Facing Unpaid Incentives After Resignation: What Can I Do About It?

I have resigned from my company in Nov '14, and now my company is not paying my incentive from 2008 until Nov '14, stating that as per the policy, the employee has to be in the company during the payment of the incentive. Therefore, employees either on notice period or who have resigned will not receive the incentive. I didn't receive the incentive for the last 6 years. Please suggest what to do.

Regards,
Srikant Prasad

Incentive as Additional Income

Incentive is an additional income or monetary compensation payable to an employee based on their extra work over and above the normal work as per the Incentive Scheme in vogue. Therefore, it is an additional remuneration under the terms of employment as classified in clause (c) of Sec.2(vi) of the Payment of Wages Act, 1936, defining the term "wages." As such, equity and logic demand its disbursement by the employer to the employee as soon as it becomes payable.

Termination and Incentive Payment

The likely termination of the contract of employment at the instance of the employee serving the notice period following their proposed resignation, or actual termination of the employment on resignation, are irrelevant reasons or extraneous considerations for its denial. If it is the policy of the organization, it would not stand the test of law. Therefore, if you are a "workman" as per Sec.2(s) of the Industrial Disputes Act, 1947, you can file a claim under section 33C(2) of the Act before the Labour Court having jurisdiction.

However, your statement that you did not receive it continuously for six years seems to be unusual and unexplained.

Dear Mr. Srikant,

In your appointment, is it mentioned that you will be paid an incentive? You have accepted that you were in employment from 2008 to November 2014. During your employment, you were not paid an incentive. You did not make any claims during your employment. Even after leaving, you have not made a claim. Making a claim for the period 2008 to 2014 in 2017 without any valid reason for belated claim does not hold good in the eyes of the law. Please do not waste your time on such matters.

I am curious as to why you were not paid the incentive each year from 2008 to 2014.

I have not heard of any incentive scheme where the incentive is paid after 5 years.