TestUserEmployee (IT) 11 May 2023

Laid off & full and final settlement

I laid off from a company recently. I had 4.5Lakh retention bonus and 2.5 lakh Variable pay which are supposed to be paid in the april month. I laid off in the month of Feb. Retention bonus they have added during the last layoff(October). Because of that I stayed with the same organisation.

Now they are telling since I have not completed the 1 year, they won't be able to give those amount.

What should I do next. Suggestions please.

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Quick Summary

If you've been laid off and your employer is withholding your full and final settlement, including retention bonuses or variable pay, you have options. You may be entitled to these payments even if you haven't completed a full year of service. Consider sending a legal demand notice and, if necessary, filing a recovery suit in Labour Court to claim your due amount with potential interest. Some companies offer Voluntary Separation Policies (VSP) which may include severance pay and continued benefits.

3 Replies

T. Kalaiselvan, Advocate (Advocate) 11 May 2023

File a recovery suit in Labour Court: If the employer fails to respond to the legal notice, a recovery suit can be filed by the employee in Labour Court against the employer. The court may award the due amount along with some interest on the total amount of incentive, calculated from the date it became due.

In the lay off cases:

The labour commissioner’s office recommends companies consider Voluntary Separation Policy (VSP) that allows employees to resign voluntarily and get VSP benefits. These benefits include 22 weeks base pay, a one-week base salary for every six months of their service, a severance payment of up to 20 weeks, and continued medical insurance coverage for six months as per policy or equivalent insurance premium amount.

Employees need guidance and support during and after layoffs. Companies must continue to offer a full salary for the duration of the notification period. While there may be different reasons for laying off employees, companies should remember that empathy builds trust. Despite all the efforts, the layoff process is difficult for the sacked workers as well as for the existing employees.

You can proceed with the legal action as suggested if the employer is not complying with the demands made through a legal demand notice.