I am working as a Business Development Executive in an IT and Software company. The company is a Private limited firm registered in Ahmedabad, Gujarat. I have resigned from my position and the notice period that I have to serve is 60 days from the date of resignation. The company's HR policy says that after resignation, the salary for 2 months will be on hold and will be paid in the next billing cycle. Now, I have a lot of financial responsibilities and can not wait and work for 2 months to get my salary credited. Is the company legally bound to release the payment monthly and not hold salary during notice period? I am willing to serve the notice period, but not at the cost of delaying the payments by 2 months. Can you please advise/guide/help the best way to solve this situation? If there is a law, where do I find it?
From India, Ahmedabad
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Dear Ravib Saha, You consult the local/district labour office to lodge a complaint under payment of wages act for not disbursing wages. What your company’s HR policy says is not the law?
From India, Mumbai

It is a matter of only two months. I would suggest that you should follow the company policy in this matter due to various reasons.

First of all, if you have at least one employee under you to report to you you will not get the protection of labour law/ payment of Wages Act or Industrial Disputes Act. The complaint will be rejected saying that you are not a workman under ID Act.

Secondly, if you are not leaving the company to do a business of yourself, it is not fair to make the previous employer annoyed for all legal action initiated against him. The industry being IT & ITES and the employers' association being very active, it is easy for any other company to know what has happened between you and the company. This will spoil your career.

It is true that holding salary is not permitted even in the case of a manager/ supervisory employee. You can have a negotiation on it and you can say that last month's salary may be kept on hold to be released along with F&F. That is fair also.

From India, Kannur

That employees of the IT Sector are covered under the ID Act, 1947 and have the right to form trade unions. This development has caused consternation in industry circles which believed that the IT Sector was outside the ambit of this Act. Obviously, for some reason, the IT Sector has been misinformed of the correct position under the law.

In the current state of the controversy it is necessary to illumine the rights of the employees and correct legal position. Except for supervisory or managerial level employees, all other employees are considered as "workmen" under the ID Act if they perform any manual, skilled, unskilled, technical, operational and clerical work. Even as recently as 2016 the Supreme Court in Raj Kumar Vs Director of Education re-iterated that its leading judgement in H.R Adyanthaya Vs. Sandoz (India) Ltd. in 1994 is decisive on the issue of who is a "workman", and succinctly re-stated the ratio that "a person to be workman under ID Act must be employed to do the work of any of the categories, viz., manual, unskilled, skilled, technical, operational, clerical or supervisory. It is not enough that he is not covered by any of the four exceptions to the definition. We reiterate the said interpretation."

From India, Mumbai

I am one among the many contributing members of this forum who repeatedly insist that whenever employment related issues are raised, the questioners should furnish the complete details of their employment particularly their capacity of employment i.e., workman, supervisory or managerial, present or last drawn salary, length of total service, exit clause of the contract of employment in case of resignation etc. Unfortunately, most of the questions are cryptic or devoid of the essential particulars in which situation appropriate answer cannot be given based on presumptions.

Coming direct to the question, if the poster falls within the definition of workman u/s 2(s) of the ID Act,1947 and his monthly salary is Rs.24000/= or less he can file a claim u/s 15 of the PW Act,1936 against the with holding of the two months salary for the notice period. Otherwise, he can institute a Civil Suit against the employer for breach of the terms of the contract pertaining to payment of salary for with holding of notice period salary is a condition opposed to public policy u/s 23 of the Indian Contract Act,1872. Any how, both would be time consuming and affect his future career as suggested by Mr.Madhu.

Under these circumstances , it is better for the poster to approach the top management and try for an amicable settlement on the lines suggested by Mr.Madhu.

From India, Salem

Dear Member, I am fully agree with the views expressed by Mr. Umakanthan M.
From India, Gurgaon

Hello Ravibshah,
Further to the realistic suggestions given by Madhu TK & others, pl also note that legal recourse for all such disputes ought to be the last resort mechanism--for the simple & practical reason that any Company is far better placed to fight a legal case than any employee....in terms of finances & time & effort.
Filing a case--be it a civil suit or otherwise--is but just the first step. There's a long way to go in India before any decision can come out.
And in the meantime, like Madhu TK mentioned, it's YOUR career that CAN be effected. THe Company will find some other guy. But you finding another job will be tougher.
All the Best.


From India, Hyderabad

In My View,amicable settlement of the said dispute rather an issue is the best way to opt for.
Every company has its policies and they also do have people to recomend and excercise some exceptions , like in your case to relax on to payment options. Its not big deal for company management to consider your case if you have nice exemplary service record.
Put your best and genuine reasons to management to consider your case on human grounds etc.
Fights and dispute at professional levels has far reaching impact on both company and employee.
Our Learned memebers have been guiding the employees with care and with in the professional and legal frames. Thanks to all.

From India, Vadodara
Taxblock India Pvt.Ltd

Hey Ravibshah
According to the minimum wages act, a statutory fixation of minimum rates of wages in the employment where
sweated labor is prevalent with the possibility for exploitation of unorganized labour. In all possibilities, they can't deny your payment for the period of work you do for them.
You can complain about this in writing in 4 copies to Assistant Labour Officers, Asst. Commissioners of Labour, Deputy Commissioners of Labour and Joint Commissioners of Labour as Inspector of your state.
For any further you can refer us at https://taxblock.in/
Adv. Shivam Kumar, Legal executive, Taxblock India Pvt. Ltd.

From India, Pune

Hi, My answer to your first question is NO, An employer cannot hold the salary of an employee for two months whatever the reason may be.
If your company has such a policy check whether you have signed any document in effect of it, though it is illegal and unethical.
Any way facing lot of financial hardships and you may suitably take up this issue with your management and resolve it as all other options are time consuming and may not help you if you are looking for an employment elsewhere.

From India, Coimbatore

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