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Shivani   08 June 2016

Reduction in ctc and performance pay

I am working in IT company. Even after performing more than 100%, my performance band has been degraded in current appraisal cycle. Hence performance pay component also been reduced from my salary which results the CTC reduction by 25%. I would like to know whether it is right to remove performance pay component and reduce individuals CTC. What action I can take in this case? Can I file a case in Labour court? Please advise.



Learning

 3 Replies

G.L.N. Prasad (Retired employee.)     09 June 2016

There must be always an appeal procedure in performance appraisal ?

I am afraid that , during employment, working in institution, confronting with management and filing cases involves complications, and I doubt whether Labor Court has any thing to do with that as IT professions are highly paid, and labor court can only involve in matters of employer's violation in law and victimisation and not on performance appraisal matters.  Yes.  one may file suit, but one can not assume ultimate result after such long and expensive struggle, 

Kumar Doab (FIN)     09 June 2016

The performance pay package is 'Reduced' or 'Removed'?

 

 

1. It is true as can be ascertained from various publications that majority of the employee's in IT/ITeS/BPO/KPO/software companies etc were ill informed and unwilling to unite.

There is female IT employees union too.

 

2. IT/ITeS/BPO/KPO/software companies have united and have formed unions and affilliated with trade unions. The IT employees unions have done a good job.

Still as it can be ascertained from various publications that majority of the employee's in IT/ITeS/BPO/KPO/software companies etc are ill informed and unwilling to unite.

 

3. State e.g. Karnataka had granted blanekt exemption from provision of standing orders to IT/ITeS/software companies. This state had issued guidelines to form 'Greivance Redressal Committee' in companies.Such commiittee might be dominated with employer representatives.

 

In ID Act there is provision for 'Works Committee' and it is an authority as per the Act. 

 

You may carefully go thru it.

3*[CHAPTER IIB REFERENCE OF CERTAIN INDIVIDUAL DISPUTES TO GRIEVANCE SETTLEMENT AUTHORITIES 9C. Setting up of Grievance Settlement Authorities and reference ofcertain individual disputes to such authorities. 

Section 3 in The Industrial Disputes Act, 1947

https://pblabour.gov.in/pdf/acts_rules/inustrial_disputes_act_1947.pdf

https://indiankanoon.org/doc/452505/

 

4. CTC is annual/monthly pay package........................Promised pay package.

The reduction in promised pay can not be just like that.

Employers and HR personnel have been exerting to find ways to reduced pay package without getting caught in claims/violations and hence different and flimsy names are given for designations/pay heads etc

The bosses are under obligation to supply appraisal matrix, conduct appraisal in time, keep it transparent, give a signe copy to employee on the spot and address the queries.

25% reduction is =1/4th pay package.

 

If the compnay and bosses unwilling to redress, approach unions, Labor Law Consultant and/or join any other establishment at a better position/package.  

 

 

Rama chary Rachakonda (Secunderabad/Telangana state Highcourt practice watsapp no.9989324294 )     09 June 2016

Employers should always review their employee’s employment contract before deciding to reduce pays. If the contract includes a provision that allows the employer to undertake an annual performance review, and the employee is not performing accordingly, this may be justification for reducing the employee’s pay. Particularly if the provision states a review of pay as part of the annual performance review process.


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