Salary Policy During Natural Disasters (Acts Of Nature) - CiteHR
Dinesh Divekar
Business Mentor, Consultant And Trainer
Gopinath Varahamurthi
Mindhour Partner, Ass.professor/adm. Officer,
Consultant In Education, Real Estate, Home
Manager Human Resources (asia)

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Dear All,
I have recently joined a non-profit international organization which deals in animal welfare. Here, I am responsible for framing HR Policies and compliances.
The Organization deals mainly in project-based assignments in different regions.
My queries to the esteemed HR Community is:
In cases of natural disasters, should there be a policy on limiting the salary intake per employee for contractual staff for disaster affected regions?
Ethically, this should not be the case. However, if the work has suffered and funds are mostly based on work associated with the project, how legal / illegal is this stance?
Will look forward for your response.
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Dear Shruti,

You have written that "The Organization deals mainly in project-based assignments in different regions." What kind of these projects are? Have you done project-spend analysis of the past projects? If yes, then what is break-up of material cost, employee cost and other admin costs? If the employee cost is small part of total cost (which generally it is), then will it be possible to forgo the costs arising out of idle manpower (because of natural disaster)?

How many projects your NGO has handled in the last five years and how many times the manpower has remained idle because of the natural disasters? What is the percentage of total project hours against total idle manhours (arising out of disasters)?

By the way, do you employ capital equipment of any kind in your projects? Because of natural disasters, will it not remain idle? Where would you like to assign this cost?

If you are so strict about calculation of costs arising out of idle capacity then in the normal course also some cost involved because of idle manpower or idle machines. What is the percentage of idle hours against total project hours? Do you have records?

I recommend you studying the past projects and then come up with the policy.

Coming to your question on stopping remuneration of contract workers sooner the natural disaster is stuck, you can very well do so. You engage contract workers for the very purpose of easy removal. Nevertheless, there is flip side to "hire and fire" formula too. When the natural disaster strikes and you remove the contract workers, will it be easy for you to re-employ them? What if the get some another job? What if the work suffers because of non-availability of contract workers? Please create account head to record these costs also.

While making the policies, my humble suggestion is to create policy that measures the employee efficiency. Costs are incurred because of poor efficiency of the staffs also. Reduction of cost of this kind should be your primary challenge. Curtailing manpower costs when natural disaster strikes should be secondary or may be even tertiary.

By comments may sound uncharitable. Nevertheless, objective is to enlighten you and not to be mordacious. Please do not take them personally.


Dinesh V Divekar

Dear Sh_Mishra,
In the first instant you are in a non-profit organisation and the flow of fund is uniform. Unless you are receiving the fund the question of taking every action/function is a question itself. You are here mean the Organisation. Thus, the policies are soley with the fund raiser or projects in hand to be executed or projects expected. As said by Shri Dinesh V Divekar it is a matter of facts and not the policies that can be framed. Do not take into heart do the work as it comes. Also, please verify yourself whether all statutory rules are being adhered otherwise.
best of luck..
Dear Shruthi

It appears you are confronted with the number of Contract Workers and the cost of their Salary. Natural disaster may be recurring or non-recurring and depends on the geographical conditions. When we procure Capital goods, its cost can be recovered,provided it is put to use properly.If we fail to use,it becomes an antique piece. Do you have any policy to treat such goods. Human resource can be managed but cannot be treated as goods.

Have you ever seen or studied the life of a contract labour.

For a monthly payment of Rs.15000+ration+living accommodation, thousands of ITI Trained,skilled workers come in mass to South India to work in Sugar Factories,Granite polishing Industry, and in Road and Rail projects. They live in make shift huts, they donot have personal life. This is the plight of contract workforce.At times , if any thing happens, the Contractor will not reveal or report to the Labour Department, thus the dependents lose their earning link.

Therefore for god sake don't try to frame the policy to reduce the Salary of a Contract workers.Instead better to think of re-allocation or rotation by shifting the excess staff to other projects, that comes in your jurisdiction.

Dear Sirs,

Thank you for responding to my thread.

To further clarify, my Organization is into Animal Welfare at the international level.

All other statutory compliances are intact.

But this is the first time, our people are based in Srinagar this year. As you all may be aware, this time the place has been hit by floods. As our projects are well funded, salary issues hardly arrive.

However, my main question (which does not refer to decreasing salaries for staff) is:

If our targets have not been achieved due to natural disaster (in this case, the floods) in terms of sterilization street dogs, are there any laws that could adversely affect us if we do not pay our employees due to this?

I further request the community to keep humanitarian causes aside. Need opinions in case of such a business scenario for future reference purpose.

Furthermore, for common knowledge basis, this time round, we have not only paid the staff salaries but have given an entire month off so that these people can re-build their lives till we resume our project next month.
Dear Shruti,

As a matter of fact, you are going to pay as the contract that exist or the pay is to the project. In case of any particular project could not be done in time in other cases, if insurance is covered the natural disasters is the main cause and there will be no harm provided the terms and conditions or so. Otherwise, this may not have severe effect yet, the time will extended to finish the project within the project cost or the enhanced cost is approved by the competent authority after consultation as the case may be. In your case when you are paying the employees and the cost you bear certainly have impact on the project you have taken or so the project cannot be completed because of natural disaster the project may be extended till further date. Your means and praise with the employees are most important in completing the project both completing the project and employees intact are different things. If you fail to pay the employees that is an issue need be addressed. Contract with the employees is different from the project you are undertaking never get both the things on a single note.
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