How Can I Address My Former Employer's Unapproved Salary and Title Reduction?

Respected Sir,

My former employer, a software services company with offices in India and the U.S.A., reduced my salary and designation in the last month of my employment without formally signing an agreement with me. I worked for this company from August 16, 2005, to April 17, 2009. The salary for the month of March 2009 was reduced by up to 40% without obtaining formal acceptance from me. Additionally, the designation was also reduced.

How did I come to know?

I was not provided with the salary slip for March 2009. As the amount deposited in my bank account was higher than usual, I did not suspect any wrongdoing. I resigned from the company in April 2009 and joined another company in May 2009. I secured this new job based on the salary and designation in my former employment for the previous full year. As part of the routine, my current employer conducted a background check and later questioned me about discrepancies between the salary and designation I had communicated and the information provided by my previous employer during their check. I wrote to my former employer asking for clarification, and he responded by citing the reduced salary and designation.

His reply included the following documents:
1. A covering letter mentioning my reduced salary and designation.
2. An email message from him, supposedly accepted by me, acknowledging the reduction in salary and designation. I do not recognize this email. My employer had the privilege to set up email exchanges between the employees of the company, and I suspect he exercised this option in this case to create this email.
3. A one-sided letter of revision stating the new salary and designation. This document does not bear my signature. The column for the employee signature is blank, and it carries the signature of the HR manager. Once again, I am unaware of this document, as evidenced by the absence of my signature.
4. Salary slips for March 2009 and April 2009. These reflect the reduced salary. I am seeing these for the first time.

Now, I have the Form-16 to prove the higher salary paid for the year and have submitted it to my current employer. I also possess HDFC Bank account statements that confirm the monthly salary deposits matching the higher pay structure.

I want my previous employer to acknowledge this irresponsible act of wantonly understating the credentials in an attempt to hinder my career and, as an honest recourse, provide clarification to my current employer regarding the facts of the employment period. I also wish to claim the unpaid wages for the final month.

Questions:

1. Can salary revisions be done based on email exchanges? Should there not be signed agreements for salary and designation revisions, especially when they involve reductions? All my previous revisions (promotions and salary increases) were mutually agreed upon by me and my employer on formal signed documents. I am puzzled as to why this revision (a 40% decrement) occurred without a formal agreement.

2. The salary was reduced for the month of March 2009, and the email containing the revision was (supposedly) sent to me on the 12th of March 2009. Why was the agreement sent to me on the 12th day of the month when the revision was implemented on the 1st of the month? Once again, I want to emphasize that I do not recognize these emails purportedly sent to me and alleged to have been accepted by me.

Please guide me on the options I have. The dissemination of misleading information by my former employer has fostered an atmosphere of distrust between me and my current employer.

Thank you,

MAHESH

More Information

I was working in the Noida facility. Another point I wish to highlight is that the HR manager was working in the same facility as I was. Is it not necessary for him to get a signoff on the new revised agreement? I was just sitting across his cabin, so there was no geographical barrier stopping him from getting a signoff.

Dear Mahesh,

The first and foremost question that comes to mind is, on what ground is your salary and position reduced? It seems from your post that there wasn't any. If that be the case, then I think this is really unfair on the part of your employer.

Secondly, I am not able to understand how your bank account showed a higher salary figure if your salary has been slashed. I will discuss the options later.

Regards

They were reducing salaries of many employees due to the economic downturn. It was communicated in an all-hands meeting that this was the adopted strategy. However, I did not accept any revisions.

The salary deposited was higher because of arrears (LTA arrears that are paid at the year-end).

Dear Mahesh,

The salary of an employee cannot be reduced for reasons that are beyond the control of both the employer and the employee. Therefore, what happened to you is a clear case of immoral suppression by the employer. I urge you to consult a legal expert and take further action from there.

