vikal (executive) 06 July 2012

Performance bonus payable or not..death case..

Dear Sir,

One of my Family member was working as a Technician in a Sugar Company.He was extra ordinary & got a job offer from other company on higher package.The Employer offered the Employee a Performance cum retention bonus plan on 1 june 2011 under which the employer will pay 2 lacs to the Employee apart from his salary in next 3 years the payout being

1-30% of 2 lacs at the end of first year (ie 30 june 2012),

2-30% of 2 lacs at the end of second year(ie 30 june 2013)

3-40% of 2 lacs at the end of third year(ie 30 june 2014)

the employer imposed a condition in this offer that he would not disclose this offer to anyone & if the employee resigns from the company on or before 30 june 2014,the company will recover all the performance cum retention bonus advances.

The employee accepted this offer.The employee met with an accident while on a company work & expired in april 2012.

the employer paid the remaining wages & PF etc to deceased wife & never informed the Wife about any such Contract of Performance Cum retention Bonus to the Deceased Wife .The Wife accidently discovered the Agreement signed by the Employer in Deceased personal documents & was confirmed secretly by a HR person that such a offer was made to deceased.

My question is:

1-If any bonus is payable to deceased wife by employer under terms & conditions of Contract?

2-If yes ,then whether it is 30% of 2 lacs or Proportionate of 2 lacs taking the period he served from 1 june 2011 till his date of death & divided by 36 months

3-If the whole Bonus of Rs 2 lacs is payable to him as the absence of Death Clause had made the things positive/Favourable for the Employee

4-If even a part of bonus was payable & the employer kept Silent on the issue of payment of that part to deceased's wife & didn't even inform the Deceased's wife,if it is a Criminal offence

5-If it is a criminal offence ,then if a FIR can be registered taking that Contract paper as evidence & under what sections of IPC.

I hope i will get a proper guidance so that the Deceased Employee's wife may get justice.

Kind Regards

Vikal Kumar

Reply Follow

2 Replies

Kumar Doab (FIN) 07 July 2012

It is a fact that the offer was made in writing and accepted in writing to retain the competent employee.

The employee would have been eligible for the amount had he completed the tenure as expressed in the offer.

The employer may on his own pay the full amount or may offer to pay proportionate amount.

Remain amiable and approach the employer. Employer may not want bad publicity.

Has the employer arranged any compensation due to death on duty?

V. VASUDEVAN (LEGAL COUNSEL) 07 July 2012

Under the Payment of Wages Act, the right to all pending wages of the deceased employee will devolve on his nominee/legal heir and she can claim. However, Performance/Retention bonus - the performance quotient of

the total bonus has to be identified for claim. Please write an application by the deceased to the CEO/Managing Director of the Company and if no proper response, lodge a complaint with the Labour Inspector under the PW Act.

Main question is: IF the employee died of accident arising in the course of employment - did his wife get the compensation under the Employees' Compensation Act (earlier known as Workmen Compnesation Act - the benefits are extended to an employee as well under the new Act).

Also under the EPF Scheme, the legal heirs will be entitled to EDLI insurance money and the widow will be entitled

to widow pension - considerable relief for life time. Please check and avail the benefits.

Vasudevan