Hi I have resigned from a company almost a year ago & my employer has now sent a legal notice asking me to repay the bonus paid on pro-rata basis. Is it legally tenable? Please advise.
From India
From India
Dear Jeyavardhan,
You could have complete information. Please confirm:
a) Your Date of Joining the company
b) Your Last Working Day in the company
c) When the bonus was disbursed and for what financial year
d) In the letter that is issued to you, has the company mentioned a clause under the provisions of which the recovery process has been initiated
As per the Payment of Bonus Act, 1965 "An employee is entitled to be paid by his employer a bonus in an accounting year subjected to the condition that he/she has worked for not less than 30 working days of that year."
We need to find out why the disbursement of bonus does not fit into the above definition. Secondly, I have attached pdf copy of the Payment of Bonus Act, 1965. Go through the act and find out whether the notice contravenes with any clause of the this act.
Thanks,
Dinesh Divekar
From India, Bangalore
7855You could have complete information. Please confirm:
a) Your Date of Joining the company
b) Your Last Working Day in the company
c) When the bonus was disbursed and for what financial year
d) In the letter that is issued to you, has the company mentioned a clause under the provisions of which the recovery process has been initiated
As per the Payment of Bonus Act, 1965 "An employee is entitled to be paid by his employer a bonus in an accounting year subjected to the condition that he/she has worked for not less than 30 working days of that year."
We need to find out why the disbursement of bonus does not fit into the above definition. Secondly, I have attached pdf copy of the Payment of Bonus Act, 1965. Go through the act and find out whether the notice contravenes with any clause of the this act.
Thanks,
Dinesh Divekar
From India, Bangalore
Thanks Dinesh. My case is different since it does not fall under the bonus act. A part of my CTC is designated as a variable component & paid as perfoirmance bonus. Of this variable component, some percentage is paid on a pro-rata monthly basis. The company wants to recover this money stating that I did not complete 12 months. My argument is, I served for 9 & half months & the monthly bonus was paid because I was performing. Is it legally tenable to recover money paid to an employee under the head bonus. let me call you as well.
jeyavardhan
9791010987
From India
jeyavardhan
9791010987
From India
Dear Jeyavardhan,
In your second post also you have not given complete information. Please give reply to point (a) and (b) above. Secondly, for what period the company is asking for the refund of the bonus? Why are you wary of mentioning the exact details? Tenability of their claim needs to be assessed under the provisions of payment of Wages Act and clauses mentioned in your appointment letter. Further please mention type of industry you worked in. This will help us to know whether your company was covered under Factory Act or Shops and Establishment Act.
Thanks,
Dinesh Divekar
From India, Bangalore
In your second post also you have not given complete information. Please give reply to point (a) and (b) above. Secondly, for what period the company is asking for the refund of the bonus? Why are you wary of mentioning the exact details? Tenability of their claim needs to be assessed under the provisions of payment of Wages Act and clauses mentioned in your appointment letter. Further please mention type of industry you worked in. This will help us to know whether your company was covered under Factory Act or Shops and Establishment Act.
Thanks,
Dinesh Divekar
From India, Bangalore
Community Support and Knowledge-base on business, career and organisational prospects and issues - Register and Log In to CiteHR and post your query, download formats and be part of a fostered community of professionals.
Amendment to Payment of Bonus Act 2015.jpg
Bonus act amendment gazette copy.pdf
Bonus-amendment _206.doc