Piyush Verma (None) 07 October 2013

Changing terms of severance package after leaving company

Dear Sir,

I need guidance in handling my case. Details about the case are as under:

I joined a company and was later on transferred to its wholly owned subsidiary (PF account was also changed). Subsequently, the parent company (which I had initially joined) decided to close its subsidiary. We were, however, given option either to take some role in parent company or opt for severance package. I opted for severance package.

The terms mentioned in the severance package stated that I shall be getting few months' salary, leave encashment, etc. It also had one more component - Retention bonus. It was written in the terms that retention bonus, as applicable, shall be paid to you. This communication was on company letter head which was signed by HR head of the company (parent company).

I sought clarification on how much retention bonus will be paid to me. On this, there was a mail communication from HR that I shall be getting entire amount of retention bonus (amount accrued after 3 years of service).

I got full and final settlement amount a month after my resignation but it did not had retention bonus amount. When I took this up with HR, I was told that they have missed paying my retention bonus and I shall be paid on pro-rata basis.

Its more than 2 months and I have not got any payment from the company. Also, the company has deducted tax on full and final settlement amount without my consent. They are saying that it is mandatory for them to deduct tax even if I am not working for remaining financial year.

I would request you to kindly help me in this matter.

I have been sending mails but there is no response till now. What should be the next step in getting this resolved?

Regards,

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1 Replies

Kumar Doab (FIN) 07 October 2013

It is felt that:

The deductor (employer) has to deduct TDS. You could have supplied your tax planning/tax saving details under various sections 80C, 80D, 80G etc………………..for tax relief.

Now you may obtain Form16 and file ITR.

You may claim that company has already clarified that ‘Retention Bonus’ is ‘amount accrued after 3 years of service’………………….and relate the amounts payable to you as explained in appointment letter, CTC sheet, policy on ‘Retention Bonus’, standing orders etc………………

Have you accepted the FNF statement in writing?

If not, claim that FNF statement does not include ‘Retention Bonus’ and hence it is not accepted.

If yes highlight the various communications you have received on ‘Retention Bonus’ and claim that you are withdrawing the acceptance and the pending amounts should be disbursed to you at once.

Based on the reply you may proceed further.

Employee can approach:

Lawyer/law firm: legal Notice can drill sense into the heads.

Trade Unions.

Inspector under Shops and Commercial Establishments for payment of wages/settlements upon separation.

Inspector under Payment of Wages act (applicable to all employees drawing wages as per def. of wages in the act up to Rs.18000/pm)

2. Definitions………3*[(vi) "wages" means………………..(d) any sum which by reason of the termination of employment of the person employed is payable under any law, contract or instrument which provides for the payment of such sum, whether with or without deductions, but does not provide for the time within which the payment is to be made;

Civil Court: The limitation period may be up to 3Y in your case.

There are threads to indicate employees have been contemplating to lodge criminal complaint under sec 406/420………………………..and approach employers as Creditors treating the employer as Debtor and unpaid wages as debt on employer…………….

https://www.lawyersclubindia.com/forum/details.asp?mod_id=72011&offset=1#.UNRXofLZ1JI

Discussion > Labour & Service Law > Disputes > Delay in full and final settlement payment