I wanted to know If the appraisals are delayed by few months & if increment are paid as arrears, should company pay arrears if employee resigns after the appraisal.
We had mentioned that the appraisal are effective from 1st April, however we completed the appraisal process only by Sep month. So we paid April- Aug month increment as arrears in the following months Sep- March.
However there are some employees who left the Org in Nov/Dec month. As company should we still pay the arrears or not.
In future can we mention in the Appraisal letter that only emp who continue to work with us will be eligible for arrears. Will this be ok as per labor law. Need clarity on this.
In a private company, everything is possible as per the discretion management.
Salary after appraisal should be paid as per the appraised salary in the form of Arrears for the month of effectiveness. If the employee left due to delay in appraisal then it is the fault of management but separated employee should be paid as per the revised salary.
As per standard practice, organizations will pay arrears for all irrespective of whether current or separated. Bonus payment will also be made like that. However if there are explicit clauses in HR Policy that arrears are applicable only to those who are currently in service, then company need not pay appraisal arrears to those who are eligible for appriasal linked arrears but left the organization before the actual payout.
Increment is salary raised for good performance. So, if you have not giving in writing to he resigned employee, then you need not get into that again. But if you have given in writing to them the employees can go to the court as well. In that case, company will have to give them the due amount. In ideal situation, employees should be paid for the time they have been in the system at new salary levels.