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Ananda   21 April 2022

Previous company forfeited bonus

Dear Experts

After resignation while serving 2 months notice period, employee gets his bonus letter with amount specified. However after he quits , in the final settlement, bonus is not paid. Upon enquiry, company says as per policy bonus will be paid only to employees active and not left or resigned. Amount due is 3.50 L

After many requests, a legal notice sent and yet bonus not paid. Some laywers suggested going to Labor Court but since employee is a IT Manager/Architect with 19 LPA salary, some tell need to go to civil court. 

Kindly suggest what is best remedy  - is it feasible to go for Writ petition  or can we go to Labor court etc. also if civil court, can we go for summary suit (and what percent is court fees), in bangalore.

We already paid advocate but getting different answers (first says we go to HC to then says civil court, first says court fees 10000 then says 40000). Surprisingly he says he will try to get exparte order without sending notice, which I find hard to believe.  

So requesting a second opinion/guidance as we are losing confidence/faith.




 4 Replies

G.L.N. Prasad (Retired employee.)     22 April 2022

Please inform me whether it is a "Bonus" or treated with a different name in the letter addressed to you.  It is exgratia or performance bonus or something like that.

if it is a performance bonus, get a copy of the laid down procedure from your old colleagues and find out whether there was a condition that those employees who resigned are not eligible for such a bonus.

(Several cases filed by Private sector bank employees( who were not paid exgratia for the actual year worked were denied bonus) pending over two decades.

Rama chary Rachakonda (Secunderabad/Highcourt practice watsapp no.9989324294 )     22 April 2022

You can file a petition in civil courts not labour court.The amendment in the eligibility limit appears to be an initiative which forms a part of the Central Government's pro-labour policy. Interestingly, the last amendment to the eligibility limit was carried out in the year 2007 and over the past decade, the economy has seen significant reforms. These economic reforms have contributed towards an exponential increase in pay-scales making this amendment to the Principal Act very important to the larger populace of the workforce which earns between INR 10,000 and INR 21,000 per month.

G.L.N. Prasad (Retired employee.)     22 April 2022

If you want more details search google for "ICICI Chanda Kochar case" where past bonuses were recovered from Chairman which included shares allotted to her. As her arguments are essence and courts have not considered only on the ground that she is terminated on corruption charges and all her 99% contribution was lost with 1% .

Ananda   22 April 2022

Thank you sirs,  looks like Civil case is the remedy here. My advocate suggesting under Section 26 Order VII Rule 1, but I read that  Summary suit under Section 37 may be better option. Kindly suggest if a Summary suit under section 37 is feasible in this case.

GLN sir -

It is Annual Performance Incentive, and it is a part of offer letter under Salary/Compensation structure. There is no terms/conditions mentioned in EMployment letter/ agreement about not paying AIP if  not active on date of dibursement. Most employers always delay AIP payout by few months (so 2020 AIP will be paid in Marc 2021). On the contrary, employees are eligible for prorated amount if serving less than a year.

Morever , after I resgned and while serving notice period, compnay gave me my AIP letter  with monthly accrual details for entire year. It is like an assurance that xxx bonus amoutn is accrued based on performance and once accrued, it is not fair or legal to forfeit the amount.

I hope to file the case through my advocate soon , but under most appropriate sections. 



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