Employer Denied Previous Year Bonus - CiteHR
Sr. Hr Team Member
Korgaonkar K A
Ashutosh Thakre
Hr Professional
+3 Others

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I have left my previous organization in mar 2014. Bonus payout of previous year happened after I left. HR says I am not eligible for bonus as it is clearly written in contract letter that it is management abosulute discretion to decide the eligibility.
However in my compensation details of last year appraisal ,it is clearly mentioned that bonus % will be decided based on both employee and employer performance. No where it is mentioned that in what condition employee is not eligible for the bonus.
My performance was always good and appreciated by management.Also all the employees of the organisation got bonus in the month of Apr 2014. that shows companies performance is also good.
Since HR has clearly denied my request. My queries to experts are:
1.Since my basic salary is 20 k per month. Am I eligible for bonus?
2.Can I take legal help or go to file a legal case against them?

Dear Sumedha ji,
The bonus you are referring to is not a bonus under any statute. It is a performance bonus as per the contract between you and your employer. In my view, since this bonus is absolute discretion of management, the management would justify not to pay you, you being not in employment on the day of its' disbursement.

Many Thanks Keshav Ji.
HR is justifying it that I was not on payroll the day bonus payout is done.
Does 'managment absolute descrition' written in the contract is enough to justify their decision when in compensation details it is clearly written that bonus will be paid based on employee and employer's performance.
Also this is previous year bonus during which I was part of the organisation. Ideally it should have been paid in last financial year but if delay happened from organisation side. Is it a valid reason to deny bonus?

Please clarify the following points:
Are you asking about performance based incentive(Bonus) based on balance score card which is applicable for all the management staff those who have contributed /rolls of the company in the previous financial year. In that case management would consider the resigned employees also if they are generous OR
Bonus payable as per Bonus Act. In that case,an employee is eligible to get Bonus if he has served in the company more than 30 days in a financial year and his basic salary is less than Rs.10,000/- and the bonusable earnings would be Rs.3500/-per month.

Dear Sumedha ji,
This is complete Dada Girit. If it is payable under the written agreement or under the practice the company would have make you the Performance Bonus paid on pro rata basis.
It depends on the attitude of the Company.
Dont worry leave it to God for best judgement.
G K Sarkar

This is performance based incentive (mentioned as a bonus in contract letter). I know this does not come under bonus act as my Basic is more than 10K.
But HR says as per contract clause ''Bonus payout is absolute management descrition". So I am not eligible for bonus. However compensation details section says Bonus % is decided based on both employee and employer's performance.
Since HR has already denied for bonus payout, should I go and take labour court help?

Dear Sumedha,
Performance Pay to be paid or not (even if mentioned in the CTC) is upon the discretion of the management. The performance pay payout can happen anytime and not necessarily in the same financial year.
Legally if they have paid bonus you can by law claim on Rs. 3,500/-. Also be clear that Bonus and Performance Pay (Bonus) are 2 different payments. So do not substitute with one another.
You can only speak with the Management higher ups, as the HR has already rejected the same sighting Management Decision.
Ashutosh Thakre

hi you can file as per your appointment letter term and condition.
Generally performance based incentive would be paid to employees those who are in current rolls of the organisation at that time of disbursement. In certain companies they allow this for ex-employees also who has resigned or retired from services but have served in the previous financial year . You cannot claim this under labour court since you can not be called as affected labour. Just because it is mentioned in the remuneration package as cost to company you cannot claim rightfully.
Dear Sumendra,
I do agree with Ashutosh's statement, as performance based incentive is absolutely management discretion. It would be paid at any time for those employee who were working while it is been declared by the management and if you had left the organization then you are not eligible for payment of incentive.
Now secondly there is no eligibility or applicability for payment of performance based incentive, since it can be paid for any employee whether he is contractual, onroll or earning wages below and above Rs. 10000/- .

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