There are two categories of employees namely workmen covered under Industrial Disputes Act and those who are not workmen under the ID Act
1. In case of workmen covered under ID act refer to any Settlement in vogue or Standing Orders applicable
2. IN case of employees who are not covered by the definition of ID Act, Indian Contrat Act is applicable
Employment is a contract. If the parties do not agree to the terms specified, they have a right to rejct. Please remeber, once the terms are rejected, the contract also ends.
Following situations may arise:
1. Employee does not sign the duplicate copy of the letter of increase( Which is generally followed by well organised companies)
Wait for a few days, wait till you credit his salary on new terms. If he does not raise objection except uttering a few
sentences out of frustration, ignore it, and the new terms come into operation.
2. Employee gives it in writing that he is not accepting the new salary
Give a letter indicating that the contract of employment will cease as he is not accepting the revised terms and conditions of
service.Mention in the letter that he can opt to get relieved immediately by paying Notice Pay or get himself releived by serving
the Notice Period.He sure will get back to you and either accept the new salary or opt to get relieved.
3.Employee returns the increased salary by a cheque.
Normally, this does not happen; but if this happens, explain the legal position to him,wait for two or three days, and if he
insists,encash the cheque and relieve him either by giving Notice Pay or by allowing him to complete the Notice Period>If he
changes his stance during this period, accept and allow him to continue and if he does not accept, then relieve him
I have read some postings here stating that the employee has a right to reject his increase. It is not the question of right but it is a question of contractual obligation. If either party decides to alter the terms and if one partty does not agree to the revised terms, then the contract ceases.
I am not discussing about workmen under ID Act here as I presume the employee you are referring to does not come under ID Act
Thanks
Sivasankaran