Can Resigned Sales Executives Claim Salary Without Business and Offer Letters? What Actions Can Be Taken?

Hi Seniors!

I worked for an organization where there is a sales process, and executives are supposed to bring in business for the company. Last month, they did not generate any business, so are they eligible to ask for their salary if they have resigned? Moreover, the company has not provided offer letters to the employees; they have only given a Letter of Intent. They also do not issue any salary slips as they are new in the industry.

If the company does not provide the salary, what actions should be taken against them so that the candidates can receive their salaries, especially since all of them are outstationed candidates?

One more thing I would like to ask is if there are any required qualifications for a Managing Director, or can a 12th pass-out become a Managing Director?

Please answer immediately.

Thank you,
Bhumika Kaur

Dear Friend,

The contents of your letter of intent may be useful to answer your question. Whether the employees were engaged on a commission basis or a salary basis?

Further, there is no educational qualification prescribed under the Companies Act for becoming the managing director of any company.

Regards

Thanks, but in the Letter of Intent, nothing is mentioned apart from the documents that were supposed to be submitted on the date of joining, and all of them were on a salary basis.

Dear Friend,

If it is so, then the employer has to pay the salary as agreed, provided there is no clause of conditional payment in LOI.

Regards

Hi,

I also faced the same situation; my company paid salary because the company considered their service to their existing customers. Also, those employees resigned only after taking their salary.

Hi,

That is the reason salespeople are given a 40% fixed salary and a 60% variable salary depending on achieving targets or vice versa, or as negotiated during the hiring process for a sales profile. However, not providing any salary at all just because someone failed to generate business is unethical and illegal. The person has invested time and effort; if you don't provide a salary, it means the person has simply wasted their earning potential and time on your company as charity.

Receiving an appointment letter is the basic right of any candidate. These kinds of issues arise when a company engages in unfair business practices and begins questioning if someone is deserving of a salary after utilizing their services for a few months. As an HR professional, it is essential to rectify such processes. While one may not expect much maturity from a director who has only passed the 12th grade, a company thrives longer with fair business practices. This is something that may need to be explained to the Managing Director with maturity and tact.

Thanks,
Geeta

Dear Bhumika,

The organization is not providing appointment letters, not paying salaries, and refusing to conduct full and final settlements for employees. What is the HR department doing in this situation? When you hire an employee, you are obligated to pay their salary. You cannot withhold an employee's salary by simply stating that they are not generating business. By doing so, you are violating the provisions of the Payment of Wages Act and putting the organization at risk. According to the Industrial Disputes Act, you must settle an employee's dues when they resign or leave the organization. Failure to comply with the laws of the land can lead to legal troubles. It appears that your HR policies are chaotic; it is crucial to address and resolve these issues promptly.

For more HR-related information, visit: White Eagle

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*I have corrected the spelling and grammar errors while maintaining the original message's meaning and tone. I have also ensured proper paragraph formatting with a single line break between paragraphs.*

Hi, I was a Senior Training Manager with the organization. They have a girl in the HR department who doesn't have any knowledge regarding HR policies. I don't know what's going to happen if they do not give salary to my team. Can they send them a legal notice?

I'm a fresher and I'm alone working as a HR person in my company, so, I would like to clear few doubts from senior members like youJ.

I'm working for a marketing company, since we are in to marketing, candidates will join and immediately leave with in 2days/a week/ some times till they receive their first month salary. if we give them any appointment letter and complete their joining formalities on the first day itself, wont it be a problem for the company when the new candidate stop coming to office in single no. of days?

Please guide me, because we are not giving any Appointment Letter on the day of joining.
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Hi Akshaya,

I would like to tell you that an appointment letter is a proof that confirms your permanent status within the organization, and typically, companies issue it within 3 months. Do you provide offer letters at the time of selecting a candidate? The documentation should be completed on the first day of joining as this is a method to get to know the person you are hiring, so that should not be a problem.

