Can I Take Legal Action If My Employer Denies My Earned Bonus After Resignation?

Hi, I am working in a private company and was eligible for a performance bonus for the September 2016 to September 2017 cycle. I received a letter from the company stating that my bonus would be 100% of my monthly salary. However, I have now submitted my resignation in January 2018 and am serving my notice period.

The company is now stating that they will not provide the performance bonus because I have resigned. Yet, this bonus was intended for the period from September 2016 to September 2017.

Is it possible to file a case against the company for this issue?

Is this a valid case to pursue, considering that private companies sometimes engage in such practices? Please advise.

Yes, you have a rightful claim under the Payment of Bonus Act 1965. You can lodge the claim before the local Labour Officer with full facts and supporting documents and seek his intervention. The Act does not authorize non-payment of bonus to employees who have resigned, as bonus is deferred wages.

I think that the issue is non-payment of performance bonus under the contract of employment, not the statutory bonus under the Payment of Bonus Act, 1965. Additionally, the user has not mentioned anything about his monthly gross salary as well as his employment capacity.

I am working as a senior software engineer in a private company, and my monthly salary is 60000. So, I was expecting a bonus of 60000. This company always delays its bonus. It is a performance bonus that is a part of the CTC and depends on the person's grade.

My grade was the highest. I was supposed to get this performance bonus in January 2018, but the performance was evaluated for the cycle from September 2016 to September 2017. Please let me know what information I missed here!

I presume a performance bonus was part of the benefits offered to you in your job offer letter.

You may have a legal case against him for failing to uphold his part of the contract, wherein the performance bonus was offered as part of your pay package. If all other attempts have failed, consider sending him a detailed legal notice.

What you have just provided is relevant information to your queries. The quantum of your monthly salary disentitles you from receiving a bonus under the PB Act, 1965 or from filing a claim under the Payment of Wages Act, 1936. Your salary also indicates positively that you must be a software engineer of senior cadre with supervisory responsibilities. If my presumption is fortunately wrong, you can file a claim under section 33C(2) of the Industrial Disputes Act, 1947 before the Labor Court of the area. In such a situation, the only option before you is filing a suit for breach of contract as well as recovery of the amount in a Civil Court. It is advisable to seek the advice of a Civil Lawyer.

Mr. Uma,

If the querist had indicated his designation and status in the company, the answer would have been easier. Many a querist fails to provide a correct and full description of their job, nature, position, etc., leaving posters guessing and answering. Some guidelines to this effect need to be made available whenever anyone chooses to post a query. The present case appears to be a breach of job contract terms, and a civil suit is the way out if not resolved earlier.

Dear Friend, the members of the forum have already replied to your query based on your posting and the additional facts you provided. Your claim is for the Performance Linked Bonus for the year 2016-17, which was not paid to you. You have already resigned and are now questioning something that is not part of wages or bonus but rather some contractual consideration based on your performance during the year or cycle followed by your establishment.

To comment on or suggest any remedy, we need the complete text of your appointment letter or contracts. It is, therefore, advised that you seek the help of a law consultant who deals with labor-related issues for the next course of action.

Alternatively, you can request your employer in writing to adjust the balance of the "period of Notice" against the sum due for the Performance Bonus, and "x" date will be your last working date. By doing so, the outstanding amount shall be considered settled, and a reply from your employer would help in determining future courses of action.

Please let me know if you need further assistance or clarification.

I am living in Gurgaon, and the company is also in Gurgaon. Please let me know how I can send them a notice. Is there any lawyer I can contact? Please let me know so that I can explain my case to him directly.

Thanks a lot for all the answers.

Policy on Performance Bonus During Notice Period

They have given me a policy which states that at the time of payout, if an employee is on a notice period, the company is not liable to provide a performance bonus. In this case, the bonus cycle was from September 2016 to September 2017, but I submitted my resignation in January 2018. They are asserting that this policy is applicable to me, and they are not obligated to provide any bonus.

Legality of the Policy

Is it legal for a company to enforce this type of policy? In this scenario, they are never obligated to make any payments, and no one can file a complaint in a labor court.

Please help and also provide any information on lawyers if possible.