How Can a Doctor Claim Unpaid Compensation and Respond to Legal Threats After Resignation?

One of my friends is a doctor and has been working with a psychiatric hospital governed by private individuals for the past 13 years as a full-time doctor in Kerala. He was receiving his remuneration partly through the bank and partly in cash. He has decided to quit and resigned from the job. They accepted the resignation but did not provide any compensation for his 13 years of service and withheld his last month's salary. His remuneration was paid as a salary, with income tax deducted as per the law, and not as a professional fee.

Now, the hospital has deceived him by asking the doctor to repay the amount he had been receiving every month in cash, treating it as an advance in their books. Additionally, they have claimed an outstanding amount from a patient under the doctor's name and sent a legal notice to him.

Request for Assistance

Please advise on whether he has any chances of receiving gratuity for the last 13 years, earned leave salary, bonus, etc., and how to respond to the legal notice served by the hospital.

I request the team's assistance in securing genuine compensation for him. We are aware of the typical practices of many private organizations that make life difficult for their employees after resignation.

Information on Employment Rules

Could you please provide information on the rules regarding the payment of annual leave, gratuity, bonus, etc., to a doctor by profession working as a full-time employee of an organization?

Regards.

File a civil suit for a declaration that Doctor Saheb was an employee of the Hospital and a mandatory injunction to obtain a relieving letter. Also, seek recovery of dues other than statutory dues, which you can claim from statutory authorities without payment of court fees. Send a legal notice stating that criminal prosecution will be initiated against the employer for cheating and forgery of records, resulting in wrongful loss to Doctor Saheb.

Thanks,

Sushil

Eligibility for Remedial Measures and Terminal Benefits

Since the affected person happened to be a salaried doctor in the said private psychiatry hospital, it is quite natural for doubts to arise regarding whether he could avail of any remedial measures available under the Labour Laws for the alleged problems created by the management after accepting his resignation and whether he is eligible for any terminal benefits due to his resignation as well.

In the first place, the said hospital is an establishment under the Kerala Shops and Commercial Establishments Act, 1960, if it is situated in any place mentioned in Section 1(4) of the said Act. If so, the doctor is just a person employed there to mainly render professional service of treatment of patients and therefore, he is an employee as per Sec. 2(6) of the Act. Since this is a case of resignation, he is eligible only for the cash benefit of the unavailed portion of Annual Leave with Wages at his credit.

Entitlement to Gratuity

Therefore, regardless of whether your friend was employed there as a Junior Doctor or as a Senior Medical Officer charged with certain professional/supervisory/administrative responsibilities, he is certainly eligible for and entitled to gratuity under the Payment of Gratuity Act, 1972 upon the termination of his employment, which in this case is his resignation accepted by the management. It is advisable that he engages the services of an Advocate well-versed in labor matters to complete the preliminary legal formalities such as the issuance of notice for gratuity, preparation of the claim, etc., and to appear on his behalf before the Controlling Authority under the P.G Act, 1972.

Payment and Legal Implications

The cash part of the monthly payment by the management seems to be a mutually agreed arrangement to evade the provisions of the Income Tax Act applicable to both. Though the Payment of Wages Act, 1936 is applicable to the establishment, I presume that the individual's salary might exceed the maximum wages prescribed under the said Act for application purposes. That's why the management intelligently adopts the tactic of treating the payment as a cash advance and recovers the same to deter the individual from staking a claim for his gratuity. No prudent employer will grant monthly cash advances to his employee continuously for a period of 13 years without recovering the earlier advance. Hence, it partakes the nature of a civil dispute, and I advise your friend to resist it accordingly.

Regards

Dear Sirs,

Thank you very much for the opinions and suggestions. I conveyed all the messages to him and suggested consulting a good lawyer to tackle the issue. Is there any time limit to reply to the legal notice served on him by their lawyer? Can he go to the consumer court to sort out the issue.

Sir, I have passed the valuable suggestions and opinions to him. Hope he would be able to tackle the case with a good advocate. Please also suggest whom he should send the reply to, the advocate, or the firm. Thanks a lot.

Regards,
menonopp

Mistake in Remuneration Handling

Sir, in my opinion, your doctor friend has himself committed a mistake by "getting the remuneration partly through the bank and partly in cash," as mentioned by you. The employees and officers must be vigilant towards their rights as per various labor laws, such as the Payment of Wages Act, etc. Accordingly, it is required to be probed whether the amount received in cash was actually "wages" and not any type of advance.

Legal Steps and Recommendations

As suggested by seniors and experts earlier on this topic, I think your friend may engage a good lawyer, get the reply to the legal notice prepared, and send it to the ex-employer along with a copy to their advocate, if any, from whom the notice has been received.

Sir, I shall convey the message to him. Somebody is saying that a doctor by profession cannot be treated as an employee and is not eligible for the benefits entitled to an employee. Could anybody clarify the same.

Regards,
Menonopp

Hi Menonopp,

I have conveyed the valuable suggestions and opinions to him. He will provide a reply within a day or so after discussing with the advocate. I am confident that the aforementioned valuable suggestions and opinions will assist them in resolving the case.

Thank you very much.

Regards,
Menonopp

No doubt, the doctor friend is a professional, but that doesn't mean he is not an employee of the hospital, which is an 'establishment (shop)' under the Kerala Shops & Commercial Establishments Act, 1960. Other labor laws are also applicable to the hospital.

For clarity, could you check and confirm:

1. What type of documents did the doctor sign when he received monthly cash payments? Was it a cash voucher? Was there any mention of the nature of payment as "advance" in these vouchers?
2. What are the terms and conditions of his appointment? Was there any mention of these cash "advances"?
3. Was he covered under the EPF Act, and was any contribution collected from his salary? If so, what happened to this final settlement from EPF?
4. No doubt, he is entitled to benefits legally available, for which he should immediately file his applications in the prescribed forms under acknowledgment. If he does not receive the acknowledgment, he should send them via Registered Post Acknowledgement Due.
5. You can act based on the advice of your advocate. If possible, you should try to get a caveat from the appropriate court and/or file a suit for appropriate directions after giving due notice to the hospital. Perhaps you should also involve your Professional Body, like the state Medical Council, for their intervention to strengthen your case.

Complicated Case of Salary and Compensation

The case is somewhat complicated. He has mentioned that:

• Out of the total salary, the major part went to his bank account, and the rest was given on signing a blank voucher.

• While joining the hospital, there was no formal medical setup whatsoever. So, at that time, no appointment order or other terms and conditions were talked about or followed. Initially, the total salary was given by hand as cash. For the past few years, the major part went to the bank. In the income tax return, only the amount sent to the bank was mentioned.

• No EPF was deducted.

Anyways, all the above suggestions and opinions would help him and his advocate to sort out the issue.

Thanks a lot.

Regards,
menonopp

Despite all those shortcomings, he is governed by the Shops and Establishment Act and the terms and conditions of an employee stated therein. If he is covered by EPF provisions, then despite non-deduction or non-contribution by the employer, he will be entitled to EPF dues, and he will also be entitled to gratuity dues.

Thanks, Sushil