Stuck Without Pay for Months: What Legal Steps Can I Take Against My Employer?

I have been working with a Pvt Ltd. company for 2 years. For the last 11 months, our salary, reimbursements, and salary slips have not been paid, citing non-availability of funds. The promoters promise every month that they will pay as soon as money comes. However, the issue has been ongoing for a long time, and we are now forced to look for alternatives. Please tell me what legal action can be taken and how to proceed.

Recently, they paid a month's salary, but I suspect this is to prevent the closure of the company only. If I resign and look for a new job, can I still later go legal for payment, or is it better to remain on the rolls until the money is given? The problem is that we have been suffering a lot and for a long time. Where can I get legal help and also read some rules regarding this issue?

Thanks in advance.

Regards,
Mr. M

Jeshkan has given you a realistic suggestion—HOWSOEVER unpalatable. Just get out of there. Coming to your specific query "...can I still later go legal for payment...": Yes, you can. BUT... it's better for all employees to file a single case—rather than singly. In a way, you would be giving the management a good chance to 'divide & rule', even without their asking. Hope you get the point. That way, the legal costs as well as coordination efforts too can be shared. All the Best.

Regards, TS

As per the Payment of Wages Act, no wage period shall exceed one month.

Conditional Attachment of Property Under the Payment of Wages Act, 1936

Please read Section 17A of the Payment of Wages Act, 1936, as given below:

17A. Conditional Attachment of Property of the Employer or Another Person Responsible for the Payment of Wages

(1) Where, at any time after an application has been made under subsection (2) of section 15, the authority, or where, after an appeal has been filed under section 17 by an employed person or any legal practitioner or any official of a registered trade union authorized in writing to act on his behalf or any Inspector under this Act or any other person permitted by the authority to make an application under subsection (2) of section 15, the Court referred to in that section, is satisfied that the employer or another person responsible for the payment of wages under section 3 is likely to evade payment of any amount that may be directed to be paid under section 15 or section 17, the authority or the court, as the case may be, except in cases where the authority or court is of the opinion that the ends of justice would be defeated by the delay, after giving the employer or another person an opportunity of being heard, may direct the attachment of so much of the property of the employer or another person responsible for the payment of wages as is, in the opinion of the authority or court, sufficient to satisfy the amount which may be payable under the direction.

(2) The provisions of the Code of Civil Procedure, 1908 (5 of 1908), relating to attachment before judgment under that Code shall, so far as may be, apply to any order for attachment under subsection (1).

Under the stated circumstances, what actions have you and your colleagues taken so far for the non-payment of wages by your employer? If the problem is not yet resolved, you may seek legal advice on contesting a case under the above section in the Labour Tribunal. I also advise an out-of-court settlement with your employer if a case has already been filed before the court, as you may have to fight for justice for a lifetime under Indian Laws.

Regards,
Madhusudan

Contesting in Labor Court Under the Payment of Wages Act

It is still contestable in the labor court under Section 20, Sub-section (6) of the Payment of Wages Act, 1936, for contravention of the provisions of the Act:

(6) If any person fails or willfully neglects to pay the wages of any employed person by the date fixed by the authority in this behalf, he shall, without prejudice to any other action that may be taken against him, be punishable with an additional fine which may extend to one hundred rupees for each day for which such failure or neglect continues. (This is in addition to the fine of up to Rs. 15,000/-)

Sub. by Act 38 of 1982. S.11

Regards,
Madhusudan

Legal Options for Unpaid Salaries

In that particular situation, you can pursue another job, and the current company must pay you for the previous month's pending salaries, even if you leave before the full and final settlement. However, you need to have all the verified documents, such as the employment agreement. If they fail to pay your outstanding salaries, you have the option to take legal action.

Regards.

Dear Mr. Varghese,

Thank you for the time you have contributed to my query/post. From your discussion with Mr. Madhusudhan, I understand you mean to convey, "there is nothing much you can do and any employer/company can function without paying salary to their employees." If there is something that can be done legally, please educate me on that. Surely, this is not fair and just in the law of the court/country, or is it?

Thanks & Regards,
Mr. M

Thank you for your valuable time and advice. I greatly appreciate your opinions. From the conversation thread between you and Mr. Varghese, I think there is not much an employee of a Pvt. Ltd. company in India can do when their salary has not been paid for the last 11 months. It shouldn't be so... Could you please educate me more about how to handle this situation? It's also a breach of trust because, throughout these 11 months, there have been numerous communications from management assuring that the money would be paid soon, but time is passing by and not much is happening.

Please advise...

Regards & Thank you

Thank you for your appreciation. Twenty-four years ago, I worked in a pharmaceutical company based in Gujarat and operating in Andhra Pradesh. After working for some time, when I was not paid my salary and other allowances, I contested the case in the local labor court. I ran from pillar to post for justice, but not much could be done. Finally, after many hearings, since neither the employer nor his representative attended the court proceedings, the case was pronounced ex-parte, and a decree was given in my favor. Even after that, the employer bothered least to pay my dues. I had to forget the case and move on, as there was nothing that could be done.

Most of the time, the aggrieved withdraw from pursuing the matter further due to their economic conditions and otherwise, fearing the consequences. Even though the scenario has changed and the higher echelons of the judiciary are responding well to public grievances, things remain the same due to corruption in the judiciary system itself. Moreover, suppose you file a case along with your colleagues against your employer, what will happen? The employer has plenty of leisure time and money, and he will manage things while you have to attend court proceedings whenever you are summoned by the court. Can you do that? Suppose some of your colleagues collude with your employer, can you really do anything about it? No! Take the recent case of Kingfisher Airlines! The employees have not been paid salaries for months, and nothing could move the employer, despite the case attracting nationwide attention! Even the courts did not interfere!

My view is not to discourage you from taking any action. Weigh the pros and cons, and if you have already switched to another job and your current employer is understanding and supportive, then explain the case and take his help. Discuss this case with local labor authorities. If you have a union, let the office bearers of the union handle this issue!

Regards,
Madhusudan