Anil.arora
Administration Head
Sanjeev.Himachali
Hr & Od Consultant
Svsrana
Hr Head With Pmi
Tajsateesh
Recruitment/talent Acquisition, Career Counselling
Kknair
Hr, Ir, Law, Disc. Matters
Munnabhai1971
Sr.executive Hr
Viswa1945@gmail.com
Production & Operations Management, Quality
+4 Others

One of the key roles of HR is – Compliance.
In light of current financial and salary crisis in Kingfisher Airlines, where the salaries for the month of February and March are still pending, my questions for discussion are:
Can HR be prosecuted for non-payment or late-payment of salaries?
Can HR be prosecuted if the salary cheque gets dishonored?
In such situations, what are the remedies for HR Pros?
Kindly share your views.
Regards,
Sanjeev
25th May 2012 From India, Mumbai
Hello Sanjeev,

That's a good topic.

I am not sure if HR, per se, can be prosecuted, since any case filed by employee(s) will be ON THE COMPANY & not on a specific individual. The individual--in this case the HR executive--is only processing the salary and the Finance executive is passing the instruction(s) to the Bank for Salary disbursement [or giving the cheque, as the case may be]--unless, of course, there is a clear prima-facie evidence of the HR person [or Finance guy or any other functionary] playing mischief or acting with a willful malicious intent @ the individual level.

However, whatever the HR person(s) may think or do, they are after all a part of the Management & they are bound to take the flack in the situations you mentioned [KFA]--sort of a 'occupational hazard' so to say. The same would apply, I think, to any individual who is part of a team/crowd handling a situation, be it a cricket team or even the government. how many officers are attending the court cases on behalf of the department concerned, even though he/she wasn't even present @ the scene when the 'crime' or 'situation' occurred?

In a nutshell, even though HR professionals or department can't be held responsible for the situation [with the exception I mentioned above], they invariably end-up holding the baby & handling the fire-fighting exercise. But at the End of the Day, the buck stops with the Top-boss.

Rgds,

TS
25th May 2012 From India, Hyderabad
Can HR be prosecuted for non-payment or late-payment of salaries?
No because that is the decesion of the management not individual's
Can HR be prosecuted if the salary cheque gets dishonored?
No becuase that is processed by finance department not by HR
In such situations, what are the remedies for HR Pros?
No situation is pending for remedies :)

25th May 2012 From India, Gurgaon
Few things are really important and common in this case which we need to keep in our mind while discussing this case….

“SALARY, CONDITION OF COMPANY and CONFLICT”

Let me start with a question.

Is there any employment t&c any employer is using which can allow any employee to prosecute HR if found not able to pay salary to employee in this kind of situation/crises. Neither employee nor employer wants to have this bad condition.



Second, we use a clause of “Notice Period” for a special purpose (for both Employer & Employee) but never use anything like if HR/company is not able to pay salaries to employees in this kind of conditions, employee can take legal action against employer. Also everyone who is working under Organization is an employee of company, whether is from HR or Accounts or any other department, and departments are not an individual entity which can be prosecuted for some reason. I fully agree with TS and Gurgaon HR.

HR is not directly responsible for not paying salaries to employee where Finance & Accounts department is responsible for all financial activities (Fund Availability) and responsible for fulfilling the requirement of HR to pay salaries to their employee then why only HR be prosecuted??

