(Guest)

Performance bonus and resignation

I joined a newly formed private company (Indian arm of a foreign company) in November 2013. I was the first person to join and my reporting was to a VP who was part of the foreign arm. I was responsible for building the complete technical team in India. Almost all administrative, finance and HR related matters were handled by the remote foreign teams.

My offer letter states that I am entitled for a performance bonus of X amount on the condition that I am on the payroll for 6 months.The bonus is linked to individual performance and company performance and at management discretion.

During the year, my technical contributions were appreciated. In addition, I also assisted in many of the setup activities which were also appreciated. As per the company appraisal cycle, I also submitted my performance review in July 2014 for which I did not receive any feedback. Even after August passed there was no discussion on my appraisal. Neither was any bonus discussed for India employees.

Frustrated with the lack of a proper strategy and plan for India operations, I - along with few other senior employees - submitted my resignation in September with a notice period of 1 month as per my offer letter. Few days after my resignation but before my last day at work, the company declared bonus for all employees and gave 100% bonus for all. I was under the impression that my bonus would be part of the final settlement but it was not included. Neither were the others but that was OK since they had not completed 6 months as per the offer letter.

When I contacted HR regarding non-payment of bonus, I got a response that it is not their policy in the foreign arm to pay bonus for employees who have resigned. I replied that this rule is not mentioned in the offer letter or any of the other employment policies that were provided to the employees. But I never received any reply to that email.

Is the company liable to pay me the performance bonus? Can the company deny the bonus stating the above unwritten rule? Even though no one from the management ever communicated verbally or in writing that my performance was below par, can they state that my performance was below par and hence no bonus was paid?

In case the company is not willing to pay, what are my options?

Thanks in advance.

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6 Replies

Kumar Doab (FIN) 30 November 2014

1. Hope you have the copy of appraisal submitted by you in July 2014..............and it describes your achievements..

The employer on its own or thru its bosses is duty bound to conduct the appraisal in time and deliver the promise made by it in service conditions and disburse the fruit of labor in time...................

Your appraisal was delayed..........and no written communication was ever supplied to you...........for which you are not at fault..........

2. The performance bonus is part of your service conditions/promise by the employer.....

3. The bonus announced by the company might not have stated that it is not applicable to the employees that have submitted notice of resignation..................

Did the company issue acknowledgment/acceptance of resignation?

The bonus is part of service conditions firmed up with you and reduced in the form of appointment letter and as a consequence of appraisal submitted by you it has been announced.....

4. HR is not your employer and it is just another employee in the company that has a duty to process and disburse in time and should not commit falsification of record........

You have in your custody the appreciations and executions,achievements details...........

You may show all docs on record to an able Labor Law Consultant/Service Maters lawyer and give inputs in person.The lawyer that has examined the details and inputs can advice you the best.......

Your lawyer may opine that you can file complaint u/s 406,420 and winding up petition.............

You may understand the merits from your lawyer and proceed further as deemed fit to you at your end.

1 Like

T. Kalaiselvan, Advocate (Advocate) 30 November 2014

Thus, feeling aggrieved by the decision of management to deny you the bonus and if you strongly feel that you deserve and are entitled to the bonus, you may write to the company's top management abroad with a copy to the management head in India, venting out your grievances, if you do not get proper response or no fruitful result, you may adopt legal recourse by taking the help of a local service law practising lawyer for further action.

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(Guest)

Thanks Mr. Kumar & Mr. Kalaiselvan for your reply.

To answer the questions you raised.

Yes, I have the appraisal documents that I have submitted.
The conditions for bonus eligibility in the offer letter only mention 6 months of service and does not mention anything about employees in their notice period.
The company did not reply to the resignation letter I sent but acknowledge the last date of working in a separate email.
I have already communicated to top management but there has been no proper response.

Does the lawyer I consult have to be local? Is it possible to directly approach a local labour inspector with the details of the case?

Regards,

Tushar.

T. Kalaiselvan, Advocate (Advocate) 01 December 2014

You are welcome for your appreciations. You can dispense with service of a lawyer for initiating legal action provided you are aware of legal technical points and able to draft a complaint to the labor officer by putting your grievances chronologically and seek relief as per law. There is no harm in approaching the local labor inspector directly.

Kumar Doab (FIN) 02 December 2014

You can approach Labor Inspector if you are covered by the def. of Workman as in ID Act, 'Emoloyee' as in Shops and Commercial Establishment Act.... Employees /Trade unions can represent you..... A lawyer/law firm can represent you. You can appear in person too...

ashishmangla 04 March 2015

I also has the same case in Same company where Tushar T was working. Can you refer a Labour Court / Service Matter Lawyer in Bangalore who can file our case in front of Labour Inspector.

Thanks in advance.