Dinesh Divekar
Business Mentor, Consultant And Trainer

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Hello everyone,
I need suggestion / advice on following
One of our employee is on probation (under training period) requested for a company letter(specifying salary on it as payslip doesn't get generated for probationary employees they get consolidated stipend pm) for home loan. As a HR shall we mention that employee is on probation or not?
does it creates any problem wrt labour law.
Urgent. pls reply.

From India, Pune
Dear Sunetra,

The confusion has arisen because your company has not understood provisions of Shops and Establishment Act or Factories Act, as applicable.

Once the employee comes on board, right from first day onward, he/she is eligible to get the salary. There, is nothing like "stipend". Secondly, once the employee joins, whether to allot status of probationer or a regular employee is the internal matter of your company. It is out of purview of statute. Issue of wage slip to each employee is mandated by Shops and Establishment Act or Factories Act, as applicable. Both the acts do not differentiate between probationer or regular employee.

As far as advice to the employee is concerned, I recommend him waiting till he becomes permanent employee. He can avail of the home loan facility after becoming the permanent and not during probationary period. What if his performance is not up to the mark and if he is required to be removed from the employment? Loss of employment with burden of home loan could come as double whammy to him.


Dinesh Divekar

From India, Bangalore
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