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Incentive Amount not included in Full & Final Settlement
10-Jan-2026 (In Labour & Service Law)
Sir,I was employed with a logistics company for 2.9 years and resigned in Sept 2024, my last day of working - Jan 2025. They delayed my full and final settlement statement which was given in May 2025. In that they did not include my performance incentive saying I was not part of the company till the time it was declared. I demanded it on a pro rata basis, they refused. Till the time I resigned there was no such policy that persons leaving in the middle, wont be given the incentive. Please guide.
If the incentive was part of your service conditions / past practice and there was no written policy denying pro-rata incentive to employees who resign, the company cannot arbitrarily deny it later. Incentives earned during employment are “wages” if linked to performance. You may issue a legal notice claiming pro-rata incentive on principles of legitimate expectation, past practice, and equal treatment. If you qualify as a “workman”, you can approach the Labour Commissioner under the Payment of Wages Act / ID Act. Otherwise, you may file a civil recovery suit for dues. Delay in F&F itself strengthens your case.
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Adv. Pankaj Bajaj
Pune | 700+ Answers
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Your entitlement depends on the nature of the incentive and company policy in force during your service. If the performance incentive was linked to work already performed and not purely discretionary, it becomes part of “wages/earnings” and cannot be denied merely because you resigned before declaration, unless an explicit written policy existed at that time excluding separated employees.
Since no such policy existed when you resigned, a later clarification or internal decision cannot be applied retrospectively. Courts and labour authorities have repeatedly held that incentives earned during employment are payable on a pro-rata basis, if performance conditions were met.
You may issue a legal notice demanding pro-rata incentive, rely on appointment letter, incentive schemes, emails, and performance records. If unpaid, you can approach the Labour Commissioner (if covered under labour laws) or file a civil recovery claim. Delay in F&F settlement also strengthens your case for interest.
Helpful?
Adv. Pankaj Bajaj
Mumbai | 1000+ Answers
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