Can private sector company deny me the annual performance bonus?

In Labour & Service Law

Can a private sector company (an Oil and Gas private sector company) deny me the annual performance bonus for FY 2013-14 citing a new policy brought in August 2013?

Facts: 1. I have been an employee for the organization for the past ~5 years before resigning recently. 2. I will be in the company's payroll between 1st April 2013 and 28th March 2014. (virtually the full aprraisal cycle) 3. Company amended its bonus policy in August 2013 whereby it stopped paying bonuses to resigning employees.

Only people on payroll on the day of bonus payout were deemed eligible for bonus.

Kindly advise.

Answers (1)

198 votes

Payment of bonus is the statutory liability on the employer and receipt of bonus amount is the legal right of the employee and the amount to be paid, to whom to be paid and by when to be paid  has been well framed in the Payment of Bonus Act. 

The employer cannot wish away the  bonus scheme depriving bonus to its employees.  The employees resigned from the service also are entitled to bonus for their tenure. 

You may file a complaint to the Area Deputy Labour Commissioner for payment of bonus and he being the competent authority will  solve your problem. Please let us know if you would need assistance in drafting the complaint.

If the above method does not provide you the desired relief, the Company's bonus Policy can be challenged in the Court for being arbitrary and unreasonable as the resigning employees who have been on the payroll for the entire appraisal cycle should be eligible for performance bonus.

We will be able to guide you in a better manner after going through the Bonus Policy of the Company.

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