• Recovery of joining bonus in case I resign before 1 year

I joined a firm on 12th December 2022. 
I gave notice of my resignation on 3rd october 2023. 
This organisation is having 90 days notice period, that I am willing to serve. It will turn out that my last day of work will be around 1st january 2024. 
They gave me joining bonus with following clause: 

"This amount is subject to taxes, as applicable, and will be recoverable, in full, in case you resign
within 1 year of your date of joining". 
What does that mean? Am I liable to pay them entire amount as I will serve more than an year? There is no definition of resign written anywhere in offer letter. 
Any guidance in these terms will be helpful
Asked 1 year ago in Labour

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12 Answers

If you are relieved within one year from the date of joining then you are liable to return the bonus as per the conditions and terms of the employment which you accepted and signed at the time of joining

T Kalaiselvan
Advocate, Vellore
87497 Answers
2348 Consultations

You are resigning from services within one year and notice period is secondary part. If you could have given notice after completion of one year from joining than they don't have any rights to collect the joining bonus from you.

 

This matter can be solved amicably between you, your manager and HR. to take back this joining bonus =return condition.

Ganesh Kadam
Advocate, Pune
12995 Answers
263 Consultations

You have resigned within one year of joining 

 

2) you are liable to return the joining bonus 

Ajay Sethi
Advocate, Mumbai
97297 Answers
7859 Consultations

 

You are liable to pay the joining bonus 

Ajay Sethi
Advocate, Mumbai
97297 Answers
7859 Consultations

You have been clearly informed about the conditions in this regard.

Hence, even if your last working date is beyond one year of employment, if you get relieved earlier by buying the notice period, then you may have to return the bonus received..

First understand the law involved in this before taking any step that will be adverse to you.

T Kalaiselvan
Advocate, Vellore
87497 Answers
2348 Consultations

The clause in your offer letter means that if you resign from your job within one year of your date of joining, you will have to pay back the entire amount of the joining bonus to your employer. The joining bonus is a sum of money paid to you by your employer as an incentive for joining their company. It is usually subject to taxes and deductions as per the applicable laws and regulations. However, if you leave your job before completing a certain period of service, the bonus may be recovered by your employer as a penalty for breaching the contract.

The term “resign” means to voluntarily quit or leave your job. It does not matter whether you serve the notice period or not, as long as you initiate the termination of your employment contract. Therefore, even if you serve more than a year in total, including the notice period, you will still be liable to pay back the joining bonus if you resign within one year of your date of joining.

For example, if you joined on 12th December 2022 and resigned on 3rd October 2023, you will have to pay back the joining bonus, even if your last working day is 1st January 2024. This is because you resigned within one year of your date of joining (12th December 2022 to 11th December 2023). However, if you joined on 12th December 2022 and resigned on 12th December 2023 or later, you will not have to pay back the joining bonus, even if your last working day is before 1st January 2024. This is because you resigned after completing one year of service.

This is the general interpretation of the clause based on the common usage and meaning of the words. However, there may be some variations and exceptions depending on the specific terms and conditions of your employment contract, the policies and practices of your employer, and the laws and regulations governing labour and taxation in your jurisdiction. Therefore, it is advisable to consult a lawyer before taking any action based on this information.

 

 

Muraleedharan R
Advocate, Trivandrum
373 Answers
2 Consultations

- As per the Employment Act, employees have the right to resign at any time, by serving notice or by compensating the employer with salary in lieu. It is an offence for employers to disallow employees to leave their job.

- Further, the resignation decision is the employee’s decision, and the employer cannot sue for breach of contract, if the employee leaves without serving contractual notice, and except recovery of the said amount, company cannot harm you for the same.

Further , you both are under obligation to comply the terms of the offer letter , and hence if there is notice period is mentioned 90 days then no other provision will come at the time of accepting the resignation. 

- Further, section 27 of the Indian Contract Act prohibits any agreement in restraint of trade and profession.

- You are only bound for the 90 days notice  period , and if you have already worked for the same , then the company cannot ask you to pay the bonus on any ground. 

Mohammed Shahzad
Advocate, Delhi
14676 Answers
224 Consultations

Employment in notice period is part of service. Joined on 12th December 2022 and successful relieving  will on 1st January 2023, you are entitled to joining bonus. Date of resignation is not dater of relieving, date of discharge is date of relieving. You are on payrolls during notice period.

Ravi Shinde
Advocate, Hyderabad
4301 Answers
42 Consultations

If you are under agreement to do so you need to only make good loss to the employer 

Prashant Nayak
Advocate, Mumbai
32716 Answers
208 Consultations

A notice period is typically considered a part of your employment. When you resign from a job or are terminated by your employer, the notice period is the period of time between when you provide notice of your intention to leave the company and your actual departure date. During this notice period, you are usually still considered an employee, and you may be expected to continue performing your job responsibilities, unless your employer chooses to relieve you of your duties immediately and pay you in lieu of notice.

So, you do not have to pay joining bonus back to your company and if they ask you to do so then that is not tenable in the eyes of law.

Siddharth Jain
Advocate, New Delhi
6386 Answers
102 Consultations

Sir/Madam, 

You are suggested to read the offer letter carefully because the exact thing will be clear from there. As per the input, you would serve more than one year till 01.01.2024 and then no payment/recovery to be done. However, it is suggested to read offer letter because employer sometimes write in hidden/disguised way and you should not be trapped by them in they miselading wordings. Thanks

Ganesh Singh
Advocate, New Delhi
6769 Answers
16 Consultations

Greetings of the Day,

I have read your issue but find that there are some facts which need to be clarified. You can approach on either nine two one two one two four five eight five or seven zero four two eight three three six eight six for personal approach.

We Hope that a personal consultation would be fruitful to the issue and it would be better for you to talk to someone directly.

Best Regards

SPS Law Chambers
New Delhi.

Shivam Bansal
Advocate, New Delhi
131 Answers

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