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shruthi (n/a)     22 October 2007

Termination payments

Can a company have a policy which encashes Earned leave on the basis of Basic Salary whereas the compensation to be made in lieu of notice period is required to be paid on the gross salary

Secondly is there a definition of Cost to Company in legal terms. Would a variable pay be included in CTC

Appreciate your response on whether this is legally tenable (ab initio or by subsequent change of policy )



 3 Replies

PBS KUMAR (n/a)     23 October 2007

Dear Ms. Sruthi ji,

We can not include the variable pay in the CTC. Becaue the variable pay will be depending up on CPI Index so it will be varry for every six months.




shruthi (n/a)     24 October 2007

Thanks. I have one more Q

We are proposing that the employee sign a letter that states that they voluntary and unconditionally agree to pay a sum of -- in case they resign from services prior to a specified date.

The consideration is an early vesting of stock options

Can the company proceed against the employee in case of early exit for recovering the said amounts
If the employee were to provide a declaration that he will not abide by the voluntary agreement prior to exit, is there a remedy for the company

PBS KUMAR (n/a)     25 October 2007


Yes, Some of the organisaions are giving 'Retention Payment', such payments are some times recovable from the employees while terminating the service in the middle. The payments are issuing on satage by satege in thir services. But the variable payment is differ , its attratcs the Minimum Wages Act. which is connected with VDA as per CPI number.




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