Facing Late Salaries and No Support: Can I Leave My Job Without Legal Trouble?

Hello all. I am working as a quantity surveyor for an interior company in Bangalore. It is a small company with 35 employees. I have signed the agreement for a year. However, in this office, they are not paying the salary on time which leads to mental harassment. There is no support to employees, and they make many deductions. Additionally, there is no salary hike, leave, or holidays provided. My question is, if I leave the company, can they take action against me? What is the possible way I can resolve this problem?

You have written about the challenges you face arising from unethical labor practices in your post. You have also mentioned that you signed an agreement with the company for a year. However, it is unclear what type of agreement this is and how enforceable it is legally. Therefore, it would be helpful if you could clarify this point.

We can offer a solution, but it will depend on how far you are willing to confront your employer. You may consider submitting a letter of resignation. If your employer brings up the agreement, assert politely that they are expected to adhere to acceptable labor practices. If they remain obstinate, as I anticipate they might, inform them that you will be compelled to file a formal complaint with the Department of Labor, with a copy sent to the Union Ministry of Labor. During your discussions with them, try to maintain emotional composure. Your employer may display emotional reactions, but it is crucial for you to remain calm.

Employers who engage in illegal practices often do so in collusion with local labor officials. However, if there is no connection with the labor authorities, handling the situation could be less complex. You may end up teaching your employer a valuable lifelong lesson.

Thanks,

Dinesh Divekar

As per Section 5 of the Payment of Wages Act, 1936, your employer is entitled to disburse the wages on or before the 7th of the month following the completion of the work month. Subject to Section 1(6) (employee's eligibility under this act), if you fall within the legal purview, you can demand your salary/wages by the 7th of the month. However, a delay in the disbursement of wages is a violation of the said act. If you wish to proceed legally against your employer, you can approach your range labor commissioner and provide your salary slip with the date showing the delay.

Thanks & Regards,
V. SHAKYA
HR & Labor Law Advisor

Understanding Your Rights Under the Payment of Wages Act

As per Section 7(2) of the Payment of Wages Act, 1936, the employer cannot make any unauthorized deductions. Various leaves and holidays, such as weekly holidays, national and festival holidays, earned leave (EL), and casual leave (CL), are subject to the appropriate act applicable to your company and its eligibility criteria defined therein.

Addressing Workplace Harassment and Service Bonds

Since you have been confronted with a non-supportive atmosphere at your workplace and harassment, such as no leave and overloaded work, I assume you have signed a service bond for a year. If you wish to leave the company, you can either complete the bond period or break the bond by paying the amount actually incurred toward your training cost. No employer can hold any employee by way of signing a bond. Simply give the notice period as per the clause in your appointment letter, complete the notice period, and ask for full and final settlement (F&F). No legal action can be taken against you for signing a service bond because holding employees to a bond is completely illegal and cannot legally stand. An employee can leave the company at any time for their betterment by following the clauses in the appointment letter, as it amounts to a service agreement agreed upon by both employer and employee.

Thanks & Regards,

V. SHAKYA

HR & Labour Law Advisor

Yes, I have signed an agreement for one year. If I leave the company within the agreement period, I will have to pay three months' salary, or else the company will take legal action. This is the wording of the agreement.

Every month, we receive our salary on the 15th and 16th. They deduct 24% PF from our salary. According to the government, only those who earn a salary of 15,000+ should have PF deducted. However, these people deduct according to their wish. For those who earn 37,000, PF is not deducted, but for those earning 15,000, they deduct 24%. Additionally, they do not provide us with the PF account number.

Legality of Employment Bonds and Employee Rights

Legally, no employer can hold any employee for a certain period by way of signing a service bond or agreement like one year or two years. However, an offer letter or appointment letter itself is an agreement of service agreed upon by both employer and employee. The clause contained in the offer should be legally valid. A company can include the clause of a notice period and the amount in lieu of the notice period. A three-month notice period is legally valid, as well as payment in lieu thereof. Putting a clause to hold the employee for a period of one year is completely illegal and unethical practice.

Additionally, deducting the entire 24% contribution of EPF from an employee's salary is a violation of labor law guidelines and the EPF Act. Employees can directly ask for their rights and statutory benefits like EPF, ESI, bonus, gratuity, etc., as per the rules defined therein. Hence, if your employer is indulging in unfair labor practices, there is no need to worry about legal action.

First, you can try to convince your employer to seek your rights and statutory benefits amicably. If they remain adamant, you can even approach your range labor commissioner regarding the violation of labor laws, especially if you fall under the workman category as per Section 2(s) of the ID Act.

Thanks and Regards,

V. SHAKYA

HR and Labour Law Advisor

Agreement Terms and Conditions

A. The Company has selected the Employee for the position of QS Assistant.

B. The Employee, upon joining the Company, undertook to stay employed by the Company for a minimum period of one year and serve a one-month notice period to the Company in case she wishes to leave. This agreement is valid until 21 July 2017.

C. The Employee, as part of the consideration for the training efforts and costs involved, agreed to sign a bond committing not to leave the Company's services for a minimum period of one year from the date of joining.

Agreement Clauses

1. The Employee acknowledges that substantial costs have been invested in training him/her to effectively handle job responsibilities, and any discontinuance of employment before the one-year service period would unfairly prejudice the Company. Therefore, the Employee undertakes not to leave the Company's services for any reason for at least one year from the date of joining.

2. Should the Employee leave the Company before the one-year period, for any reason, he/she shall promptly pay an amount equivalent to three months' salary as indemnification for training costs to the Company. The Employee agrees not to dispute the amount, pay it before requesting a formal relieving order, and acknowledges the Company's right to initiate legal proceedings if necessary.

3. During this agreement's term, the Employee shall not engage directly or indirectly in any similar trade or business, in any capacity.

4. The Employee shall demonstrate honesty and loyalty to the Company, maintaining confidentiality of trade secrets, business processes, or any confidential information related to the Company's management decisions, dealings, or affairs.

5. Any disputes arising from this Agreement shall be settled through arbitration, with the sole Arbitrator appointed in consultation with both parties. The arbitration's venue shall be in Bengaluru.

6. The Company reserves the right to transfer, suspend, or terminate the Employee's employment for breaching the above provisions or showing dishonesty. The Company may withhold the Employee's Salary and Experience Letter until the matter is resolved.

7. In witness whereof, the parties have executed this Agreement on the mentioned date and Company Address.

Above mentioned are my office agreement rules. I have signed this agreement. If I leave within one year, can the company take any legal action against me?