Leaving Before One Year: Do I Have to Repay My Joining Bonus?

I joined a company in Nov 2011, and at the time of joining, I was offered a joining bonus. The bonus clause mentioned, "Rs X (recoverable in case the employee decides to leave before completing one year)." I have a 2-month notice period. I'm planning to resign in mid-Oct 2012, and the last date of working will be Dec 15, 2012. Technically speaking, I would have completed 1 year during my notice period. Do I still need to pay the joining bonus?

Regards,
Ajay

Ah! The nuances of the language are very deceptive and can be used to suit both parties. I have read somewhere that he is no lawyer who can't fight the case from both sides!

You believe that you are in the clear because you would have served for more than one year in the company and hence you should not be made to pay back the joining bonus.

But the argument from the company will be, and here I am going by the language you have used - "recoverable in case the employee decides to leave before completing one year."

Now the key word here is "decides."

Q. When did you "decide" to leave the company?

A. When you gave your resignation. Why? Because you first decided to leave the company and then gave your resignation.

So you gotta pay the joining bonus if you resign before completing one year.

That is why one must always make decisions taking into account all possibilities and leave absolutely no room for any personal interpretations.

I'd advise that you quit after Nov 12; then you would be completely in the clear.

Otherwise, it can be anybody's game!

Wow. You made an innocuous-looking topic more intriguing by your subtle ability to read the fine print, which, in fact, is a fine skill. I admire it. You have very aptly said that he is no lawyer who does not fight the case from both sides. Now, my interpretation is that the word "decides" cannot be read in isolation but shall be read in conjunction with the other words that followed it so as to give full meaning to the clause. Thus, the word "decides" has to be read in conjunction with the words "to leave before completing one year" to make the clause compatible with the clause on the joining bonus. The word "decides" thus needs to be related to the point of time at which Mr. Ajay leaves the company's service.

The clause says that the joining bonus is recoverable if an employee "decides to leave before completing one year." Though Mr. Ajay decided on 15th October 12, he never decided to leave the company before completing one year. He decided to leave the company after completing one year. Therefore, Mr. Ajay does not attract the debar contained in the clause and is entitled to the joining bonus since he is leaving on 15th December after completing one year. These are my humble submissions on behalf of Ajay.

Regards,
B. Saikumar
Mumbai

I think that you have made an equally compelling argument in favor of someone who resigns before completing one year of service and actually leaves the company after completing one year because of the notice period. The argument you have given is very strong when one reads "decides" in conjunction with the words "to leave before completing one year."

However, I'd still say that the resignation should be given after completing one year. The reason is that both your and my interpretation are from two opposing sides - mine would suit the employer and yours would suit the employee.

In any final settlement, the employer has the upper hand because of the salary which is paid after the month is over, plus other accumulated benefits which may be given on final settlement.

Now if the employer takes the interpretation given by me, the employee stands to lose. The employee will have no way to recover the money except taking a legal recourse which we all know is both time-consuming and costly with no guarantee that the decision will be favorable.

So why take that chance?

I have gone through various comments. My perspective is that the word "decide" does not take effect on the day of resignation. This is because, in other cases, the employee will not get relieved on the same day he submits resignation as he has to comply with the notice period. Hence, the date for calculating one year of service has to include the notice period. However, as shared by others, it is worthwhile to complete a year and then submit resignation to avoid the wrath of the employer.

Regards.

A really 'fine' way of interpretation with a subtle play of the English language. This reminds me of a saying in Telugu, which translates into: 'He is capable of plucking feathers from an egg's shell' 

No wonder so many advocates thrive and flourish  --- no pun intended, please.

Considerations Beyond Legal Aspects

Coming to the issue mentioned by Ajay, there will have to be a few more aspects that he needs to consider apart from the legal ones, while the company may be able to afford to focus on just the legal aspects of the issue. And that's the aspect of 'time' and 'effort'.

In a nutshell, I would suggest he keep the worst-case scenario in mind while making such decisions — sort of 'What if' conditions. If the company does indeed want to insist on the refund of the joining bonus or adopt the legal path, then does Ajay have that kind of time to focus on the case — in addition to the lawyer fees and the effort it takes to see the case through till the end? Would he be able to keep his focus on his new job, wherever he joins, with such issues in his mind?

I don't think this is a question of 'right' or 'wrong' at all — it's more a question of 'priorities' and 'possibilities/probabilities'.

Given that we are talking of just about a month's period before Ajay can resign without hassles, it may be worth waiting until Nov 2012.

And saswatabanerjee — I guess you need to thank CiteHR for giving you such a learning experience 

Regards,
TS

If we read the interpretation as stated by Sai Kumar, which I'm sure many would agree with me is the correct reply to the query posted, and refer to Sanjeev's wording that the employee has the upper hand—my dear friend, we are in a country governed by a rule book. We have courts to address harassment by an employer, and my viewpoint is that as the person has completed one year from the date of joining, he will not be charged back for the joining bonus.