(Payment of Bonus Act, 1965:

Sec 2, Definitions

{21} Salary or Wage

 

 Bonus depends upon Basic salary, DA & the food allowance or value of free food.
 


M
inimum Bonus 8.33% min level upto Rs. 3500/- & Maximum Bonus @20%.

max level upto Rs. 8400/-

Section 12: .

 

 Calculation of bonus with respect to certain employees.

 

       2*[12.  Calculation  of bonus with respect to certain employees.-

 Where  the  salary  or wage of an employee exceeds 3*[two thousand and

 five hundred rupees] per mensem, the bonus payable  to  such  employee

 under  section  10  or, as the case may be, under section 11, shall be

 calculated as if his salary or wage  were  3*[two  thousand  and  five

 hundred rupees] per mensem.])

 

--‘terminated others along with me without paying the 2 years annual and performance bonus.’

Did you sign acceptance of FNF statement? Did the company pay any lay off compensation and sign any agreement with you at the time of termination?

Limitation of 3 years may apply in your case.

Kindly show your offer letter, appointment letter, service agreement, CTC sheet/remuneration sheet, standing orders of the company, termination order, circular announcing that company is taking over another company, HR policy, service rules, exit policy, severance policy, any other relevant document etc……to a competent and experienced service lawyer/labor consultant, give inputs in person and spend quality time with your lawyer and let your lawyer evaluate the merits. Let your lawyer’s opinion be final on points discussed above and you may proceed under expert advice of your lawyer, and as deemed fit at your end.

 

 

ply in your case.

Kindly show your offer letter, appointment letter, service agreement, CTC sheet/remuneration sheet, standing orders of the company, termination order, circular announcing that company is taking over another company, HR policy, service rules, exit policy, severance policy, any other relevant document etc……to a competent and experienced service lawyer/labor consultant, give inputs in person and spend quality time with your lawyer and let your lawyer evaluate the merits. Let your lawyer’s opinion be final on points discussed above and you may proceed under expert advice of your lawyer, and as deemed fit at your end.

You may find the attachment "Why employees win bonus cases " as useful.

 Valuable advice of learned experts/members is sought.


Attached File : 511525244 why employees win bonus cases oid6366.pdf, 511525244 payment of bonus act 1965.pdf downloaded: 162 times

Raja (Project Manager)     27 February 2013

Thanks for your inputs and suggestions. There was no dispute whatso ever. The company just refused to pay annual and performance bonus saying that we are terminating and there is no need to pay. There was no compensation paid nor any agreement signed except the termination letter which I have accepted with protest.

As per my understanding the Bonus is mentioned as part of remuneration and is in montly salary breakup  which I believe does not fall under Bonus rahter it is a Salary though termed as bonus. Am I correct in understanding this.

 

Thanks


Raja

Kumar Doab (FIN)     27 February 2013

You have posted that:

“termination letter which I have accepted with protest.”

“As per my understanding the Bonus is mentioned as part of remuneration and is in montly salary breakup  which I believe does not fall under Bonus rahter it is a Salary though termed as bonus.”

“ Am I correct in understanding this.” (You may or you may not be.)

The HR in the companies defines CTC to their masters in the management or the masters in god offices ask the HR personnel to define CTC of employees.

CTC is being defined as cost to company due to employee…….

 And the HR has started adding even statutory contributions including Bonus, Gratuity,…….. which company has to pay due to employee being in the company.

HR shows the cost on employee on account of Bonus etc…….in monthly a cost which is being viewed as monthly salary by you.

A wise employee should look at cash in hand component/guaranteed cash, and negotiate so that he is able to get the guaranteed cash he wants…

The employee who is not vigilant shall get the total package as negotiated but less guaranteed cash, as the other components are not guaranteed e.g. company may mention Bonus ( as per Payment of Bonus Act), Gratuity ( as per Payment of Gratuity Act) and thus attaching a tag/condition to it…..

 

Some companies may add employer’s share of income tax, and what else not………and thus show a big cost to company (CTC) and actually it starts paying less and less. Employee is shown a fat package but n fact it is a bubble.

Another view point is that if employee’s remuneration is stated in appointment letter by CTC and CTC sheet is attached, it becomes part of the contract and contractual obligation on employer and employee may succeed in staking claim for all components Bonus, Gratuity, performance bonus……..mentioned in CTC sheet.

