First of all HAPPY HOLI to all the HR out here.
my question is can a company reduce salary of a employee on non performance ground with out any notice or letter.
which law applicable in this regard if a person is in the asst. manager level and salary is around 30k.
From India, Calcutta
my question is can a company reduce salary of a employee on non performance ground with out any notice or letter.
which law applicable in this regard if a person is in the asst. manager level and salary is around 30k.
From India, Calcutta
Hello
The basic principle to be followed while taking any disciplinary action with an employee is that he should be given enough opportunities & reminders before any such step is taken. The idea is to bring in the principle of natural justice alive. If after several reminders & opportunities (in written & oral by the supervisor or the management) proves futile, any such negative action can be taken. However he / she should be given a fair idea what the consequence would be.
There is no legistlation governing white people employees
regards
From India, Mumbai
5The basic principle to be followed while taking any disciplinary action with an employee is that he should be given enough opportunities & reminders before any such step is taken. The idea is to bring in the principle of natural justice alive. If after several reminders & opportunities (in written & oral by the supervisor or the management) proves futile, any such negative action can be taken. However he / she should be given a fair idea what the consequence would be.
There is no legistlation governing white people employees
regards
From India, Mumbai
Hi,
I agree with Sunil.
An employee must be given a chance to improve through verbal / written counselling.
However despite all your efforts if things don't work out, then it is better to relieve him
from the company, rather than reduce the pay.
I seriously doubt about what the person can perform after his pay has been slashed.
Why hold on to him. Why not replace him??
From India, Delhi
I agree with Sunil.
An employee must be given a chance to improve through verbal / written counselling.
However despite all your efforts if things don't work out, then it is better to relieve him
from the company, rather than reduce the pay.
I seriously doubt about what the person can perform after his pay has been slashed.
Why hold on to him. Why not replace him??
From India, Delhi
Hi Friends,
When you hire any employee you give him first offer letter and than appointment letter. Both these letters are contract between employer and employee. Compensation is the part of these contracts. Any modification in this document needs the consent of both the parties. Hence when you revise the salary you give him salary revision letter. In same manner when you down grade the employee salary you must give him a written communication along with the explanations for the same. Any surprise reduction in the salary will without the consent of the employee may result in unnecessary legal complications.
Regards,
CS Mukesh Tank
From India, Mumbai
When you hire any employee you give him first offer letter and than appointment letter. Both these letters are contract between employer and employee. Compensation is the part of these contracts. Any modification in this document needs the consent of both the parties. Hence when you revise the salary you give him salary revision letter. In same manner when you down grade the employee salary you must give him a written communication along with the explanations for the same. Any surprise reduction in the salary will without the consent of the employee may result in unnecessary legal complications.
Regards,
CS Mukesh Tank
From India, Mumbai
Hi,
It would be interesting to know what are the implecations of reducing salary on statutory benefits like PF. If I'm not mistaken, PF contributions cannout be reduced by the company. Reduction of salary on grounds of non-performance and hence reduction of PF as a linked component is valid in legal perview?
Regards,
Sovan
From India, Calcutta
It would be interesting to know what are the implecations of reducing salary on statutory benefits like PF. If I'm not mistaken, PF contributions cannout be reduced by the company. Reduction of salary on grounds of non-performance and hence reduction of PF as a linked component is valid in legal perview?
Regards,
Sovan
From India, Calcutta
Dear Sovan,
Reducing wages/ salary as part of punishment for non performance and deducting Provident fund contribution (as also ESI contribution or welfare fund contribution) from the salary are two different things. The former shall be done after following a procedure, say performance appraisal followed by issuance of letters requiring the employee to improve, issuance of show cause notice to explain why action of reduction to lower scale of pay should not be initiated, conducting an enquiry, if required, etc are carried out.
On the other hand, deduction of statutory contributions from salary, like PF, ESI, etc is permitted even if it is not mentioned in the appointment order. Not only EPF or ESI, any deduction permitted by section 7 of the Payment of Wages Act is legal. Yes, certainly, any amount to be contributed by the employer towards these social security schemes should not be deducted from the salary.
