Arrear amount - unable to release the Incremented salary of month June 18 till date due to some financial crisis of company - CiteHR
Madhu.T.K
Industrial Relations And Labour Laws
Ravi5554
Asst.manager -hr
+1 Other

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Hi, I am seeking for your needful advice related to appraisal which i am describing below.
My Organization doing appraisal on yearly basis which is effective from the month of June of Every year but last year due to some problem from employees end appraisal get delayed & salary of increment amount after appraisal will on disbursed from July 18 & we have written in employee Increment letter that appraisal (Increment) will be effective from 1st of June 18.
But we are unable to release the Incremented salary of month June 18 till date due to some financial crisis of company & some of our employee who have resigned are asking for their arrear amount of salary. So just want to know is it necessary to release the arrear amount or not?
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If you have revised the salary effective from June, you are bound to pay it from June. If you had some financial problem why did you commit an increment? If you had problems you should have postponed the increment. Naturally, some good talents may leave you. Let them leave. But not paying salary or part of it (incremental amount is part of salary) is illegal and violation of contract of service. It applies not only to existing employees but to those who have left service.
Thanks for your reply
We don't have any financial problem at the time of appraisal . It occurs suddenly after from the month of appraisal. Is it still necessary to give the arrear or we can change the Effective date of Increment & revise the Appraisal Letter
Dear Friend,
You mentioned that your company is in financial crisis, do you think your management will be able to pay the outstanding amount?
Payments should be made from June according to the terms and conditions outlined in the increment letter.
Discuss this topic with your management because when the management is not in a position to pay the arrears due to its financial crisis, the suggestion of forum members does not make any sense.
If you have a trade union, you can have an agreement with the Union. But from the post I understand that your company does not have a trade union. In such cases there can be a bilateral agreement with the employees. But it is unethical. Mind that the arrear is part of salary not paid and you have to pay it unless the employees come and submit in writing that they would like to waive it off considering the financial status of the company.
For this thing to happen, you should first of all accept the fact that there is financial crisis. In your first post you said that there was some crisis and due to the crisis some employees left the company but after reading my advise, you changed that there is no financial issue. If there is no financial problem, pay the arrears. Very fine.And if there is problem, be positive and transparent and call the employees and narrate the same in detail.They will agree to it. Take the employees into confidence and accept that they work for us and if you want them to work for us, take them into confidence.
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