This is an extreme situation where company and employees all are well aware of this worse condition of company and that they are not even able to pay salaries to employees but it’s not as they have denied paying salaries to employees.
25th May 2012 From India, Gurgaon
let me share an incident:
everyone has seen people who try to play second fiddle to bosses...
in one such company, the personnel manager gave a suggestion for delaying salaries to staff...and the owner was more than happy..
however one particular employee who was facing hard circumstances committed suicide...
the manager got saved because of the system but wrong advise cost someone his life...
25th May 2012 From India, Delhi
Mr. Surya, is that the advice has given to the Owner while crisis?
We are talking about the crisis/bad condition of company where the situation demands to hold salary. To hold salaries for sometime meant to save fund so that company can manage the financial situation of Company to survive.
Second this is really wrong and not acceptable if one does that with whatever reason while there is nothing like circumstances bother the company financially.
You can also imagine the internal and external situation of this company.
25th May 2012 From India, Gurgaon
In this case, we are discussing about...bad financial condition of the company and lack of funds....they have not DENIED the payment...; they have delayed the payments. It is different.
25th May 2012 From India, Mumbai
mr arora
its true
and there was no crisis.
i have seen hr managers in small concerns increasing their goodwill in the eyes of the boss by paying least amount of money be it gratuity/ notice pay/ allowances/ incentives etc while firing people.
25th May 2012 From India, Delhi
in that case the personnel who have done this wrong to their employee and just to impress his boss or with whatever reason is at wrong path and one day will repent in his doing. Also this can be the reason of uproar in the organization by employees which can also ruin the image or company in the market consequently they gonna pay alot.
Also if employees found this kind of case, can make a complain to local labour commissioner/inspector anytime in written.
25th May 2012 From India, Gurgaon
Very good Topic Sanjeev.....Mr.TS & Anil have made it very clear..Even though i am late the HR's are also the Employees of the company do you think HR's will get salaries if the whole company is delayed so the same applies for HR as well.....If the company is sick unit they may opt for lay-off, lockout, closure it cannot be done once the employees salaries are settled......
Can HR be prosecuted for non-payment or late-payment of salaries?
HR"s cannot be prosecuted only the Management should be prosecuted
Can HR be prosecuted if the salary cheque gets dishonored?
No the Authorized signatory who is giving a cheque where no funds are available (Again the Authorized signatory for signing in cheque will be Director atleast)
I hope all your queries have been cleared and please let us know if there is some other query on this...
Regards,
Ramkishore
26th May 2012 From India, Bangalore
Dear all !!!! The penal action regarding delay in payment of wages is covered under the Payment of Wages Act 1936. Section 3 thereof states that the employer shall be responsible for payment of wages to the persons employed by him. The Act further specifies that in case of factory it shall be the Factory Manager as per Factories Act 1948, in case of industrial or other establishment it shall be the person responsible for supervision and control of the establishment (as in the case of Airlines) . The Inspector under the PW Act has the authority to file complaint against the person whom he feels is responsible for payment of wages. Hence the HR Manager who exercises supervision and control can be made liable for default.
Regards
KK
26th May 2012 From India, Bhopal
The subject is the prosecution of HR for certain lapses as cited in the topic for discussion such as dishonour of cheques or late payment of salaries. it means it hints at some action against an erring individual under some law. The topic thus has legal import and needs tobe answered from legal perspective but not from moral or ethical perspectives. When an act attracts the penal provisions of any particular Act, it is a settled position in law that the penal provisions of the said Act need to be interpreted strictly but not liberally or broadly so as to caste a wider net to involve every one. The labour laws normally envisage an action agaisnt an employer for breach of provisions of an Act. The relevant labour law which is breached defines as to who is an employer.

Usually,an employer is defined under labour laws as some one who wields the ultimate control over the affairs of the establishment. For example, for breach of the provisions of the Factories Act, the occupier is the one who is under the ultimate control of the affairs of the factory and thus for this purpose, the board may nominate one of the directors as the occuier. In such a case, action lies against the said director for any breach of the provisions of the Act but not on any individual officer.Therefore one needs to figure out who is the entity who has the ultomate control of the affairs of the comapny under the particular labour legislation.However an individual officer can be held liable only when the occupier or the employer proves that he has issued instruction for complying so and so provision but he did not obey his instruction.

