Facing No Increments and Job Changes: How Should Employees Navigate These Challenges?

Increment Issues in a Private Limited Company

In a private limited company, the top management has not given an increment for the past 3 years. Even for the current year, there has been no increment, despite the company having a good profit level. Although the management is unwilling to provide an increment, in this situation, where should the laborers and employees of that company approach to receive an increment? Perhaps the Labor Inspector or somewhere else? What are the legal steps to take to receive an increment?

Employee Resignation and Management Decisions

Regarding the above issue, some senior employees have decided to resign from their jobs. Due to unemployment, the management believes that there are many job seekers in our society and is prepared to replace the senior employees with new ones. Is the management's decision correct? Will the management also postpone increments for the new employees?

ESI Benefits After Job Change

If a person has been contributing to ESI for the past 2 years, resigns from that job, and joins somewhere else where the new company does not include PF and ESI benefits, working there for the past 10 months, can they still enjoy ESI benefits? If yes, what should the employee do? Is there an annual subscription fee?

Training and Orientation in the Workplace

The same company is reluctant to provide training and orientation to all workers and employees because the management is unwilling to spend on training programs. How much would the quality of work increase if training were provided?

Please provide guidance on the above issues.

Thanks,

Legal Steps to Receive an Increment

You can only press the management to revise pay scales. As HR, put up a study on pay scales in the same industry and attrition rates of your company versus similar companies and the ill effects. However, if management is adamant, then persuasion will have a limited effect.

Management's Perception of Job Seekers

Due to unemployment, management thinks that there are a lot of job seekers out there in our society. They are ready to replace senior employees with new employees. The perception that job seekers are plentiful may be correct to some extent, but it reflects poor management by the owners. Even for a peon's job in a government office, lakhs of applications are received. The issue is that your management is self-centered and does not care too much for employees. Their approach seems to be "one will go, ten more candidates will come." They appear to be very poor employers, and you may want to explore other job opportunities.

Your situation appears a little difficult to believe, but as you have been raising the issues repeatedly, our sympathies are with you.

Increment Expectations and Legal Rights

Though an increment is not a legal right conferred by any statute, there is a legitimate expectation, particularly since the unit is doing reasonably well, as we understand from your query. In this situation, a demand could be raised by the union or even individual workmen collectively by way of notice of change with a copy to the Labor Officer to bring the management to the negotiating table. The management's perception that even if the senior workers leave the company, they will be able to manage with fresh and raw hands is foolhardy, as the quality of workmanship and the overall morale would be seriously impaired in the process.

Management's Exploitation of the Labor Market

Management is certainly wrong in denying the workers their due by exploiting the labor market.

ESI Coverage and Benefits

The ESI coverage will last until the benefit period corresponding to the last contribution period in which you have contributed gets over. If the new company is not under PF/ESI, then the coverage will not get extended there. As these benefits are tied up with the establishment one works for, the individual workman does not have any role in continuing to avail the benefits of the scheme.

Importance of Training and Orientation

We agree with your proposition that training is needed and will help improve the quality of work. If these simple axioms fail to impress your management, probably certain worst lessons will teach them so, and the day may not be very far off.

Ranjeetha, we empathize with your rather difficult situation, but it appears clear that this is not the right place to continue your career.

Giving increments to employees is neither a legal requirement nor a favor to employees by the employer. The management provides increments in a market-driven economy to retain the good employees who are adding value to the company. If the management is achieving the same results by hiring new and untrained employees, it should be a point of consideration for existing senior employees.

Understanding the Value of Talent

Your questions 1, 2, and 3 have been adequately answered by the learned seniors above. I have nothing to add further thereon. I only alert you to the fact that the top management's understanding of the value of talent is abysmally poor. If it believes that it can run its business competitively by replacing a skilled senior workforce with raw and inadequately skilled juniors to save costs on salary hikes, then like a rolling stone, it will never gather moss. The loss of its skilled workforce may be its competitors' gain. The markets work like this.

The Importance of Training

So far as training is concerned, it will definitely upskill the employees and enhance their productivity, but your management may ask you, "What if you train them and they leave?" So, be prepared with a reply for it.

Regards, B. Saikumar
HR & Labour Relations Advisor
Navi Mumbai

Dear Seniors,

Please guide me for my 3rd question.

3) If a person has been contributing to ESI for the past 2 years, and then resigns from that job to join somewhere new where the company does not include PF and ESI benefits, can they still enjoy ESI benefits after working in the new company for the past 10 months? If yes, what should the employee do from their side? Is there any annual subscription fee?

Thanks.

In my view, the ESI Act does not provide for carrying forward ESI coverage of an employee from former employment to a new company not covered by ESI, as ESI benefits are linked to an establishment's coverage under the Act.

Other views are welcome.

B. Saikumar
HR & Labour Relations Advisor
Navi Mumbai

Dear Ranjeetha,

Your query no. 03 on ESI coverage has been answered well by KK!HR. The contributory period is taken into consideration for availing the facilities even after losing or leaving such a job with ESI coverage. There is no subscription fee for such continuation.

Thank you.

I don't recommend this to you. But sometimes, in this situation, the senior managers have to push the company head. Reach out to them and ask for a meeting as it might work.

In another scenario, as per the railway regulations, they will only address the issue if they receive a letter with up to 25 signatures requesting something to be taken care of.

I hope you understand how to solve this.

Dear Sir, our Senior HR Manager has spoken with the management many times, but management is not ready to increase the salary limit for workers and employees in this company. They are mainly focusing on production and profit. In this situation, what should I do? What is your opinion on this matter? What will be the outcome of such activities?

Should I continue to work for this company, or would it be better for me to leave? I am seeking your opinion based on your experience.

Thank you.

Dear Ranjeetha, if the Senior HR Manager has represented the issue and management has not heeded his views, there might be some misunderstanding. Let him take up the matter again after collecting details on profitability and productivity once salary hikes are provided.

You are asking about the outcome of the management's stubborn attitude, which can lead to continued unrest among employees and gradual separation from such organizations. For your concern about continuing or discontinuing the job, you need to make a serious decision considering the pros and cons, as it involves your job, career prospects, and your family's needs. Make this decision when you have a job offer on hand to accept.