Understanding Variable Pay Impact on Resignation in CTC Structures

Hi All,

In my CTC, salary variable pay is included, and it is mentioned in the offer letter that the variable pay amount will be paid after the financial year ends. However, I resigned from the company before the financial year ended, in November. Now, the HR of the company is stating that they will not provide the variable pay because I resigned before the financial year's end. They circulated a circular stating, "variable pay amount is automatically forfeited in case you discontinue your services from the company." We did not accept the circular and returned it.

Please advise me on how to claim the variable pay amount.

Thanks,
Ani

In case the decision was given by your management and a circular was issued much before you resigned, then you might have to accept this as a policy of the company. Since such amendments keep happening in companies, employees cannot have much say in this unless they are part of management.

On the other hand, if the circular was issued after you have resigned, then you are eligible to receive your variable pay prorated till your last day of work.

Dear Anil,

This Variable Pay is fixed based on your previous performance and is paid to motivate you for further better performance. Once you have resigned, the company does not need to motivate you for your future performance. Hence, you cannot claim the same.

This is my contention. Let us expect the opinions/comments from our learned members on this subject.

Dear Anil,

This is up to your company whether they release your variable pay/bonus to you after your resignation. But in a normal case, companies don't.

Now, again, the company has the right to issue circulars and amendments in policy at any time, whether staff accepts it or not. However, staff can't deny it; otherwise, this will be sufficient cause to dismiss them on disciplinary grounds.

Kindly look ahead.

Regards,
Nishant