Need clarification on notice period clause
Querist :
Anonymous
(Querist) 18 July 2022
This query is : Open
We have following clause mentioned in offer letter for RSUs or bonus:
"For purposes of this document, Participant's employment or service will be considered terminated as of the date Participant is no longer actively providing services to the Company or its Affiliates Unless otherwise determined by the Company or as set forth in a written agreement between Participant and the Company, Participant's right to vest in the Plan will terminate as of the Termination Date.
The Termination Date will not be extended by any notice period (e.g., Participant's period of service would not include any contractual notice period or any period of "garden leave" or similar period mandated under employment or other laws in the jurisdiction where Participant is employed or otherwise rendering services or the terms of Participant's employment or service agreement or other employment or offer letter (if any)."
Now the confusion is if the employee is getting RSU vested during notice period or about to get bonus during notice period then as per this clause can he get the bonus or will the RSU vest? we are confused with following particular statement:
"Participant's period of service would not include any contractual notice period or any period of "garden leave" or similar period mandated under employment or other laws in the jurisdiction
Now suppose employee is having 2 months notice period and he is supposed to get bonus in 2nd month of notice period what will happen as per the above clause? will he lose the bonus/RUSs? or he will get it as normal?
Thansks,
P. Venu
(Expert) 18 July 2022
Please post concise facts and the real problem, if any.
Dr J C Vashista
(Expert) 18 July 2022
Be brief and specific for consideration and obligation of experts.
Querist :
Anonymous
(Querist) 18 July 2022
Sorry if the question is too long and if i was not clear. here is what i wanted to know:
1. Our company has 2 months notice period.
2. It provides stocks(RSU) and bonus each year to its employees.
3. Now if an employee is serving his notice period then will he get the stocks and bonus? because we have following clause in our offer letter below:
"Participant's period of service would not include any contractual notice period or any period of "garden leave" or similar period mandated under employment or other laws in the jurisdiction
"
so what does it means notice period will not be counted in period of service?
kavksatyanarayana
(Expert) 19 July 2022
When giving the bonus, if an employee puts the essential service with a notice period, then only he is eligible for it.
Querist :
Anonymous
(Querist) 20 July 2022
Thanks for reply, in IT companies based on this clause, employees can get bonus even though they are on notice period right?
Dr J C Vashista
(Expert) 23 July 2022
Company rule 3 herein above has specifically declined stock and bonus for the non-participant employees i.e., leaving the company after notice period.
Querist :
Anonymous
(Querist) 23 July 2022
Thanks everyone for the replies. so as per rule 3, stock and bonus is declined after completing notice period right? but during notice period employees can get it? is my understanding is correct?