Performance bonus is for past performance whereas HR view it as a tool for expecting performance in future too and if the employee has resigned HR and their masters feel that there won’t be any ROI (Return on Investment) in future, hence the reluctance to pay.

How can an employee expect HR to pass the payment of these components as HR has projected these as costs with elaborations to its masters? HR is bound by its Employer’s policy.

These tags are not explained in Employee policy which is applicable to employees.

Another point is that in today’s market scenario even a Vice President can not forecast how long he will be able to be in the company, leave apart HR personnel. So while in one employment they are looking for another employment and do not want to mire themselves in issues which are properly described in Employer’s policy crafted/drafted/prepared/presented by them.

Thus the employees who succeed in drilling sense into the heads may get the payments while in employment/not in employment without agitating before lawful authority/court of law.

Others may have to approach a court of law, and plead based on merits.  

Let your lawyer’s opinion be final on points discussed above and you may understand the merits and force in your claim and proceed as deemed fit at your end under expert advice of your lawyer.

Valuable advice of learned experts/members is sought.

 

Raja (Project Manager)     27 February 2013

There are absolutely no terms and conditions for payment of bonus. Alos its important to note the package was raised for 2012-2013 without paying the previous years bonus.  I am attaching here my offer letter in brief . Experts Kindly advice.


Attached File : 725241420 3 003.jpg, 725241420 3.jpg downloaded: 192 times

Kumar Doab (FIN)     27 February 2013

As per the attachements posted by you the captioned amounts are part of gross salary.

You may write under acknowledgment to good offices of your appointing authority,MD,Chairman, Company Secretary for payment by bank DD only and supply thru redg. post/speed only.

You may mention that postage prepaid (as purchased from PO) self addressed envelope is enclosed for sending reply/DD thru redg. post to you so as to reach you say within ……days. It is felt that limitation period is 3Y.

Based on the reply of the company or if company maintains studied silence you may proceed further.

Kindly show your offer letter, appointment letter, service agreement, CTC sheet/remuneration sheet, standing orders of the company, termination order, circular announcing that company is taking over another company, HR policy, service rules, exit policy, severance policy, any other relevant document etc……to a competent and experienced service lawyer/labor consultant, give inputs in person and spend quality time with your lawyer and let your lawyer evaluate the merits. Let your lawyer’s opinion be final on points discussed above and you may proceed under expert advice of your lawyer.

Valuable advice of learned experts/members is sought.

Raja (Project Manager)     22 March 2013

The management agreed to settle the amount after I sent a lawyer notice. The date of settlement has passed and there is no news of the payment from the mangement. To say I have been cheated for the second time. I have already filed a lega case under Wages act. Since the management has done this to all the employees, I would like to know the possiblity of getting an injection to the business until the matter is settle. Can we employees file a joint petiton.

 

 Looking forward from expert advice. 

Kumar Doab (FIN)     22 March 2013

Your resolve is appreciable.

You are in which state? HO/redg. office of the company is in which state?

You have posted that:

--“The management agreed to settle the amount after I sent a lawyer notice. The date of settlement has passed and there is no news of the payment from the mangement.”

Did the company agree to settle in writing?

If yes you can proceed against the company.

Did you mention that postage prepaid (as purchased from PO) self addressed envelope is enclosed for sending reply/DD thru redg. post to you so as to reach you say within ……days, and supply a postage pre paid envelope.

--“Since the management has done this to all the employees,”

“Can we employees file a joint petiton.”

THE PAYMENT OF WAGES ACT, 1936

2. Definitions.

3*[(vi) "wages" means…..

(Wage ceiling has been increased to Rs.18000/pm.Look into def. of wages)

(d) any sum which by reason of the termination of employment of the person employed is payable under any law, contract or instrument which provides for the payment of such sum, whether with or without deductions, but does not provide for the time within which the payment is to be made;

4. Fixation of wage-periods.- (1) Every person responsible for the payment of wages under section 3 shall fix periods (in this Act referred to as wage-periods) in respect of which such wages shall be payable.

(2) No wage-period shall exceed one month.

5. Time of payment of wages.

(2) Where the employment of any person is terminated by or on behalf of the employer, the wages earned by him shall be paid before the expiry of the second working day from the day on which his employment is terminated:

6. Wages to be paid in current coin or currency notes.- All wages shall be paid in current coin or currency notes or in both:

5*[Provided that the employer may, after obtaining the written authorisation of the employed person, pay him the wages either by cheque or by crediting the wages in his bank account.]

