Davos-2022
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HCL Tech revokes policy to recover bonus from exiting employees

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Earlier this month, multiple employees raised concerns around the company recovering the bonus paid to them when they are exiting the firm.

HCL Tech revokes policy to recover bonus from exiting employees

IT services major HCL Technologies has revoked the policy to recover the bonus paid to employees when they quit the firm in the middle of the year.

This comes after multiple complaints from employees, some of whom approached IT employees union, and wanted the firm to revoke the policy, and also recover the bonus detected by HCL Technologies.

"During the pandemic, beginning last year, the organisation decided to waive off all the performance conditions attached to this component and pay 100 percent in advance to reward the employees. This advance variable payout (much like standard sign-on bonus terms and conditions) would be deducted if any employee left ahead of the completion of the performance review cycle, in the final settlement. Going forward, we will continue with the advance variable payout for our employees and have also waived off the recoveries w.e.f December 22, 2021,” the company spokesperson said in a statement.

The company further explained that all the junior management employees were paid the variable pay in advance as a supplement to their fixed salary, and this is clearly stated in the terms of payment.

This comes at a time, when companies are seeing high attrition rates, even as the demand for technology services continue unabated resulting in record hiring.

What happened?

Employees, who were exiting the firm, noticed a new clause that stated that bonus paid to the employees who are exiting the company between September 2021 and March 2022, will be recovered in full. Moneycontrol has reviewed the copy of the mail with the clause about recovering the bonuses.

Many complaints raised complaints and reached out to employee IT unions on the same. Subsequently, on January 7, a complaint was filed with the Ministry for Labour and Employment.

Harpreet Saluja, President, Nascent Information Technology Employees Senate (NITES), a union for IT employees, said, “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 unethically amend the bonus scheme depriving bonus to its employees. The employees who resigned from the service also are entitled to a bonus for their tenure.”

Few days after the complaint was filed, the company has said that this clause has now been revoked.

HCL Tech revokes the clause

In the latest policy document that Moneycontrol viewed, the new clause about the recovery of the bonus for employees who are exiting the company between September 2021 and March 2022 was absent.

Saluja said that while the company has now revoked the policy, it is only for the Engagement Performance Bonus, a variable component that is paid to the employees on a monthly basis. Advance Monthly Performance Bonus, which will be recovered from employees, has not been revoked.

“We are in process of filing a court case against HCL Technologies against illegal bonus recovery policy and for refund of the bonus amount deducted to all employees,” Saluja said.

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