Can My Employer Legally Block My Salary Cheque If I Plan to Resign? How to Handle This Situation?

Hi, I am currently working for a BPO in Goa. Our salaries were delayed since the CEO somehow sensed that employees were intending to leave. However, I did get my salary cheque (since I'm a new joiner, no bank account is opened for us). I, too, was intending to resign due to my health condition. But I did come to know that the CEO was blocking salary cheques of employees who have resigned. I was wondering if mine too will be blocked or not.

Legal Rights Regarding Salary Withholding

There is no law that empowers an employer to hold the salary of a worker in anticipation of their resignation. Moreover, the wages earned (it is earned wages because you are receiving it in return for the efforts you have put in to produce something or render some service) cannot be withheld unless there is a strong reason to believe that the worker is not entitled to receive it.

Practical Challenges in Salary Payment

Now coming to the practical side of the case, there are employers who delay in paying salaries or do not pay salaries for months at a stretch but will continue to employ the workers, citing financial problems. They may promise that salaries will be paid once the situation improves. Workers have the option to recover their wages following the provisions of the Payment of Wages Act and the Industrial Disputes Act, but they may hesitate to take action, fearing job loss, even though they might eventually receive their full salary.

Employer's Responsibility and Employee Options

Another type of employer, like yours, may always assume that once the salary is paid, employees will leave the job. They may not consider why the workers are leaving, which could be due to discomfort with the organization they are working for. The responsibility to address this lies solely with the employer. Holding salaries indefinitely without addressing the underlying issues is unacceptable.

As mentioned, there are two remedies: either fight for your rights under the Labor Laws or choose to let go and wait for the right time. However, this does not mean you should continue your association with the same establishment. You can explore other career opportunities that will make your life more comfortable.

Regards,
Madhu.T.K

Illegal Salary Deductions for Employee Errors

There is a practice in some firms to deduct employee salaries in lieu of errors made or human mistakes. This is a totally illegal practice, and no law supports such deductions.

Please let me know if you need any further assistance.

Hi, I am currently working for a BPO in Goa. Our salaries were delayed since the CEO somehow sensed that employees were intending to leave. However, I did get my salary cheque (since I'm a new joiner, no bank account is opened for us). I, too, was intending to resign due to my health condition. But I did come to know that the CEO was blocking salary cheques of employees who have resigned. I was wondering if mine too will be blocked or not.

Cheque Blocking Concerns

It's not that easy to block the cheque once it's issued to the payee except under a few circumstances:

1. Can send a letter authorizing the paying banker to "Stop Payment" on the pretext of 'misplaced' or 'lost in transit,' etc.
2. Can raise a dispute and file a petition in the appropriate court seeking an injunction directing the banker not to pay against the cheque (this is resorted to avoid penal action for the dishonor of a cheque under the Negotiable Instruments Act).

In your case, having already issued a cheque in your favor, it's not that easy to escape once they attempt to block the cheque payment since they'll know they have to face penal action for a "bounced cheque," which act they cannot defend when they are taken to court as it's against genuine salary payment for the service rendered.

So for the present, await to see what happens to the cheque when you present it for collection (have you presented it or not yet?)

Regards

Deposit the cheque and encash it. If it is stopped by the employer and the cheque is returned unpaid, follow the procedure for remedy in respect of bounced cheques in consultation with a practicing lawyer. The repercussions of such a case are serious and can lead to imprisonment if you follow the correct procedure.

Handling Dishonoured Cheques

Thinking ahead, please be informed about what actions to take when unwanted situations occur.

Q. What if a cheque is dishonoured (not paid by the drawer's bank)? It was issued by a company. What can I do now?

A. In the event of a cheque being dishonoured by the company, you can file a suit for the recovery of the amount under Order XXXVII of the CPC. Upon the dishonour of the cheque, you need to issue a notice to the company informing them of the dishonour and noting that the cheque's validity period is still active (3 months from the date of the cheque). Please re-present the cheque, and upon receiving information about the dishonour again, immediately issue another notice (Registered with acknowledgment) within 30 days of receiving the information of the dishonour to the company. If the company fails to make the payment within 30 days of receiving the notice, you can file a complaint under Section 138 of the Negotiable Instruments Act. Please note that this complaint must be filed within one month of the expiry of the 30-day notice period.

You can find more information about the impact of the 'dishonour of cheque' or 'stoppage of cheque payment' in the attached notes.

Regards

Is there any provision in law to deduct salary or other payments of employees due to losses incurred by the company from employee mismanagement, absenteeism, or when an employee resigns abruptly? In cases where the company faces losses due to pending work resulting from an employee's termination of services.