14. Inspectors.- (1) An Inspector of Factories appointed under 1*[sub-section (1) of section 8 of the Factories Act, 1948 (63 of 1948)], shall be an Inspector for the purposes of this Act in respect of all factories within the local limits assigned to him.

3) The State Government may, by notification in the Official Gazette, appoint such other persons as it thinks fit to be Inspectors for the purposes of this Act, and may define the local limits within which and the class of factories and 2*[industrial or other establishments]

3*[(4) An Inspector may,-- (a) make such examination and inquiry as he thinks fit

in order to ascertain whether the provisions of this Act or rules made thereunder are being observed;

(d) require by a written order the production at such place, as may be prescribed, of any register or record maintained in pursuance of this Act and take on the spot or otherwise statements of any persons which he may consider necessary for carrying out the purposes of this Act;

(e) seize or take copies of such registers or…………..

( Employer has to maintain the record for 3 years, including pay slip as per Sec 13A whihc should be signed by employee)

15. Claims arising out of deductions from wages or delay in payment

ofwages and penalty for malicious or vexatious claims.

Provided that every such application shall be presented within 1*[twelve months] from the date on which the deduction from the wages was made or from the date on which the payment of the wages was due to be made, as the case may be:

16. Single application in respect of claims from unpaid group.

 

--“I have already filed a lega case under Wages act.”

Has the case been accepted or rejected?

Has the employer filed reply and appeared?

Has it taken an appeal that compliant is not filed within 12 months?

--“Can we employees file a joint petiton.”

If it implies that all of you wish to approach the company as creditors, with winding up petition you may need the counsel of an expert lawyer to evaluate the merits, and to prepare a petition which does not get rejected.

There are some threads at LCI also e.g.;

Discussion > Labour & Service Law > Disputes > Delay in full and final settlement payment

https://www.lawyersclubindia.com/forum/details.asp?mod_id=72011&offset=1#.UNRXofLZ1JI

 

There are some threads initiated by employees who succeeded in lodging a complaint with police under Sec406, 420 and sent zitters down the spine of unscrupulous employers……

 

 

Discussion > Labour & Service Law > Shops Act > Resignation of an employee

https://www.lawyersclubindia.com/forum/Resignation-of-an-employee-76209.asp#.UUwaeUpFZ_4

 

https://www.lawyersclubindia.com/forum/Salary-not-paid-76585.asp#.UUwaVkpFZ_4

 

 

There are employees who succeeded in getting suitable publication in electronic and print media.

 

---You may also look at the provisions of SE Act applicable to your state.

The SE Act does not indiscriminate between workman and non workman, and is applicable to all employees.

e.g. SE Act Delhi:

2. Definitions: (8)  “employer” means the owner of any establishment about the business of which persons are employed, and where the business of such establishment is not directly managed by the owner, means the manager, agent or representative of such owner in the said business;

19.  TIME AND CONDITIONS OF PAYMENT OF WAGES:

(5) Where the employment of any person is terminated by or on behalf   of the employer, the wages earned by him shall be paid before the expiry of the second working day after the day on which his employment is terminated.

21. Claims relating to wages.—(1) The Government may by notification in the Official Gazette, appoint any Commissioner for Workmen’s Compensation Act or other officer with experience as a Judge of a Civil Court or as a Stipendiary Magistrate to be the authority to hear and decide all claims arising out of delayed payment or non-payment of earned wages of an employee employed in any establishment.

37. Powers and duties of the Inspector:

COMMENTS

(b) Duties of the Inspector: (i)  that in dispensing with the services of an employee the provision of the Act and Rules have been complied with and no  dues payable under the Act or Rules have been withheld;

43. Determination of employer for the purpose of this Act.—

(Therefore the employer as defined in the Act should have reason to feel concerned….)

 

SE Act Bombay even goes further to impress that a company to which SE act is applicable IESO Act shall also apply and Inspector under SE Act shall be the Inspector for the enactment and even for Payment of wages act…..

 

---Designation alone does not decide if employee is a workman or not. Your lawyer may ask you a set of structured questions and may opine that you are a workman.

