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SK (DGM)     28 May 2013

Please suggest legal course - employer not paying salaries

  • I have joined as DGM sales  in July 2012  with  an organisation ( a limited company ) with PAN India Operations in telecom & IT. Employee strength of organisation is close to 1000 nos.
  • The salary structure of organisation is 70% Fixed + 30% variable. The variable part was supposed to be paid by employer on quartlerly basis.I was on probation period for first six months and got confirmation as permenant employee in Feb2013.
  • The issue is that company is not paying salaries to employee for the past almost 6 months. I have also not received any due variable part of CTC  in any quarter.All the time CEO and other top authorities are stating that it is due to some financial issues and soon things will be normalised.Initially they communicated that within 2 months things will be normal. But after two months they again said it will take another month. And this has been going on till date.
  • Despite of several emails to all top authorities , none of these answered in specific. It is not possible to continue with employment without receiving salaries.The intent of organisation is doubtful as they want employee to leave the company on their own  as there is no revival of the financial mess. Only few top authorities are likely to remain there.
  • All records of an employee are on company portal. They have generated salary slips also for all these months ( for each month - but salary not credited to employee). They have done income deductions( on records )  from employee uncredited salary . There is serious doubts as since they have not paid salary , how they would have even deposited IT to govt.There is no challan or Form 16 provided till date for FY12-13.
  • I have the following docs with me : 1) Appointment letter original (2) confirmation letter original( 3) UNPAID salary slips printout ( monthwise ) from company portal (4 )  copy of  MY all email communication unanswered by employer (5) Copies all emails sent by company to all employee on financial issues. 
  • The condition as explained above is similar to majority of employee.
  • I am still continue to be company rolls . Kindly suggest in order to get the salary : (1) What legal course action required to done from side.(2) To whom shold I approach (3) What all docs will be required to initiate (4) Any indication on time frame it might take to recover my dues.


 1 Replies

Kumar Doab (FIN)     28 May 2013

 You may approach competent and experienced labor consultant/service lawyer as ap, show all of your documents, give inputs in person, understand the merits and proceed under expert advice of your lawyer.

There are many threads on non payment of salaries.e.g:

https://www.lawyersclubindia.com/forum/Salary-due-for-6-months-81100.asp#.UaDczqKAqWM

 

https://www.lawyersclubindia.com/forum/Company-in-liquidation-77247.asp#.UaRrMdKAqWO

 

The company has stated financial difficulty.Worst situation would be company reports itself as sick/ closed/bankrupt/under liquidation.

 

In any such eventuality the dues of payment of Workman are last priority at number 5: Workmen’s Dues (pari passu with Bank Dues)

 {Supreme Court of India :Central Bank Of India vs State Of Kerala & Ors.}

 

Is the company depositing statutory payments e.g PF, Gratuity, ESIC……….

 

THE PAYMENT OF GRATUITY (CENTRAL)

RULES, 1972

3. Notice of opening, change or closure of the establishment:…….

(3) Where an employer intends to close down the business he shall submit a notice in Form C to the controlling authority of the area at least sixty days before the intended closure.

 

It is felt that the unpaid employees are wasting their time, in this company.All al employees may join hands, agree to be a witness to each other, and firm up your next employment as ap.

  

--------In addition to the Industrial Disputes Act, 1947, states also provide for compliance's under the Shops & Establishment Acts, Standard Standing Orders Act……. If the employee falls within the definition under these enactments, then he would be protected, up to that extent. All of these enactments may be available at the Dept. of Labor website of the state.

 

The company might have certified standing orders and might extended it to your designation.

The standing orders should be displayed at notice board and a certified copy be provided to employee against a nominal payment say Rs.10/--

The employee or anyone can approach certifying officer: DLC in o/o Labor Commissioner at regd. Office of the company and obtain certified copy of standing orders against fixed charges.

  

You submit a gentle and pointed representation addressed to good offices of appointing authority, MD, Chairman, Company Secretary,……..and narrate what were your expectations from the company and what promises were made to you while appointing you, and what exactly you have received, non payment of wages, salary etc………….. (Write only those points which you can prove later) and conclude that you are facing acute financial hardships and are not able to meet expenses of attending to office, your family and personal needs and should be paid at once.

 

The employer would be happy to get resignation with immediate effect and square off the dues with notice pay.

 ( It is felt that company is coercing resignations by employee to circumvent lay off/retrenchment.)

