How Should I Handle My Employer's Offer of Only 20% for Unpaid Salary and Expenses?

Dear Madam/Sir, I worked with an organization for 3.5 years (Dec '04 to May '08) in sales and marketing. During the last 1.5 years, my salary was paid partly due to non-submission of daily reports, and traveling expenses were not reimbursed due to late submission. My supervisor kept insisting that my settlement would be completed.

In Feb '08, when I strongly requested my settlement, he issued me a memo with a two-day deadline, requesting my financial details. I promptly replied with all the necessary information. Following my response, I was transferred to another location.

I have been regularly following up with my senior, accounts department, and HR department, but they have not settled my account. Finally, I resigned in May '08. Recently, I personally visited their regional office and Head Office.

The HR manager informed me that they are unable to settle my account and offered a lump sum amount (20% of my pending amount) with a request for a confirmation letter stating that my full and final settlement has been completed.

Kindly advise.

This is an interesting case. You worked for 3.5 years until May 2008. You did not get the final settlement but waited until 2013 to bring it up. A few points are important:

- Did you submit the reports late or didn't submit them at all?
- Why was it late?
- How late is it?
- Is it possible that your company deems the reports false since they were done late?
- What correspondence do you have? Is there proof that you kept asking for it? (The law of limitation of 5 years applies).
- What reason has the company given for not settling now that you have gone to meet them?

Thank you for your response. I submitted the reports late due to the hectic schedule of my traveling (almost 25 days a month). The submission was delayed by one month. The reports were not deemed false; they were submitted to my supervisor, regional office accountant, accepted with my traveling expenses, and forwarded to the Head Office for settlement. I have been sending emails and also sent hard copies through registered post. The company simply does not want to pay, as they believe I cannot do anything against them.

During my recent visit to their Head Office, I submitted my application detailing my pending salary and traveling expenses. I also sent scanned attachments to the Managing Director, Vice President, and HR Manager's email IDs. I am sending daily reminders regarding the same. Kindly advise if legal action is possible.

Thanks and Regards

I think you have adequate grounds for legal action. If you are a workman defined in the Industrial Dispute Act (look at the definition, not the commonly understood English meaning), then you can approach the local labor officer for help. You can also get a lawyer to file a case in the labor court.

If you are not covered by the Industrial Dispute Act, then you can make an application under the Payment of Wages Act (if your salary was less than ₹10,000 per month). Otherwise, you have to file a civil case. A labor court case will proceed more quickly.

My assumption is that you have proof that this money is due to you and that you have been regularly following up. You will need to explain in your petition to the court why you filed it so late. Furthermore, keep details ready to prove that you did not falsify the reports, and that each delay was only due to travel schedule and work pressure that kept you from filing the reports on time.

Court cases take time and money, but I think you have exhausted other options.

You can sue them. Consult a good lawyer and send the notice to the Managing Director. If you have been following up for over 6 months with documentary evidence and if your dues are more than Rs. 500, then you can straight away send them a notice for winding up. This will be followed up by a winding-up petition to the court. Your lawyer will post a classified advertisement in a newspaper stating that the winding-up petition is being filed since they cannot afford to pay you the money they owe you and will request all other creditors to join and support you. If it is proven that the money is not paid, the court will order the winding up of the company.

This is an easier way to compel them to pay you the entire amount with interest. In the early 90s, one of the Essar company's was ordered to wind up by the court due to non-payment of pending travel bills of an employee who had resigned. The matter got settled by the payment being made and the sacking of over 20 employees by the management for bringing shame to the company, including the CEO.

Since this pertains to travel bills and not salary, you can file a winding-up petition under the Companies Act of 1956. Avoid going for a civil case because the company may keep taking adjournments, summoning you for no reason repeatedly, and harassing you due to delays in court proceedings. You will spend more time in court than in your new workplace. Under the Companies Act, you will be summoned only once or twice for deposition and cross-examination, and since court cases are fewer, the case will end quickly. No company wants to see an advertisement for winding up in the papers as it would tarnish their image. Settlement out of court is likely, especially if it's from an ex-employee, as no prospective employee would want to join a company with such issues.

All the best.

Contact a good lawyer, and they will advise you accordingly.