Hi,

You provide an offer letter when you close a position. Based on the signed acceptance of the offer letter from the candidate, you provide the appointment letter (which includes more detailed terms and conditions along with salary details). Whether someone will stick with the company or not is a different issue, but when someone is joining, you must give them the appointment letter and accept their signature on the duplicate copy. This is the minimum you do on day one. If someone leaves in 2 days, a week, or a month, you need to delve deeper into such quick exits from your company. You may not release their salary, there is no need to provide an experience letter, and no need to give a positive reference if someone calls for a reference check. However, not issuing an appointment letter is not the correct way to address this problem.

Thanks,
Geeta

Hello bhumika
No, we are not giving any Offer letter at the time of joining.
Here, we tell the candidate that he will be on training period for 03 months and another 06 months on probation period. 1st 03 months we will see weather the candidate will stay or not, based on this remaining things are decided. One more thing is, here I have seen employees collecting Offer Letter along with the Reliving Letter.
Documentation means what and all it includes?
Here I take Employee family details, His blood Group details and educational and past experience records with 03 passport size Photographs and ask them to fill the PF form 2. Other than this I'm not taking any details from them. Please tell me what else should be documented other than this.

As per your email, if the particular company didn't provide any kind of offer letter to them, then as per the rules, they are not properly an employee of the organization, whatever they have a letter of intent but they do not have proper validation of the job. It means they are covered under daily wages or off-roll kind of employees. The concept of no sell, no salary is only applicable to freelancers or those employees who work as agents or off-roll. In these cases, they have to communicate on mutual coordination with the employer or management. Otherwise, if they have any kind of attendance record in the muster, then only they are eligible for a salary.

Now, about your second question, there is no boundary for any talented and experienced candidate to achieve a high designation. Yes, some kind of degree is definitely required, but if the management is okay with all situations, then there is no harm in that.

Hope I have helped you from my side.

Regards,

Pooja

Geeta Mam,

I completely agree with what you said, and that is exactly what I understood when I read other threads in the forum. However, I am facing a few problems when trying to implement this. I am not in a position to suggest anything as my boss always says, "Your bookish knowledge will not work out in practical situations." If I bring up topics like working hours and confirmation letters, he labels me as a union leader.

I work in a small company with 40 employees across 4 locations. Each team consists of 6 to 8 members led by a team leader. During interviews, the Managing Director finalizes the candidate and instructs the Team Lead to onboard the new hire. Sometimes, I am unaware of new hires, salary increases, incentives, or team transfers for up to 2 days. When I raise these concerns with our MD, he insists that such matters should be discussed with the Team Leaders. Unfortunately, most Team Leaders do not adhere to HR protocols.

I lack educational records, driving licenses, or blood group records of our Team Leaders. Despite their business acumen, Management is unable to enforce any regulations on them. There is no structured process for position identification and closure. Anyone can refer a candidate directly to the MD, leaving me to handle the candidate as a receptionist and guide them to the MD.

If I provide positive feedback on an employee who is subsequently hired, any issues that arise are directed towards me. Employees are not required to serve notice periods when resigning. If the MD or Team Lead discovers that an employee is job hunting, the Team Lead informs the MD, who instructs me to inform the employee not to return to the office the following day. The company shows little concern for employee positions.

During the accounts closing in March, both Accountants were removed. I was the first HR person hired and initiated processes like maintaining service files, assigning Employee codes, and formatting Offer and Appointment letters. While activities such as attendance management and leave notifications have improved, I still face challenges with issuing Appointment and Offer letters. I often feel dissatisfied with my daily tasks. What should I do in this situation?

Dear Bhumika,

I don't understand the motive behind your post.

All I can say is, I am aware of many such organizations that go by the name of Company, as they fulfill the requirements under the Companies Act; where the chairman and Directors may even be illiterate, though officially they are called "self-learned"; who run the organization as a Middle Ages fiefdom; treat their employees as slaves; do not believe in any documentation such as Appointment letters etc; where HR serves the purpose of being their spy who would report their espionage activity in the evening - detailing on who said what to whom; and in such an organization it's surely possible that they will not give any salary to salespeople if they do not achieve certain sales.

The answer to all your queries is: There are organizations where - "anything goes". But no good organization, worth their salt, would indulge in such 'baniyagiri' kind of activities.