The employee should declare that employer has breached the contract of employment, is unworthy of being employed with, and conclude that in such a situation the clause on notice period/pay does not hold any ground, becomes defunct, should not be applied and employer should on his own waive off the notice period/pay in writing in writing on his own.

 

Let this representation be structured and drafted by your lawyer.

 

The representation submitted by you shall serve as written record and defend your interest in future at appropriate time in appropriate forum.

 

The o/o Labor Commissioner, Inspector under Payment of Wages Act, Shops and Establishments Act, PF, Gratuity, ESIC etc………… have to take suo motu notice of such developments, hence a phone call, email, letter should suffice. While these offices are notified employee(s) may make a mention even if verbal that they are contemplating to call a pres conference that officials were notified. This should move them. All of thee offices are under purview of RTI Act.

 

Your lawyer may opine that a complaint under Section 406,420 can be filed, and you can file complaint with police with the nearest police station…………SEBI (If it is a listed company) and Govt. Establishments which have issued registration certifications, and approvals………..

( You might have gone thru the popular publication on cases filed by GM of ……………Ambani led Re……iance group)

 

Your lawyer may opine that you fit in explanation of employee under Shops and establishments Act of the state, or that you have to approach civil court.

 

Your lawyer is best placed to comment on time it may take for the case to conclude.

 

 

----------The salary slips which are to be downloaded from the website of the company are uploaded by company or some third party payroll agency?

 

The salary slip shows the TDS!!!!!

 If you can persuade the payroll executive/FR/Accounts Dept……… to send as attachment all salary slips to you from official email id it would be better.

 You may attach all salary slips with your representation ( by redg. posy preferably ) to good offices and raise a query that although the salary slips are uploaded the salary is not paid in the bank a/c……….and that Tax is deducted but Form 16 is not supplied…………….and ask them to confirm the validity of salary slip, TDS, and supply Form16 at once………….

  

Minimum Wages Central Rules:

26. Form of registers and records: (1) A register of wages shall be maintained by every employer at the work-spot in Form X.

(1A) Every-employer shall in respect of each person employed in the establishment, complete the entries pertaining to a wage period-

(a) in columns 1 to 15 of Form X, before the date on which the wages for such wage-period all due;

(b) in columns 16 and 17 of the said Form, on the date when payment is made
and obtain the signature or thumb impression of the employee in column 18 of the said Form on the date when payment is made.

(2) A wage slip in Form XI shall be issued by every employer to every person employed by him at least a day prior to the disbursement of wages.

 

(3) Every employer shall get the signature or thumb-impression of every person employed on the Register of Wages and wage slip.

(4) Entries in the Register of Wages and wage slips shall be authenticated by the employer or any person authorised by him in this behalf.

 

Payment of Wages Act:

13A. Maintenance of registers and records.-(1) Every employer shall maintain such registers and records giving such particulars of persons employed by him, the work performed by them, the wages paid to them, the deductions made from their wages, the receipts given by them and such other particulars and in such form as may be prescribed. (2) Every register and record required to be maintained under his section shall, for the purposes of this Act, be preserved for a period of three years after the date of the last entry made therein.]

  

--------The Deductor has to deposit TDS and submit ITR on quarterly basis.

 

The I.Tax office , jurisdictional CIT-TDS where company files its return is the office to contact.

If you have registered at I.Tax website you can access form 26AS.

 

Form 16 are issued and supplied by April/May.

If the tax has been deducted, then the employer is bound to issue certificate in Form 16 and you may report the matter to your income tax officer (ITO) and highlight that you cannot be called upon to pay tax  to the extent TDS has been deducted. The employer will be held responsible for default if he is not depositing the TDS or not issuing the certificate in Form 16. You do not have control over the deductor.  Hence, you should file ITR on the basis of income and TDS details you have (salary slip) and claim the TDS even if it is not deposited by your employer. 

 

The jurisdictional CIT-TDS where employee files return and jurisdictional CIT-TDS where company files return, Income Tax Ombudsman are the offices/officials to contact.

 

------The unpaid wages can be claimed under ID Act, Shops and Establishment Act, Payment of Wages Act, civil suite……………

 

Valuable advice of learned experts/members is sought.

 

 

 

 

 

 

 

 

 

 

 

 


Attached File : 568330152 payment of wages act 1936.pdf, 568330152 the minimum wages central rules1950.pdf downloaded: 205 times

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