HCL waives off refund of advance variable payout after outgoing staff protest

Earlier, employees had expressed their displeasure when the Company had said it would recover the bonuses from the exiting employees


Early this month, 1400-odd outgoing employees of Indian tech multinational, HCL Technologies, approached Nascent Information Technology Employees Senate (NITES) with a grievance.

These employees were complaining that HCL had decided to cut their employee performance bonus or the advance variable payout from their full and final payment.

Harpreet Saluja, president, NITES, shares with HRKatha, “Outgoing employees raised the flag when HCL issued a broadcast mail on November 18, stating that if an employee resigns and the last working day is between September 1, 2021 and March 31, 2022, employee performance bonus paid in advance from April 1, 2021 till the last working day will be recovered in full.”

As per Saluja, this condition over the advanced paid-out bonus was not communicated to all employees earlier. It was only on 18 November, 2021 that HCL sent out this mail to all employees – HRKatha also has a copy of this mail.

“This wasn’t communicated to all employees. The policy was introduced in April 2021 and the broadcast e-mail was sent to employees on 18 November 2021. The time period in between is a fairly long one,” says Saluja.

When HRKatha contacted HCL for clarification on this allegation, HCL sent a written statement which says, “HCL Technologies is an employee-friendly organisation with global best practises. Amongst its several unique initiatives, HCL Technologies differentiated itself in the India market with a unique compensation structure for its junior employees (typically under 10 years of experience) with an aim to maximise their take-home pay package. For more than a decade, all junior management employees were paid the variable pay in advance, as a supplement to their fixed salary. The employment contract/policy very clearly stated the terms of payment.”

“During the pandemic, beginning last year, the organisation decided to waive off all the performance conditions attached to this component and pay 100 per cent 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, from 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. Our endeavour has always been to engage, enable and empower as we continue to work in a fair and equitable manner towards all,” the official statement says.

“Not every employee has this clause in the offer letter. The clause itself is in violation of the Payment of Bonus Act 1965. As per the law, companies cannot deduct paid-out bonuses of their employees,” claims Saluja.

Saluja further says that apart from the advance variable payout or employee performance bonus, there are other bonus components as well which are part of the total compensation of employees, which the Company still continues to deduct from the employees.

“What about the employees who have already left the company with their EPB bonuses deducted?” he questions. “This is an unfair and illegal practice by the Company,” he states.

As per Saluja, the issue is not over yet. A written complaint has already been sent by NITES to the Ministry of Labour and Employment coupled as well as the Ministry of Corporate Affairs and the Prime Minister’s Office. The Senate is also in the process of filing a court case against HCL Technologies.

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