Bonus - a case where bonus is carved out of existing ctc
Raj M B M S
(Querist) 25 April 2016
This query is : Resolved
Seeking eminent specialists in LAbour law to please look into this case and suggest / guide the approach for Bonus for employee :
1. An employee by name – VIJAY. CTC is already defined at the time of offer .
2. the CTC letter is issued to Vijay and he joins the company
3. The CTC of Vijay does not have bonus as a component.
4. Vijay completes 1 year in job (2015-16)
5. Govt declares introduction of Bonus to this category of employees, to which VIJAY belongs
6. Company decides to build in the component of Bonus by reworking the existing components ( Reduce the Special Allowance by 700 Rs per month and add that Rs 700 to Bonus component)
7. Net effect : VIJAY does not get any additional money as bonus for having worked year 2015-16. He instead gets his salary restructured and called as Bonus instead of special allowance
Is aforesaid circumstance tenable in the Court of Law, when it comes to consider Bonus payment.
Does it address the condition - What is a Bonus .. and can it be carved out of existing components of Salary or it should be an additional component given to employee for having done a job well in a year
Kumar Doab
(Expert) 25 April 2016
The employee has a good case.
Pay the bonus and close the matter.
The case may be viewed as a minor fraud.
CTC is nothing but annual/monthly pay package.
All amounts mentioned in it are promised amounts.
Even if employee is not eligible for statutory bonus if it is stated in CTC employee has a claim.
H.M.Patnaik
(Expert) 26 April 2016
CTC communicated at the time of joining the establishment can not be manipulated to accommodate any subsequent statutory amendment under payment of Gratuity Act as pointed out in the instant case. The employee concerned is eligible to get Bonus over and above CTC in the given circumstance.
Kumar Doab
(Expert) 26 April 2016
I concur with Expert Mr. H.M. Patnaik.
The Payment of Wages Act also lays down payment of 'any bonus'........
Raj M B M S
(Querist) 27 April 2016
First, my sincere thanks and indebtedness to the luminaries who have responded to my query. Your replies have more than delighted me and thank you so much Shri Kumar Doab, Shri Rajendra Goyal, Shri HM Patnaik for taking your valuable time out of busy scheds to revert. This i guess could be an eye opener for many companies who may unwittingly or otherwise be doing such transactions. I wish every one know this and interpret things right. Thank you once again. Much appreciate your reverts.
Kumar Doab
(Expert) 27 April 2016
You are welcome.
Share and spread awareness as much as you can.
Raj M B M S
(Querist) 28 April 2016
Yes Mr Kumar, I would surely do that. its our responsibility in fact