If you are an employee of such an organization, my fervent suggestion is to find another job immediately.

You cannot change the company or the world, but you can definitely change yourself, and the first step is to change the job.

Regards.

Well, the good news is that I have already resigned from there, but I am only concerned about my team's salary.

Thank you for your sincere suggestions,

It is my first job, and I've been here for 1.5 years. When I joined, I found things challenging and was determined to make some changes before considering leaving. I accomplished that goal. However, I now feel like I've lost my confidence and courage to face new challenges. I don't excel in any specific area of HR as one would expect after working for 1.5 years. How should I approach finding a new job? Please guide me.

Hey Sharadha,

Don't despair, dear! For 1.5 years of experience, not much is expected. Maybe you should be good at keeping time in the office, i.e., attendance, understanding leave policies, rules, in recruitments - screening resumes, and doing initial interest checks. A good understanding of basic policies in any company.

Jobs are scarce in the market, if you find one, don't be shaky; the whole Cite HR community will back you up to clinch it. That assurance I can give you from my experience on this site!

To gain confidence, I will say just go through all the posts to the extent you understand, mainly the practical experiences, views, and opinions of people. That will definitely help you to regain confidence, and I assume you have the required theoretical knowledge.

If you are in a good job, you can start posting all your operational issues afresh! 😄 Be assured you will be spoilt for choice on what should be your best course of action.

Wish you all the best!

Geeta

Dear friend,

They have to pay the salary if the notice period is not mentioned anywhere in the LOI. Getting business is a separate issue. Did they attend the office? If so, there is no doubt they have to pay. Getting business is a part of their performance. If they are not performing, then the fault lies with their supervisors, team leaders, or management. There are many factors we have to consider.

Sanjeevi

Thank you, madam,

After reading your options, I analyzed myself, and I feel I'm good at screening and conducting telephonic interviews and scheduling daily/periodical meetings. Sure, I will definitely continue reading the postings that delve into practical experiences.

Actually, I wanted to start a fresh thread and seek suggestions regarding the same, but my screen reader didn't support it, and I'm finding a little difficulty operating it. Anyway, thank you for your suggestions and for starting this thread to Bhumika.

I too have the same problem. I joined a consultancy on 3rd March 2010. We were told that apart from our basic salary, we would be given incentives depending on the number of closures we achieved in the consultancy. The company had set a target for everyone until 8th May 2010 for maximum closures. However, before that date, without giving me any notice or valid reasons, they forcefully made me resign from the consultancy. There are still a few others working in the consultancy without meeting their targets, but I was the only one asked to resign. I was compelled to sit and type my resignation forcibly.

I was given a Letter of Intent containing clauses for the process and salary. It stated that if services are terminated, a 15-day notice would be given in addition to the basic salary. Also, in case of misconduct by the employee, the management can waive off the notice period, but the salary will be given.

I was not even given a 15-day notice period. Now, when I am requesting my salary for the 27 days I worked, the management is refusing.

I am seeking advice on what steps I can take to obtain my salary as they are not responding. When I inquired, they suggested I rejoin them. I worked with this consultancy until 27th April 2010.

Please help.

Regards,
meghchan
Lucknow

It is certain that an appointment letter is necessary, but it does not prove that you are a permanent employee. Instead, it indicates that you are bound by the rules and regulations of the company.

Moreover, it is observed that many companies issue appointment letters after three months to ensure that the employee is suitable and will not leave immediately after receiving their salary. However, this is not a good or professional practice.

I disagree with the notion that if you do not earn for one month, the employer can withhold your salary even though you worked the entire month.

My sister is currently facing a similar situation. She was employed as an HR Executive in the Consultancy department at Hope Hospitality of Hotel Management in Laxmi Nagar. The employer, Ms. Rajni Negi, has refused to pay her salary, citing her failure to generate business or place any candidates, and instructed her to leave on 7th June 10.

I would appreciate suggestions or guidance from my seniors on the actions she can take, considering she has an appointment letter.

Regards,
Rajiv Madan