Resigned and Wondering: Will I Get My Bonus in the Final Settlement?

Hello, In my offer letter, I have a minimum percentage as a bonus off my fixed CTC, payable should I meet the minimum performance parameters. The appraisal in my organization takes into account my performance from January to December. It is during December that my ratings are provided to HR.

I have now resigned and am serving my notice period. Would the bonus based on my ratings be given to me in my full and final settlement?

Any guidance would be helpful.

Regards, Eddie

It is not clear whether the bonus shown in CTC is a statutory bonus under the Bonus Act or a performance bonus paid under some contract or agreement.

Regards,
B. Saikumar
Mumbai

Hello Sir, there is no mention of the Bonus Act; all that is mentioned is that it's a performance bonus. However, there is a mention of the following: "If applicable, payment of discretionary bonus / P4P mentioned in your employment agreement will be sufficient for discharge of any of your claims to the company for a Bonus (including but not limited to a minimum bonus required to be paid by the Company as per any statutory requirements)."

Regards,
Eddie

The clause particularly referring to the words "P4P mentioned in your employment agreement will be sufficient discharge of any of your claims to the company for bonus" is still not clear to me. However, the general position on your right to a bonus will be as follows:

1) If it is merely a performance bonus and the payment of such bonus is subject to certain conditions laid down in your letter of appointment/contract/agreement, such as fulfilling certain performance parameters or completing a specified tenure in the company, then such bonus becomes payable to you only upon fulfilling such conditions but not otherwise.

2) If you are eligible for a bonus under the Bonus Act, that right cannot be taken away from you even by way of incorporating any clause in the agreement to that effect.

Regards,
B. Saikumar
Mumbai

Hello Sir, Thanks for the clarification. I took a good second look at my previous offer letter and the most recent (2012) appraisal letter. There is no mention of the Bonus Act and neither a statement mentioning that "the employee needs to be on the payroll of the company to get a bonus." What it does contain is "the bonus is payable at the sole discretion of the management of the Company..."

Regards,

Please go through the terms of appointment and see whether the company has laid down conditions under which they can exercise their discretion to pay or refuse a bonus.

Regards,
B. Saikumar
HR & Labour Law Advisor
Mumbai