Some states had granted blanket exemption to IT companies from the provisions of IESO Act and some states had not. State of Karnataka in March instructed all IT companies to frame the standing orders for certification and till then Model Standing Orders shall apply.

If IESO Act is applicable to the company and company has framed its certified standing orders quote from it or if standing orders are not certified quote from Model Standing Orders:

13.          Termination of employment:

(3)   Where the employment of any workmen is terminated, the wages earned by him and other dues, if any, shall be paid before the expiry of the second working day from the day on which his employment is terminated.

16.  Certificate on termination of service.--Every permanent  workman shall be entitled to a service certificate at the time of his dismissal, discharge or retirement from service.

 

NOTE. - There is a provision under  this  Act for issuing a service certificate at the time of  dismissal, discharge or retirement and every person is entitled to take such certificate.

 

Valuable advice of learned experts/members is sought.

 


Attached File : 351609481 karntaka now applicability%20of%20standing%20order%20to%20it%20industries.doc, 351609481 delhi shops & establishments act, 1954.pdf, 351609481 model%20standing%20orders.doc downloaded: 257 times

Kumar Doab (FIN)     22 March 2013

Attached.


Attached File : 351609481 payment of wages act 1936.pdf downloaded: 97 times

Raja (Project Manager)     22 March 2013

I am from Karnatka and Company is also registered in Karnataka . The directors and all funding comes from a parent company from a Europe country. I had a confirmation email from the director mentioning the settlement would be done mentioning the date.

 I am yet to file a case. Sorry mentioned wrongly early that case is file.  The paper works are ready though . I held back from filing the case as the director agreed to settle .

 Under what circumstances the case would be rejected? As I have furnished some of the important paper here it would be helpful if I could know the possibility of winning the claim..

I fully understand it all depends on the court proceeding . But just curious to know whether my case is strong enough to file a case. 

 

 Appreciate all you feedback.

Kumar Doab (FIN)     22 March 2013

You have posted that:

---“I am from Karnatka and Company is also registered in Karnataka.”

You could have stated it in your first post, itself.

List of Labor Officials, website, contact details, Unions etc has already been attached. You may check with them.

Dept. of Labor website is: https://labour.kar.nic.in/labour/karshopscommercial-1961.htm

You may confirm the applicability of Model Standing Orders till standing orders are certified.

You may approach a competent and experienced labor consultant/service lawyer, with all your docs, records of emails etc and spend quality time with your lawyer.

Your lawyer may opine that you are covered within the purview of workman.

Let your lawyers opinion be final on all points discussed in this thread.

If you wish to avail the services of a LCI lawyer you can conduct search at:

https://www.lawyersclubindia.com/lawyers_search/#.UUv2qEpFZ_4

Your near and dear ones can also guide you to a competent and experienced labor consultant/service lawyer. In each city there are few lawyers who practice in labor /service law only and specialize in it and they are well known. Some lawyers may prefer to take up employers and some may prefer to take up employees cases.

 

SE Act Karnataka is attached. However you may obtain the latest version, notifications from the officials or buy from market.

2. Definitions: h. Employer means…………….

(Thus the employer as per this definition whose name should be mentioned in registration certificate which has to be displayed on notice board near entry/reception, appointing authority, MD/Director, Chairman, CEO, Company Secretary….are the guys to whom you should represent.)

You may go thru other clauses as already discussed in this thread.

--“ I am yet to file a case. Sorry mentioned wrongly early that case is file.  The paper works are ready though . I held back from filing the case as the director agreed to settle .”

In this forum we are trying our level best to help. If you provide full information and facts, you would gain.

You should not conceal.

--“ Under what circumstances the case would be rejected? As I have furnished some of the important paper here it would be helpful if I could know the possibility of winning the claim..”

The amounts being claimed by you are part of your gross salary and should be treated as wages.

If you have submitted representations during employment, and even later, even if by emails you may put these in order date wise and show these to your lawyer.

---“I had a confirmation email from the director mentioning the settlement would be done mentioning the date.”

This should help you even if you have not filed applications/complaints with in time as specified in enactments.

However let your lawyers opinion be final on all points discussed in this thread.

Valuable advice of learned experts/members is sought.


Attached File : 565275912 karnataka shops and commercial establishment act.pdf downloaded: 50 times

Leave a reply

Your are not logged in . Please login to post replies

Click here to Login / Register