Regards,
Madhu.T.K
From India, Kannur
Reducing wages/ salary as part of punishment for non performance and deducting Provident fund contribution (as also ESI contribution or welfare fund contribution) from the salary are two different things. The former shall be done after following a procedure, say performance appraisal followed by issuance of letters requiring the employee to improve, issuance of show cause notice to explain why action of reduction to lower scale of pay should not be initiated, conducting an enquiry, if required, etc are carried out.
On the other hand, deduction of statutory contributions from salary, like PF, ESI, etc is permitted even if it is not mentioned in the appointment order. Not only EPF or ESI, any deduction permitted by section 7 of the Payment of Wages Act is legal. Yes, certainly, any amount to be contributed by the employer towards these social security schemes should not be deducted from the salary.
Regards,
Madhu.T.K
From India, Kannur
Dear Sovan
To reply to your answer & start from where Madhu Sir had left, Basic salary of a person if reduced without any valid reason / proceeding itself is not allowed in the as the PF component will be effected. However if the Salary (& as a consequence Basic salary) has been reduced following the legal route as explained by many in this thread, there would be no legal complications.
From India, Mumbai
To reply to your answer & start from where Madhu Sir had left, Basic salary of a person if reduced without any valid reason / proceeding itself is not allowed in the as the PF component will be effected. However if the Salary (& as a consequence Basic salary) has been reduced following the legal route as explained by many in this thread, there would be no legal complications.
From India, Mumbai
The very important consideration is being missed out here. The designation of Asst. Manager does not prove that the employee is a white colar employee. The Hon'ble Supreme Court in the series of the judgements has made it very clear that it is a nature of work that decides the status of an employee as whether 'Workmen" or "Manager". Section 2(s) of The Industrial Disputes Act 1947 is very clear on this aspect. If an employee can prove that he/she is a workmen then the disciplinary action can be taken only within the boundries of Model Standing Orders. The Standing Orders provides warning, fine, suspension not exceeding four days and dismissal without notice. If any other action has to be taken, the organisation must have its Certified Standing Orders in which the provision of reduction of salary must be mentioned as one of the punishment.
From India, Mumbai
From India, Mumbai
Even if an employee is not coming under the definition of workman or is not a workman as per the definition of the certified Standing Orders of the company, you can not initiate a punishment without giving him an opportunity to prove his innocence. Doing so is denial of justice and against the principles of natural justice.
An Asst. Manager, as stated by Manish, need not come under Managerial or Supervisory cadre. If you follow the Apex Court's verdicts, employees authorised to sanction leave to his subordinate, or auhtorised to initiate disciplinary action against his subordinate or authorised to appraise his subordinates are those employees who will be left out of the purview of the so called definition of workmen. Though for these category of employees, the contract of employment will be the deciding deed, the core of HR should not be ignored and that is natural justice.
Regards,
Madhu.T.K
From India, Kannur
An Asst. Manager, as stated by Manish, need not come under Managerial or Supervisory cadre. If you follow the Apex Court's verdicts, employees authorised to sanction leave to his subordinate, or auhtorised to initiate disciplinary action against his subordinate or authorised to appraise his subordinates are those employees who will be left out of the purview of the so called definition of workmen. Though for these category of employees, the contract of employment will be the deciding deed, the core of HR should not be ignored and that is natural justice.
Regards,
Madhu.T.K
From India, Kannur
Dear All HR HUNKS out here. immensely thankful to all the member responded to my query.
now the situation is quite different. even after the deduction of the salary person stays in the company and started performing. but the management is ignoring it and not showing interest in reverse the decision of salary deduction.
From India, Calcutta
now the situation is quite different. even after the deduction of the salary person stays in the company and started performing. but the management is ignoring it and not showing interest in reverse the decision of salary deduction.
From India, Calcutta
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