Non-Payment of Salary: Should I Serve My Notice Period or Stand My Ground?

I have been working with a company for almost 9 months now. They do not pay salaries regularly, and they owe me about 4.5 months' salary. I have resigned, but they want me to serve the notice period and are unwilling to adjust with pending salaries.

Please advise.

Demand for Payment and Negotiation

Demand payment and negotiate strictly, stating that if they cannot pay, you will adopt legal means to get your pay. You can send a notice demanding payment with interest and for a full and final settlement (F&F), mentioning that you are resigning from the job immediately if the payment is not made within 15 days. It's the default of the employer; 4.5 months is unreasonable.

Crisis in Small Business Establishments

This is the biggest crisis of small business establishments. They fail in turnovers. When they get some project to work upon, employees start to leave for the same reason as yours, and they fail to afford new employees. This mostly happens because of their improper planning and the cost of extravaganzas they incur when their turnover was good. Saving for a rainy day is just a human concept rather than corporate.

Legal Implications of Non-Payment of Salary

Legally speaking, by not paying your salary on time, your employers have violated the terms of employment. Therefore, you are free to leave with immediate effect. Once the terms have been violated, under the Indian Contract Act, the contract comes to an end, and none of the terms hold true.

So, the only rights left under the contract of employment are that you have a right to take legal action against them for non-payment of salaries. In any case, is it likely that they are going to pay you the balance salary? Do you think they will be cooperative when you leave? Looking at the past history or even the current situation, it does not seem likely. So why bother adhering to their instructions on the notice period? Just walk off to your new job and write off this as a bad experience.

Any company you join in the future, just clearly tell the HR team that you left the previous company because they did not pay you five months' salary and therefore you do not have the necessary leaving documents.

There are two issues, as I've understood. First, the payment of salaries for 4.5 months. Second, serving the notice period.

Payment of Salaries

For the first issue, you may seek legal recourse depending on what has transpired, your inquiry in writing, and their response so far.

Serving the Notice Period

Regarding the second matter, isn't it the law that you have to serve the notice period? It's the company's decision whether it wants to waive or adjust the notice period. You can't claim it as a right.

I suggest you fight your case on merits.

Warm regards, Ajay Chaudhari

So, what you are saying is that even though the company has not paid me a salary for 4 months and will never give me that amount just because I was unlucky to have signed the employment contract with this company, I have to work another 2 months free of cost just because my appointment letter says a 2-month notice period? This is neither logical nor what the law requires.

Consideration in Employment Contracts

All contracts (including deemed contracts like employment) are based on consideration. Consideration means the amount of money payable for the services or for fulfilling any promise made. If the employer has not paid or paid less than the contracted value, the consideration is not there, and the agreement has no validity. So, where the contract is invalid or inoperative due to the default of one party, the other party is under no obligation to complete his part of the contract.