Labour Law & Hr Consultant
Recruitment/talent Acquisition, Career Counselling

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Dear All,
My name is Suresh Working as a HR in
There is an issue with old employee who worked for only 3 months in manager cadre. the thing is in our company we pay two kinds of salary one is variable salary another is fixed salary
the issue is as per the fixed salary norms we have settled his full and final things without holding anything after his termination but variable salary/incentives we denied pay due lack of performance and discrepancies in his department which he was heading but now he has complained to districts labour officer about the same . labour officer called me and asked me the same so explained him the situation due to non performance we have not paid him the variable salary then officer said ok better sort out at your end. now the employee is telling that he will give a written complaint to the labour officer if we are not paying his variable
can anybody suggest me what action can a company take or how we can deal with this very issue.

From India, Bangalore
As per my own understanding salary means the total remuneration received by the employee upon his performance of the usual work allotted to him as per the terms of the contract of employment whether implied or express. Incentive is something incremental and variable in respect of individuals according to the additional performance over and above the usual norms. For example, if an employee avails of authorised leave in a month, certainly his performance would be lower than that of another with full attendance in the same month. Therfore, splitting up the normal salary fixed in the contract of employment into fixed and variable does not seem to me a good HR practice though unfortunately it is followed by many employers in wage hike. Though the dispute is beyond the jurisdiction of employment laws applicable to workmen, it is better to settle the issue amicably for such a situation can arise in the case of the questioner himself.
From India, Salem
Hello Suresh,
Further to what Umakanthan mentioned, pl note that many Companies have this practice of splitting the CTC into Fixed & Variable components.
While there's nothing really wrong to adopt this model in these days of cut-throat competition, NOT many companies have the Policy/Rules clearly laid-out on what CONSTITUTES the Variable & what FACTORS effect the Payout [many IT Companies.....including top-notch ones....never pay the FULL variable component @ the end of the year, but can justify such lower payouts as they have clear norms spelt-out & employees too don't, usually, crib as they are aware of the guidelines].
In your case, looks like your Company doesn't have such a practice & hence this manager is able to take advantage of the loop-hole.
Better talk to him arrive @ a via-media solution. That would be better than allowing the issue to drag-on.
And also frame the broad guidelines about the Variable Salary Policy--so that you preempt a repeat of such situations.
All the Best.

From India, Hyderabad
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