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Pankaj (software engineer )     02 January 2015

Company is not paying bonus and performance incentive amount

I have few question related to labour court and industrial dispute act:

1) Do I fall under workman as I am a software engineer and withdrawing salary more than Rs. 10,000?

2) If I cannot fall under "workman" then on which category I fall under?

3) Employer is saying that I worked in Software Company, so labour law is not applicable to you & I can't file a case under industrial dispute act, is it right?

4) Does bonus included in final CTC is a statutory bonus & is compulsory to pay it to employee after financial year, as I have completed financial year?

4) Can employer stop payment of bonus and performance incentive (Declared in CTC) by their policy?

 

Other points:

1) Here is the company bonus policy:

Bonus shall be paid as per bonus act. Bonus payment may be declared by the company each year around Diwali time. The bonus is based on company’s performance for the year ended 31th march. Bonus is not applicable to those persons no longer employed with the company at the time of payment of bonus. Taxability of bonus will be as per income tax rules.

2) Employer has not declared any bonus for the years 2011 and 2012 to anybody.

3) I have completed 2 financial years with employer and they are not ready to pay bonus and incentive amount as I’m not on company’s pay roll.

It will be helpful for me if anybody refer a similar kind of case, case no/location/document which has been won by employee? So it will be easy for me to win a case?

Employer salary data structure (CTC) given by employer signed by me and executive director of employer:

Designation

Sr. software development

Grade

Executive

 

Salary structure

Effective                  

Jun 2012

Fixed CTC per month

 

Basic

20000

House rent allowance

8000

Transport

800

Medical allowance

1250

Children education allowance

-

Life style allowance

11,750

Fixed CTC per month (A)

41,800

Fixed CTC per annum

 

Annualized pay (A*12)

501,600

Leave travel allowance

 

Bonus

20,000

Fixed CTC per month (B)

521,600

Annual performance incentive

-

Annual target (In lakh)

-

Potential Annual performance incentive (c)

60,000

Monthly reimbursements

 

Local travel allowance

N/A

Meal allowance

N/A

Mobile allowance

N/A

Potential monthly reimbursements (D)

 

Potential annual reimbursements (E=D*12)

-

 

 

Total annual CTC (B + C + E)

581,600

Monthly Deductions

 

Professional Tax

200

ESI charges

-

INCOME TAX

842

Total Monthly Deductions

1042

 

 Thanks in advance.  

 

 



Learning

 4 Replies

Kumar Doab (FIN)     02 January 2015

 

 

Other thread by the querist, posted about a year ago:

https://www.lawyersclubindia.com/forum/Full-and-final-settlement-amount-bonus-and-incentive--92963.asp#.VKauvaKUcqN

 

It is surprising that you are still entangled with HR/Line Managers.......and have not acted to approach either Lawful authorities or Employee’s/Trade Unions or Lawyer and court of law…….

 

1. Designation and remuneration alone does not decide. An able Labor Law Consultant may ask you a set of structured questions and may opine that you are covered.

The standing orders (certified/Model) might also be applicable.

 

 

2. Software/IT/ITeS Companies are covered by ( Name of the state) Shops and Commercial Establishments Act that was enacted to govern the service conditions of employees working in establishments covered by this Act. Your able Labor Law Consultant may ask you a set of structured questions and may opine that you are covered by the def. of 'Employee' as in this Act also..........

One of the duties and responsibilities of Inspector appointed under this Act ( Labor Inspector in o/o Labor Commissioner might also be functioning as Inspector under this Act as well as under Payment of Wages Act) is to ensure that promised amounts and FnF wages are paid to employee by the fixed/due date of payment of wages......

 

YOu may not be covered under Payment of Wages Act from the date your wages were increased above Rs.18000/pm.

3. As already pointed out in other thread initiated by you the software companies are covered by Labor Laws but since you are asking your employer ……….ONLY………..you are getting misguided.

Ask Lawful authorities or Employee’s/Trade Unions or Lawyer and be guided properly.

4. & Other points 1) as posted by you in your query in this thread:::::

The Bonus as per Bonus Act or otherwise Payment of Bonus Act is not applicable since your basic wages are above Rs.10000/annum, however employer can still pay by his sweet will……and this Bonus is for Calendar year Jan-Dec

 

The Bonus (Rs.20000) and Potential Annual performance Incentive ( c) shall be applicable and payable to you if you have performed and satisfied the conditions of performance during the period of these Bonus/Incentive (31 March) .The condition of payment if employee is on the rolls of the company at the time of disbursement of these amounts may not cut any ice……………………

Moreover as per you the employer has neither announced any amount for 2Y and apparently has not fixed any date for payment also……..The employer can not hold the amounts to any date infinitely.

 

Employee’s unions/trade unions can also effectively handle such matters and have succeeded to get amounts even on pro rated basis……

 

5. NO. It is committed and promised fruit of labor and non payment can be termed breach by employer……..

 

 

Your employee’s unions and Lawyer can help you to get case laws and judgments and can fetch you relief even without judgments….. 

 

 

Let us imagine for a moment that you are not covered either as 'Workman' or 'Employee' in that case limitation Act may come into play and your HR/Employer may happily be watching for 3 years to pass and you should therefore stake your claim within 3Y...........

Pankaj (software engineer )     03 January 2015

Thanks for your time and suggestions.

but I had submitted this case to labour commissioner office and employer didn't appear in front of labour commissioner officer for more than 4 notices, so officer suggested that, we can't take your complaint to labour court as you are software  Engineer and earning more salary than Rs. 10,000,


Also as my bonus part come under Fixed CTC per annum, so here performance doesn't matter right?


They have not submitted any performance report for 1 and half year, so I don't have any data with me, but previously i was getting 80% of performance amount amount quarterly. So on that basis can I demand for incentive amount in labour court? 

Kumar Doab (FIN)     03 January 2015

Since you have not been able to handle on your own prefer to proceed further under expert advice of your Labor Law Consultant/Service matters Lawyer.... You can also consult employees/trade unions leaders.... The amounts stated in CTC are promised amounts..... You should have performance data. The company shall also need to produce performance data to prove and declined the payment

T. Kalaiselvan, Advocate (Advocate)     06 January 2015

You have been properly advised t pursue the matter through labor law practising advocate who will be able to guide you properly in this regard, but you failed to take the hint hence you are in the said mess.  Atleast now consult an advocate and take his advise for further proceedings.


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