HCL Tech removes controversial bonus recovery clause from HR policy
India's fourth largest IT services company HCL Technologies has removed the controversial clause on recovery of Employees Performance Bonus or EPB from its HR policy, the updated policy document shows, after some of its former employees threatened to go to court.
HCL Tech will announce its December quarter results on Friday.
A body representing employees of the IT ITES sector told Business Today that the firm has not revoked another contentious clause that pertains to the recovery of the advance monthly performance bonus or APMB.
While EPB is applicable across all bands of employees, AMPB is a project-specific bonus that is not paid to every employee, according to Saluja.
Former HCL Tech employees who had already repaid the bonus are considering approaching the labour court against the tech major and will be supported by the employee union.
According to emails seen by BT that were exchanged between the HR department of HCL Tech and outgoing employees who were asked to pay the bonuses before leaving the firm, such a policy was implemented from April 1, 2021 onwards, a time when India s IT services sector was grappling with concerns over massive employee resignations, which affected the supply side and delayed delivery timelines.
The company stated that it will recover the employee performance bonus from those who left the firm between September 21 and March 22. The HR department sent a broadcast email to its employees on November 18, 2021, detailing the same.
The EPB bonus recovery clause has been removed from the policy document after an outcry. The company, like other industry peers, saw its attrition rate peak to 15.7 per cent in Q 2 FY22, up from 11.8 per cent in Q 1, FY 22.
Despite the resignations, the company has continued to add a record number of employees, with the addition of 11,135 people during Q 2 -- the highest in 24 quarters.
Saluja argued that payment of bonus is the statutory liability of the employer and receipt of the bonus amount is the legal right of the employee, and all this has been enshrined in the Payment of Bonus Act of 1965.
The bonus scheme cannot be abused by the employer, so he can't give the bonus to its employees. The employees who resigned from the service are entitled to a bonus for their service. The policy adopted by the company to recover bonus that it has been paid to its employees is iniquitous, arbitrary and harsh. It is important to be noted that a recovery policy without statutory approval is a hardship and it far outweighs the equitable balance of the employer's right to recover, as pointed out by Saluja.
When reached for comment, HCL Tech said they were currently in a silent period and will respond during its earnings conference call.