Can Managers Earning Over ₹35,000 File Salary Complaints with Labor Offices?

Dear All Senior,

Please update me on the following: Can a manager drawing a salary of more than ₹35,000 go to the labor office and lodge a complaint regarding their salary?

In my company, a manager filed a complaint with the labor office regarding their salary, and as a result, the labor officer sent us a notice. However, it was discovered that the manager had engaged in some financial irregularities in their duties. Could you please clarify what the law states regarding this situation?

Kind regards

Handling Managerial Salary Complaints and Financial Irregularities

Yes, a manager is entitled to claim their salary. You can request the labor officer for an extension of time to reply to the notice. Meanwhile, if you receive a complaint from the concerned department regarding financial irregularity, create a chargesheet and issue a show-cause notice to the manager. Conduct a domestic enquiry by appointing a legal expert in labor laws.

If you are familiar with the procedures and have experience in domestic enquiries, you can conduct the enquiry as a management representative. Once the manager's guilt is proven in the enquiry, issue a dismissal order to them.

Before dismissing, you must establish evidence that the manager is not a "workman" under the Industrial Disputes Act. Otherwise, they can approach a labor court for a remedy. Simultaneously, lodge a complaint at the police station if they commit any "cognizable or non-cognizable offense."

Once you start taking action for financial irregularity, especially if it involves misappropriation of company funds, cheating, or fraud, it will be easier for you as the manager will come to terms with it.

Regards,
D. Pannerselvam

[Phone Number Removed For Privacy Reasons]

Dear Ashok,

The withdrawal of salary for the duty period and the issue of financial irregularity by an employee are two distinct matters. You cannot withhold an employee's salary for the duties performed solely on the grounds of financial irregularities without providing adequate opportunity for the employee to defend themselves.

If the loss is proven to be on the employee's part, you can separately take disciplinary action against them under the Conduct and Discipline Rules of the organization to recover the loss through salary deductions in installments if the employee does not voluntarily repay the amount.

Best regards,

Dear Ashok,

Drawal of salary for the duty period and the issue of financial irregularity by any employee are two distinct issues. You cannot withhold the salary of the employee for the duty he rendered merely on the plea that he committed a financial irregularity, that too without giving him ample opportunity to defend his case. If the loss is proved on his part, you can separately take disciplinary action against him under the Conduct and Discipline Rules of the organization to recover the loss through the salary of the employee in installments if he does not deposit in full voluntarily.

Jurisdiction of Labor Officer

Thank you very much for your reply, sir. Please clarify whether the labor officer has the jurisdiction to entertain his complaint or not, since he is a Manager and not a worker.

Kind Regards,
Ashok

The labor officer is not empowered to entertain the application of a manager who is drawing more than Rs. 10,000 per month. Managers will not come under the Payment of Wages Act. You can simply ignore this matter.

Regards,
D. Gurumurthy
HR & IR Consultant

Dear Gurumurthy,

Irrespective of whether the labor officer is empowered or not, when the labor officer has already sent a notice, should you suggest the company representative not to present before him to contest the case, even to point out that he was not authorized to entertain the case? We should not be merely theoretical to ignore the realities of life.

Regards,

A labor officer is a public servant as defined in various acts such as the Contract Labour Act, Minimum Wages Act, Payment of Wages Act, Equal Remuneration Act, Payment of Bonus Act, etc. In all these acts, the definition of "Workmen" varies. However, in any case, a manager who draws a salary of ₹35,000 is not entitled to any law or act under the purview of a labor officer. Therefore, it is clear that a labor officer cannot intervene in any action by the manager.

These matters fall under the conditions mentioned in the appointment order and the code of discipline of your organization. The appointment letter is based on the Indian Contract Act, which is a civil matter. Hence, this matter can be brought before a CIVIL Court. Here, a labor officer has no authority.

Regarding the Code of Discipline, I am not sure, but this may fall under the Ministry of Labour, and the Labor Office is the authority under that.

Expert members, please correct me if I am wrong.

Regards,
Mangesh Wakodkar
Aurangabad.

I concur with Mr. P.S. Dhingra. Under no circumstances can you withhold the salary earned for the duty done. I also concur with Mr. D. Gurumurthy to the effect that "Labour Officer is not empowered to entertain the application of a manager who is drawing more than Rs.10,000 p.m."

But I beg to disagree with him about "Manager will not come under payment of wages act. You can just ignore." A Labour Officer performs quasi-judicial proceedings, and non-compliance with his summons/notice can result in an ex-parte order, which the company cannot escape and could lead to bigger trouble. It is always better to present before the notice-issuing authority at the initial stages, get your point across, and have the case dismissed at that level through a speaking order in your favor.

Mr. Ashok,

Mr. Dhingra has suggested the correct approach. When you receive a notice from the labor officer, you cannot remain silent on it. You need to respond to it; failing to do so may lead the Labor Officer to conclude that you have admitted the fact and conduct an ex-parte proceeding, proceeding with further action. Therefore, as Mr. Dhingra suggested, you need to contest the claim of the so-called manager, contending that the labor officer has no jurisdiction to issue the notice since the manager is not a workman if you are sure that he is not a workman. Now, the issue does not end here.

Understanding the Legal Framework

First, you should know whether the said Manager has approached the Labor Officer under the Industrial Disputes Act, 1947, or under the Shops and Establishments Act of your State. It is pertinent to mention here that an employee, whether a workman or a manager, can pursue remedies under shop Acts. The Shops Acts of some States, it appears, have empowered authorities to determine issues of this nature. Therefore, you cannot jump to a conclusion as to the jurisdiction of the Labor Officer.

Even under the Industrial Disputes Act, it does not mean that merely because an employee draws ₹35,000/- and is designated as Manager, he ceases to be a workman. Therefore, first, reply to the notice of the Labor Officer.

Regards,
B. Saikumar

HR & Labor Law Advisor

Mumbai

Jurisdiction of Labour Officer

The labour officer has no jurisdiction to entertain the complaint. However, your reply should clearly state that, without prejudice to your rights to deal with the matter, he may be apprised of the facts and informed that the matter will be handled in accordance with the employment rules.

Principles of Natural Justice

Principles of natural justice demand that a show-cause notice should be provided. If the reply is unsatisfactory, a domestic inquiry should be conducted, giving the employee a full opportunity to defend their case. Subsequently, punishment can be imposed if the charges are proven.