Stopping Salary On Resignation - Employee Salary Rights - Employee Wages - CiteHR
Umakanthan53
Labour Law & Hr Consultant
Muddassir_habib
Training & Development
Sumasatish
Hr Executive
Ysbabu
Zonal Sales Manager
Chetan Kumar Raghuwanshi
Sr. Business Analyst
+3 Others

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I need to know if it is legal for any company to stop salary payment during notice period just because employee has resigned. The matter in question is about a Well known telecom software company in Bangalore who stops salary payment from the day the employee has resigned and settles it 1 month after last working day. Which essentially means that the employee is left with out a salary for 3 months since notice period is 2 months. Many employees have faced this situation and have suffered financial and emotional stress becasue of this policy, even senior managers are aware but do nothing about it. As per payment of wages act DELAY in payment can be only due to the following reason 1) Salary calculation was wrong 2)The parties involved in Executing the payment were not present (employee, employer) 3)Act of God where in business could not run as stipulated 4) Any involvement of a third party as a mediator which has failed the transaction 5) Absence - disqualifying payment inpart or whole ... Apart from this there is no provision for delaying or stopping payment because an employee has resigned.

This malpractice has to stop and hence I need advice from forum members on how to proceed as many of my colleagues are facing this situation. Members are requested to give legitimate advice and not suggestions.

Same happened to me in a Mumbai based ISP/Telecom company. They have stopped salary without notice from the day they received my resignation. Even after lot of mail follow-ups with the H.R. team, they didn't reply. Finally when asked face to face, they told that after resignation, the salary process changes and doesn't credit normally. They informed that they have to block the ongoing salary and give a full & final salary with deductions (like a bill). Also, all this pending salary is given after 45 days after the last day in the company. This period is really a poor one, and if one has not give full notice period, then double salary for 1 day is deducted (1 for not working and 1 as a penalty for less notice period)
Finally the poor employee can't do anything, but has to accept the delayed payment and say goodbye

I need a help from seniors. In one of my freind company (ITES company) 2 employees were terminated at the month end. Since Finance has not got the exit report from HR about these 2 employees (HR was on medical leave during those days), salary was credited to those terminated employees for next two months. These ex employees used the amount without infoming the company (knowingly it was not their harden money). After 2 months, when HR finance checking for salary for the current month, came to know that salary is being paid to these employees wrongly.

They have called those ex terminated employees and requested to pay the amount back, these employees arguing it is company mistake (to credit the amount). and were saying will refund the money whenever they have money in thier hand, cant assure when they will refund.

Since this is employer side mistake we cannot argue or force them to refund the money. Please let me know, is there any legal proceedure get refund the money which were paid to those employees (Quite a huge amount).

what measures can the employer take in this situation. I request the senior to help in this regard.

I hope atleast one person have handled situation like this. please suggest if any measures.
please answer d question asked by sumasatish ....I also need answer of that question immrdiately
Dear All,
Stopping the salary or wages is against the right of any registered organisation. It totally depends on the leaving or circumstances and nature of clauses in appointment letter. Most of us do not read the clauses at the time of joining or never took it seriously. Also at the time of giving handover people do not bother to take the NO DUE CERTIFICATE. Kindly get in touch with LABOUR INSPECTOR at your local labour court with a copy of resignation acceptance and copy of appointment letter and the copy of no due certificate. The process is bit slow but it will help you out to get the hard earned money.
Regards,
Muddassir Habib Mustufa
HEAD HR
LAL MAHAL RETAIL LTD.

Dear Muddasir,
Kindly let me know if the employer ask us to resign on spot, without asking us to serve notice period. and if he says that he will pay us the salary on time. But its being 60 days he has not paid. Kindly suggest what step can an employee take...
regards,
Siraj S

HI DEAR ALL I NEED YOUR SUGGESTION, I LEFT THE JOB IMMEDIATELY DUE TO JOINING NEW COMPANY WITH HIGH POSITION, NOW PREVIOUS COMPANY PEOPLE ARE PUTTING PRESSURE AND TELLING THEY WILL TAKE LEGAL ACTION ON ME. I WORKED PREVIOUS COMPANY 15 YEARS. EARLIER WHEN ONE OF MY COLEAGE LEFT THEY DEDUCTED ONE MONTH SALARY. I AM OK WITH ONE MONTH SALARY DEDUCTION. WILL THEY DEDUCT MY P.F. AND GRADUTY ALSO. PLEASE SUGGEST. BABU
Hello All,

I was working in International BPO as Sr.Business Analyst from last 2.8 years. i resigned instantly due to some family problem. Company didn't accept my resignation and ask me to serve notice period of one month but I was requested to them that I’m not able to serve notice period but they don’t listen to me.

Then I decide that I am serving 1 month notice period ( using my 24+ days Earned Leaves in Notice period and rest 6 days will come office to handover ) on before relieving from my duties. My last working day in company will be30thJune 2015”

Company replied me : your Notice Period is of 30 working days which shall not be adjusted with Earned Leaves. You have to serve your full notice period. We will pay you for your earned leaves.

After that I resigned instantly and not served any notice period.

After one week I received mail from HR :- Please refer Point No : 4 of your Service Agreement CUM Appointment Letter No : CB/HR/DE/SA/2012-13/0043 on 17th Jan, 2013. As per Point No 4. Term of Employment : " The term of the Employment shall be the duration of the survival of this agreement. The Employee shall serve a notice period of Thirty (30) Working days after written Resignation. The Employee will not be eligible for any pending wages, emolument, benefit, experience certificate, relieving letter in the eventuality of noncompliance with Thirty (30) working days’ notice period.

” So in view of above, you are not eligible for any wages, experience letter, relieving letter in the eventuality of the employee either absconding without giving the resignation or giving a resignation but not serving the due notice period.

Please suggest I have pending more the 2 Month Salary + Earned leaves + PF.

All the above episodes show clearly how such multinational companies and some of the domestic industrial giants resort to unfair labour practices on the strength of ambiguous terms and conditions purposely introduced in the contracts of employment taking advantage of the precarious position of the employees. It is quite unfortunate that the minimum legal protection of employment and decent treatment based on the humanitarian princples of equity and Natural Justice available to the lower stratum of workmen is not available to employees of higher status and because of this certain Managements torture the employees to the maximum extent possible whenever they are in for greener pastures conducive for their career growth.

Regarding the queries raised by Sixstringer and Greatidea , postponement of duty salary after issue of notice of resignation is certainly a breach of contract by the employer and a civil suit can be instituted against the management for damages on the score of breach of contract as well as causing pecuniary difficulties and mental agony. The inter-departmental procedural formalities and practical difficulties can not be proper excuses.

The problem narrated by Sumasatish is finally the problem of the HR Department. Since the two employees were terminated at the month end, it is the duty of the HRD to transmit the exit report forthwith to the Finance. HRD's slackness in the parellel communication is the root cause of the wrong payments. Therefore, let the HR person on duty at that time make good the loss.

Let Ysbabu await the legal action to be taken by the management. At best they can sue you for damages which can not be more than one month's salary as in the earlier case. They can not withhold gratuity on this score. Send notice for your gratuity; if either gratuity or reply is not received within the time stipulated in your notice, file a claim for gratuity together with interest for the period of default before the Controlling Authority under the Payment of Gratuity Act,1972 for the area. Regarding your PF accumulations apply for transfer your accounts under Sec.17-A of the EPF Act,1952.

The condition relating to forfeiture of pending wages and other monetary dues in the Service Agreement-cum-Appointment Orders is arbitrary and unlawful. So, Chetan Kumar, send a notice for payments accordingly and if no response file a suit.


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