The case of dishonour of cheques may attract the penal provisions both under the Negotiable Instruments Act as well as under a labour Act like the Payment of wages Act or the Minimum Wages Act. The accountabilities need to be established under the respective Acts on the above lines. I have not gone through the provisins of the Negotiable Instruments Act and therefore Iam not able to comment on fixing the liability for dishonour of cheques if the same is issued by a company. Normally the principle in such cases is that the courts in criminal proceedings lift the corporate veil to find out the person who is respnsible for the said cheque.

B.Saikumar

HR & labour Law Advsor

Mumbai
27th May 2012 From India, Mumbai
Dear Sanneev,
The answer of your quetion is "No" Kingfisher Airlines is a transport service provioder and it comes under the purview of Shops & Estblishment Act.Because all the emplyees surely getting more than 10000/- PM they could not come under the purview of the Payment of wages Act.It is then certainly to be follwo the condition of appointment letter under the purview of Indian Contract Act.For this you could not procecute HR because he is no where in the agreement contract.
You can file a complaint against the contracting authourity only.
Mangesh Wakodkar
Aurangabad

27th May 2012 From India, Pune
It is an emphatic "NO" HR person is also an employee of the company and any law suit is against the company and so the top man either CEO or MD is answerable to legal points.
27th May 2012 From India, Hyderabad
I do agree with the compliance part and that is why I mentioned it in the beginning of the question.
I also think that this is also where most of the HR people get it wrong. In many companies, the financial health of the company is not shared with HR department. It is considered as confidential. Therefore, if the management of the company comes-up and says that they do not have sufficient funds to pay the employees. In such scenarios, there is hardly anything that the HR can do.
We do not have the money to pay; however, we need to retain the people so as to end the crisis ASAP. This is a very tricky situation. HR does not have control over finances of the company; HR does not control over the clients and their payments and HR does not sign the salary cheques. In such scenarios, how can they get prosecuted? They cannot be, even though they are the ones to sign the offer and appointment letters.
Regards,
Sanjeev
28th May 2012 From India, Mumbai
All departments come together and make a company”. They all are connected to each other, and directly comes under MANAGEMENT who controls them and responsible for all good and bad things.
Agreed and we all knows that HR has nothing to do with this kind of situation and can’t even avoid it and are not responsible for Fund availability but Management (Finance directly under Management). Acceptable that finance on many terms never disclose the financial situation of a company/organization to other department but to Management who Management is directly responsible for this but truth other face of this is that no one (Management, Employee, Client or other) wants to have this crisis situation and helpless if found in it.
Concern is acceptable and solution, we all well aware what we should do or what not
[Can HR be prosecuted for non-payment or late-payment of salaries?
Can HR be prosecuted if the salary cheque gets dishonored?
In such situations, what are the remedies for HR Pros?]
So far we have discussed the main query/questions at length and I believe the answer has already been acquired.
28th May 2012 From India, Gurgaon
sanjeev,
let me narrate an incident...
several yrs back, i got an offer as compliance head from a big indian cos.. the hiring manager dint tell me that people dont get salaries on time n position is time...
by a stroke of luck, due to distance/ extended timings, i refused to join...
3-4 months later the same guy called me for help..
there are several times when the viability of an individual rank is questionable.. even entire divisions fail... and we have to keep mum...
purely for info, there is a body named "advertising standards council of india" which can penalise misleading ads (recruitment related too)
28th May 2012 From India, Delhi
Generally, Works Manager(Incharge of Unit ) and the Occupier are prosecuted under Payment of Wages Act for non-payment of salaries on date.
However, by discussing the matter with Unions , arranging for part payments / advances a way can be found out .
28th May 2012 From India, Pune
Hi,
Every employer appoints a person responsible for payments of pay and allowances to employees. Same is the case as per the Payment of Wages Act. Hence, in given situation the responsibility for delayed payments or dishonoured cheques will lie on the person so notified for the purpose. In case it is HR it is responsible in discharge of his official duties. Other discussions immaterial.
Regards
S.K.Johri
28th May 2012 From India, Delhi
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