Can we deny to pay Bonus and LTA if both are part of CTC and Fixed RS. 10000/- P.A

Dear Sir

Can we deny to any employee regarding his Bonus and LTA (Leave traveling allowance) if he resigns within his probation period, when both the Bonus and LTA are part of CTC and mentioned fixed both @ Rs. 10000/- P.A in the CTC.

Regards

Sanjeev Bansal Adv.

Dear Sanjeev,

A statement of CTC given along with the offer letter or appointment order of an employee cannot per se form part of the contract of employment unless it is specifically stated so and accepted by the employee. Even if it is to be treated as part and parcel of the contract, the conditions mentioned therein about any statutory payment cannot run counter to the provisions of the concerned law, if applicable.

Bonus is a payment made out to the person falling within the definition of the term ' employee' under the Payment of Bonus Act,1965 based on the performance of the establishment in every accounting year if the establishment is covered under the Act and the employee having actually worked for a minimum period of 30 days in the accounting year.

If statement of CTC is enclosed with letter of intent/appointment then company is liable to pay the same.
sumit

Bonus is a deferred wages and if the employee worked for minimum 30 days for the accounting year for which bonus will be paid - the employee will be eligible for the Bonus proportionately.

Now if it is gratuity payment, to my opinion the employee will not be eligible even if it is part of CTC (no legal sanction). CTC calculation is a management tool to control individual employee cost related to employment. Every payment is conditional. Suppose one employee was absent for the whole month and asking for salary when there is no leave due but mentioned in CTC - is illogical claim.

S K Bandyopadhyay ( WB, Howrah)
CEO-USD HR Solutions
+91 98310 81531
USD HR Solutions – To Strive towards excellence with effort and integrity

Bonus is mandatory as per provisions of the Payment of Bonus Act. However, LTA is not mandatory, it can be part of CTC. Only one can avail tax benefits as per IT rules.