Hi, Just wanted to ask.. do we pay bonus to an employee who is serving his notice period. Regards, Kanupriya
From India, Ahmadabad
Sr. Hr Advisor / Director
Consultancy_hr & Ir
Recruitment, People Management

hai Kanupriya...
A common issue that arises on termination is whether an employee is entitled to all or a portion of a bonus or incentive pay that they claim to have earned. Whether or not such a bonus payment will be considered wages, and therefore owed to the employee, will depend on the specific terms of the employment contract.
True discretionary bonuses will generally not be payable. However, if the terms of the employment contract do not clearly provide for sole discretion of the employer, or do not specify that a bonus is only earned if the employee works the entire year for which the bonus is earned, a terminated employee may be able to claim for a bonus payment upon termination.
see this
http://go2hr.ca <link updated to site home>

From India, Kakinada

If the bonus you are referring to, is bonus under the Payment of Bonus Act 1965 and if the concerned employee is covered under the said act, then one must remember that bonus for the earlier financial year is required to be paid within 240 from the completion of the financial year in respect of which the bonus is to be paid. (That is to say Bonus for 2006-2007 has to be paid before 30th November 2007)

Based on your query, kindly note the following:

1) If the concerned employee was employed for a period in excess of 30 days, he will have to be paid the declared bonus even if he is presently serving the notice period.

2) having worked during the concerned financial year, as above said and even if he had actually left employment, the employer is bound to be pay declard bonus since the concerned employee was employed during the financial year.

In both these cases (because the law applies) the terms & conditions of employment or any other agreement between the employer and the employee (even it exists) does not matter as "parties cannot contract out of law" anyway! But if the employee was not covered under the act then my response will be different than the present one!

Trust the matter is clear!



October 20, 2007

From India, Pune
Bonus is distributed against the performance and past contribution of an organization's members. Hence, it's better to include an employee who has resinged from the service during the time of Bonus distribution, as the resigned staff also has contributed to the current output of the company.
Anyhow, it depends upon the company's policy also how they are generous in their monetory payment.
+971 55 790 1111
Abu Dhabi - UAE

Hello All,

In my company we get Statutory Bonus(performance bonus) 2 times in a year October and April. My service will be completed on April. So wanted to know am i eligible for the bonus for the term (October 2016 to April 2017)? This bonus is a part of my CTC. But my HR manger is denying to pay me the bonus as i have resigned from the company and he is not allowing to give the bonus to the employee who are on the notice period.

If i am eligible, what statement or action can i take to get my bonus? Please everyone help me with this problem.

Below contract was singed by my company:

We inform you that the payment made towards the performance Bonus/Incentive each year in reference to the Variable Performance Bonus mentioned on your employment contract is calculated considering the minimum limits as indicated under the Payment of Bonus Act -1965(i.e Statutory Bonus).

Payment made under the variable Performance Bonus scheme will be in lieu of the statutory bonus payment under the Payment of Bonus Act 1965. The company will pay the employee the statutory bonus under the Payment of bonus 1965 or the Variable Performance Bonus,whichever is higher.

From India, Pune

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