Is It Mandatory for Employers to Give Annual Increments Despite Poor Performance or Financial Strain?

Respected friends,

Kindly clarify, an employer chooses not to give any annual increment to certain workers on the grounds that either a) their performance is far from satisfactory or b) the company's financial position is so bad that they cannot pay any increment. The affected workers' salary is below Rs 6000 per month per worker. There is no trade union in the company. Is it mandatory that a certain increment must be given to the workers? If so, kindly indicate the section and guidelines in this regard.

Regards,
Sr. Laksminarasimman

Dear Mr. Laksminarasimman,

Increments are not to be given compulsorily by the management. If a time-scale wages structure is specified in the appointment letter, then it will be given compulsorily to the employee. If there is no settlement with the employee or the union regarding wage increases, then no increment will be given.

Regards,
R.N. Khola
Skylark Associates, Gurgaon (Haryana)
(Labour Law & Legal Consultants)