Employee on Probation Needs Salary Letter for Home Loan – How Should HR Handle This?

Hello everyone,

I need suggestions/advice on the following:

One of our employees is on probation (under the training period) and has requested a company letter specifying the salary, as payslips are not generated for probationary employees, and they receive a consolidated stipend per month for a home loan. As HR, should we mention that the employee is on probation or not? Does this pose any problems with labor law?

Urgent. Please reply.

The confusion has arisen because your company has not understood the provisions of the Shops and Establishment Act or the Factories Act, as applicable. Once the employee comes on board, right from the first day onward, he/she is eligible to receive the salary. There is nothing like "stipend." Secondly, once the employee joins, whether to allot the status of a probationer or a regular employee is an internal matter of your company. It is out of the purview of the statute. The issue of wage slip to each employee is mandated by the Shops and Establishment Act or the Factories Act, as applicable. Both acts do not differentiate between a probationer or a regular employee.

As far as advice to the employee is concerned, I recommend he wait until he becomes a permanent employee. He can avail of the home loan facility after becoming permanent and not during the probationary period. What if his performance is not up to the mark and he is required to be removed from employment? The loss of employment with the burden of a home loan could come as a double whammy to him.

Thanks,

Dinesh Divekar