Employer Is Not Taking Initiative For Yearly Increments

Dear All,

Please suggest to me what to do if the employer is not taking any initiative to provide increments. Increments have been stopped since September 2014. Employees are continuously following up with me, and I have forwarded the same to the Managing Director of our company. However, he is only replying with "ok" and not taking any action.

Regards,
Dhanashree

This happens in all companies that are facing a recession or a tough business environment. In this state, only HR will have a crucial role in explaining the situation to fellow employees and trying to retain them.

Ask your director to get a clear picture and then meet with your employees to diplomatically convey the same message that your boss wants to communicate.

This experience will be beneficial for you and will be useful in the future. All the best.

As a matter of fact, an increment is not a right under any act or statute. This is something you need to understand. However, asking for an increment or a revision of salary is the order of the day, which no one can deny.

As mentioned by our member, Mr. Stephen, you can consider this as an experience to run the company during a crisis. Furthermore, with this policy of your company, you may be losing good employees naturally, as they may seek greener pastures elsewhere.

Try to convince the employees about the situation of the company and manage it for a few more months.

Keep well.

You should also share what your own assessment of the situation is. Is the company in a position to give the increments? If not, then you should explain this to all the employees after consulting your Director.

Dear M/s Dhanashree,

It is disgusting to learn that the employer has refused to give increments. I ask a simple question to the employer. Can he ask for diesel at the same cost as one year before, or electricity, or AMC charges, or steel, or chemicals? Even the salaries for new joinings are always higher for the same position and caliber. In fact, the employer should not think of it as an option to give or not give. This is only due to no professional management, and the owner or director behaves like a Lala.

Now secondly, every tenant is supposed to sign a 10% rise in rent. Every school enhances the fee structure every year. Milk prices increase. Give me an example of a single school that reduced the fee the next year. Every person grows and becomes older by one year. Sisters and daughters approach the age of marriage. A person approaches the age of marriage. Old parents demand more medical care. The house falls short of rooms or square footage. Conveyance changes from nothing to a two-wheeler and then to four. Only an increment can compensate for all these. Nonetheless, the increment has to be over and above the inflation rate. I have seen the standard of living and spending capacity going down year after year when increment rates are less than inflation.

You can gently convey a message to your MD, stating that promotions and increments are essential components of an organization's retention strategies. If the MD is not showing interest in this aspect, there is a risk that employees may depart suddenly for better opportunities elsewhere and may also spread the word that the organization is not employee-friendly. Your MD should convene a meeting with all senior employees to discuss his challenges and obstacles, aiming to instill confidence in the team. It is important to recognize that without human resources, no equipment can function effectively. Your MD should come to this realization.

I agree with Sanjay Kumar as he explained the position of employees rather than debating management problems.

In the query raised, the employer has withheld the increment from September 2014. As far as workmen of the employer are concerned, they have a legal right to earn the pre-existing right of the annual increment. Failure to pay the dues attracts a penalty upon the employer. In case any employee happens to make a complaint to the Labour Commissioner, it will be embarrassing for the MD. For non-workers, the non-payment of the increment due is also a violation of the Payment of Wages Act as made applicable under the Bombay Shops and Establishment Act. Supposing anyone complains to the inspector under the Bombay Act or seeks information under the RTI Act regarding the inspection of registers and non-payment of annual increments to employees, the problem will be faced by HR as he/she is firstly responsible for compliance with these provisions. An extract of the Delhi HC decision will clarify the position below:

Delhi High Court

Jeet Lal Sharma vs Presiding Officer, Labour Court - ... on 15 March 2000

" ...there may be cases where the workman would be held entitled to receive the money as a pre-existing right based on the agreement between the employer and employee or as per established service conditions which have culminated into a right in favor of the workman. Take, for example, when a workman is not paid his wages for a particular period, he shall be entitled to file an application u/s. 33-C(2) of the Act claiming wages for that period as he is entitled to receive the same at the rate agreed upon and at which the employer has been paying to him in the past.

Thus the crux of the matter is that the workman can file an application u/s. 33-C(2) only when he is "entitled to receive" money claimed by him. His entitlement to receive money is referable to a pre-existing right which would be established if it has been earlier adjudicated upon or provided for, i.e., recognized by the employer. This recognition can be either in the form of a settlement or as per the service conditions."

Here the terms and conditions seem to be agreed upon, and the employer has merely withheld annual increments that fall due on the annual anniversary of the appointment date of an employee.

To say that it depends upon the performance of the employee is virtually imposing a minor penalty upon the employee by withholding the annual increment.

Thanks,

Sushil

Hello friends,

It is stated that the increment from Sep 2014 has not been given. Please recall that the minimum wages of certain scheduled employments have been increased wef 13.8.2014. Furthermore, the PF ceiling has been revised from Rs.6500/- to Rs.15000/-. These changes have considerably increased the CTC burden and financial budget for management. All companies or business houses cannot simply increase the price level whenever these statutory requirements increase.

Moreover, the sanction of an increment is not mandatory unless there is a revision of minimum wages, D.A increase notification, an agreement with the union, or in the terms of employment. Some companies have adjusted the increment due against the increase in minimum wages, PF ceiling increase, etc. In other words, the increment has been absorbed or adjusted against the 13.8.2014 increase of minimum wages and the increased ceiling of PF, and so on. Hence, we may need to wait for the opportune time.