Regards

Dear Mahesh,

I know I would sound harsh, but yes, the employer has the right to reduce the salary of a "non-workman" unilaterally. The legal response of the other party would be to reject the reduction and indicate an intent to revoke the contract of employment. Since there has been a breach of contract by the employer, the employee could ask for compensation, but he would have to fight the matter in court.

The question of serving out the notice period, if at all, would depend on the specific terms of the contract. Unfortunately, without access to all the details, I would not be able to guide on specifics.

I can only say for sure that you have a good case, and you should be able to satisfy your current employer with the bank documents available to you. Don't worry, not all employers are blind.

Gerry

Hi Mahesh,

Were you covered under Provident Fund, and was your PF contribution reduced after the reduction of salary? If so, it is a contravention under the PF Act. Even if it is not the case, under the ID Act Rule 9A, the employer has to inform the employee of all changes affecting his employment in advance before implementing those changes.

Saurabh

Hi Gerry,

I categorically refused to accept the new terms. I refused to sign the new terms, and that is the reason the 'Letter of revision' does not have my signature. I received this 'Letter of revision' by courier after I left my former employment.

My former employer is justifying the decrement based on an email (forged by him) showing my acceptance of his crooked terms. Please note that this email was allegedly received and responded to by me on the 12th of March 2009. The email mentions the new terms (40% decrement), and the date of enforcement of these new crooked terms is 1st of March 2009.

Is it possible to implement a decrement from the backdate? I don't think so. Like I said, this email is forged and was not received or responded to by me.

Also, should such matters not be agreed upon on paper with due signatures? All previous revisions in this company have been done on paper with the signature of both parties.

I am going ahead with serving him a legal notice. Please suggest a good lawyer or law firm that deals with such cases.

Yes, I was covered under PF, and since it is linked to Basic pay, the contribution for the last month (March 2009) was reduced.

If the company had reduced your salary and made a demotion without your consent and proper acceptance, it is a significant fault of the company management. You can proceed with legal proceedings to address the problem and potentially bring the culprits to justice. It is essential to contact a lawyer and file a petition against the directors of the company with full evidence.

Hi everyone,

Is there any forum provided by the government that can help me? I have already written to the Ministry of Labour and the Directorate of Public Grievance.

From the moment a contracting party proposes a change, such as a salary adjustment, both parties need to reach an agreement, which is solidified by the signatures of the involved stakeholders. Furthermore, these modifications must be settled before any implementation takes place. Failure to do so means the employer has breached the contract, and the HR department has acted poorly or irresponsibly, consequently exposing the institution to risk.

Hi Mahesh,

As per Section 9A of the Industrial Dispute Act, the employer is duty-bound to send a notice of any change in service conditions before 21 days of such a change. Without complying with the requirement of Section 9A, any change by the employer becomes null and void ab initio and inoperative in law. If your service is governed by a contract, then the terms and conditions of your service contract will prevail. However, in that case, the employer unilaterally cannot change the conditions of service. The Honorable Bombay High Court held in a case titled S.N. Kedare v/s Ceat Tyre of India Ltd 2002 LLR 143 that a unilateral reduction in wages by the employer would clearly be contrary to Section 9A of the ID Act. So, dear, you have a very strong case in your hand.

Sanjay Advocate

Hi everyone,

I am currently seeking legal advice. Does the Government of India have a forum for me?

Hi Everyone,

My previous employer has replied back to me by saying that my employment does not come under the Industrial Dispute Act. He says that in the software industry, a notice of 21 days before a change in terms is not mandatory. Please comment on this.

Even if we hold back the ID Act applicability, the employer has even gone against the PF Act, which states that the basic pay of the employee cannot be reduced.

Saurabh

Hi Saurabh, I am going ahead with the legal notice. I want to bring my former employer to justice.

Good luck, Mahesh! Whatever you do, do it with the intent of bringing justice to those who have suffered, not with any sort of animosity towards the previous employer.

Best of luck, Saurabh