Bonus after resignation not given by employer - full and final signed

Dear Sir/Madam,

I have not received the 2015-16 year bonus, so I have emailed the HR department to release my bonus. However, they are saying that since I am a former employee, I am not eligible to receive the bonus. I mentioned that under the bonus act, bonuses should be paid to all former employees, but they responded by pointing out that I had signed the receipt for full and final settlement, confirming that all dues have been cleared.

Please advise on how to proceed.

Thank you.

Bonus is a deferred statutory payment due to an employee based on his eligibility in terms of his salary and attendance during the Accounting Year for which the bonus is to be declared and disbursed after the close of the year. Therefore, firstly, those employees leaving the organization by normal termination of employment before the declaration and payment of bonus for the year during which they worked are also entitled to a bonus on par with others remaining in service. It is immaterial whether they are in service or not when the bonus is actually declared and paid.

Secondly, the full-quit receipt tendered by the employee earlier at the time of full and final settlement cannot include a statutory payment like a bonus to be paid later subject to conditions laid down in a statute. Try to convince your HR, and if it is futile, make a complaint u/s 21 of the Payment of Bonus Act, 1965, to the Appropriate Govt. for recovery of the amount of bonus due to you.

Dear Nilesh,

Please reply to your HR stating that your F&F does not include Bonus under the Payment of Bonus Act. Mere signing of "No Dues Certificate" will not bar an Employee from receiving Bonus to which the Employee is entitled. As suggested by Umakanthan Sir, please initiate action immediately by taking up the matter with the Labor Officer concerned.

Thanks for the suggestion. I have spoken with HR, but he is mentioning some standing order as the reason why the bonus is payable according to company policy.

I think that the HR you mentioned seems to be addicted to the corporate mantra "the boss is always right". That's why he refuses to distinguish between "Company Policy" and the "statutory right of an employee of that company" and a provision of the Standing Orders of the company and a provision of a statute applicable to the company and the particular employee covered by it. Better, follow my suggestion.

Dear Mr. Nilesh,

If your Basic+DA+VDA during FY 2015-16 was Rs 21,000/- per month and below, you come under the purview of The Payment of Bonus Act, 1965. It has nothing to do with Standing Orders, Company Policy, etc.

I am not happy with the way you have communicated with your HR. You should have communicated in writing and shared the reply from your HR in this forum. If you are really interested in getting your bonus, firstly, you should submit your claim in writing to your employer by Registered Post Acknowledgment Due. In case there is no reply from your employer within a reasonable time, submit your application to the Labor Officer concerned under whose jurisdiction your previous company comes. Please initiate action and then revert. Actions speak louder than words.

Ok, noted, sir. I will do the same thing and reply to you.

Dear Nilesh ji,

Umakanthan Sir has given the right advice to you. I also support the advice given by SRINATH SAI RAM. He has rightly said that mere signing of "No Dues Certificate" will not bar an employee from receiving (I will say claiming) the bonus to which the employee is entitled.

I would like to quote/share a case law (W.A. No. 1478 of 2006) for the benefit of you and the readers. In P. Selvaraj v. The Management of Shardlow India, the Madras High Court was of the opinion that where a full and final settlement was a predicament whereby it was mandatory for an employee to sign it to get any amount, even if it was less than the sum he was entitled to, in those cases the full and final settlement will not stand, and the employee can claim the sum he was entitled to. It also asserted that an employee cannot be estopped from claiming the gratuity amount by virtue of Section 14 of the Payment of Gratuity Act, 1972, since it has an overriding effect over any other enactment or any instrument or contract.