Reduction in salary during insolvency


Querist : Anonymous (Querist)
23 July 2020

Dear Sir(s),

The resolution professional has issued letter indicating reduction in salary of the employees.

My understanding is that since reduction in salary have adverse impact on calculation of gratuity and other benefits as such reduction may only be done after paying the previous accrued benefit and then starting afresh with the new terms of employment.

Kindly advise so that we may counter the resolution professional proposal.

Any judgment to support the contentions will be appreciated

Isaac Gabriel (Expert)
22 August 2020

Whether the employer is Govt,Quasi,or Private ? If so it is illegal.

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