Can I Claim My Bonus and Protect My Reference After Sudden Department Closure?

I worked for a company for 4 months, and the contract states that a variable bonus shall be paid quarterly based on performance. There is no mention of the bonus not being paid upon termination. The company pulled a trick by shutting down my department just two days before the second quarter. They emotionally blackmailed us, saying that we should not ask for anything if we want a good reference for our next job.

Question on Variable Bonus and Reference Check

My question is, can I ask for my variable bonus, and can HR spoil my reference check? There is no mention of the bonus not being paid upon termination. Additionally, in lieu of the notice period, they have only paid the basic salary as stated in the contract. However, we believe we are entitled to the full salary since they misled us into leaving due to their inability to manage the situation, as mentioned in their letter.

Since it is part of the appointment letter, "Notice in lieu of basic salary," no one can challenge the company. On humanitarian grounds, if the company wishes, it may pay you the gross salary as well.

You can always tell your next employer about the reason for separation, and during the reference check, they will verify the reason. HR should not damage an employee's reputation by giving a false reference check, as that's part of ethics.

Since your quarterly variable bonus is based on performance, a performance review needs to be conducted. In the absence of a performance appraisal, the company is not liable to pay the performance bonus. Please check the internal policy of the company, which is not part of the appointment letter. If there are any wordings mentioned that "any employee separated before the end of the quarter will not be paid the performance bonus for the said quarter," then the company will not pay. (It might be their practice.)

If you are correct, then don't depend on the 4-month reference check; explain the truth to your new employer.

Regards,
BrainLight HR Solutions

Thank you for the information. Our performance was purposely not made on time, and despite reminders, they did not meet our PACE as their shutdown was preplanned. The contract does not mention that payment will not be made if we leave before the quarter. Should we inquire about our bonus?

You have every right to ask for your bonus, and if your company denies it, you should send them a notice regarding the unpaid dues. In the case of PLB, assessment from the management is mandatory, and the employee should be informed about it. However, if no assessment is carried out, the employee is still eligible for the PLB.

I agree with BrainLight HR Solutions that in the case of termination, the basis of the CTC should be paid. I assume that the termination is not due to performance reasons but for any other cause.

Regards,
Ruchi