Facing Salary Withholding and Legal Threats After Resignation: What Are My Options?

I have resigned from one of the Indian companies and provided a 17-day notice period instead of the usual 30 days because the company has been unable to pay salaries at the end of the month for the past four years. Some employees have not received their salaries even after providing complete intimation; hence, I did not provide full intimation. Now, they have not paid my last month's salary amounting to Rs. 50k. I have visited the labor officer, but nothing has happened there because the employer simply replied that due to my short intimation, they have faced huge losses, so they will file a civil action. The labor officer was unable to close the matter, so I request you to please provide me with suggestions.

I would also like to inform you that the management has released my experience letter and accepted my resignation letter.

What Should I Do in This Situation?

The employer is still threatening me with legal action.

Hi, If it's mentioned in your appointment letter, you have to pay for the rest days' notice period payment or you can adjust your pending salary amount with your full and final payment. Just talk with your company regarding your full and final settlement, and you can get your relieving and experience letter.

Please let me know if you need any further assistance or clarification.

As you mentioned, you have received your resignation and experience letters. Kindly request them for the relieving letter and the last month's salary slip or salary certificates.

Thank you for the reply. I have received the resignation acceptance letter, experience letter, and my updated salary slip on payroll, for which I have a copy. However, the management of the company has not bothered to deposit my salary into my bank account. They blame me, stating that due to my resignation, they have faced a huge loss exceeding my salary amount. As a result, they refuse to pay my salary and threaten to file a civil suit against me.

Moreover, this company has not credited employees' PF. I have lodged a complaint with the PF department regarding this issue. Consequently, the company's director has taken it personally and seeks revenge.

I kindly request your assistance in providing some suggestions for my situation. The management is unwilling to release my salary due to their anger over my complaint to the PF department. This company has a history of not paying salaries to employees who resign.

Dear Amit, If there is a clause in the appointment letter regarding the notice period, then you will not be able to seek legal help as you have not followed the policy. The company will have the upper hand in the notice pay clause and can withhold salary for the losses. However, you can request them to provide you with details of the losses incurred. It is advisable to address this through a legal consultant.

In addition to the PF complaint, stay resolute and pursue it actively through RTI and other available avenues to reclaim your legal entitlements.

Regards,
Ashutosh Thakre

Understanding Contractual Obligations and Legal Recourse

There are different sides to this story. You were under a contract of employment, under which you are required to give a notice of 30 days. However, you were not paid a salary for 4 months, so the contract is already void and terminated. Where the consideration for the contract is not paid, there is no contract.

When the company has not paid a salary, there is no ground for them to insist on the completion of the full notice period. Even if it were so, the loss to the company for short notice is not recoverable from the employee. At most, the salary for the short notice period can be adjusted. This is mentioned in the Payment of Wages Act, Factories Act, Standing Orders, etc. No court will take cognizance of this.

I do not know why the labor officer could not take action. It is possible he has received his envelope from the company.

You have an option. File a complaint in the labor court (seek advice from your lawyer). Or forget it and move to a new employment. If they make the mistake of taking the matter to court, then let your lawyer handle it.

However, keep your new employer informed of the situation.