Is It Legal for My Former Employer to Withhold Salary and Gratuity Over Uncollected Dues?

I had been working in a private firm from 1st August 2010 as Manager of Sales & Marketing until January 2018. After I submitted my resignation letter, they accepted it, but they have not paid my salary for December 2017 and 20 days' salary in January 2018. Additionally, they have not paid my gratuity amount, citing that I have not collected outstanding dues from the market. I have returned all company materials, completed the exit forms, and handed them over. Is it legal for them to do this to me? Moreover, they have subjected me to significant mental anguish.

Gratuity Entitlement and Company Obligations

If you are entitled to gratuity, then your company cannot withhold your gratuity amount for the above-mentioned reason. Normally, gratuity is payable within 30 days from your last working day, so you need to wait for it. You can also follow up with your company for the same. If they refuse to make the payment of gratuity and the remaining full and final payment, then you can file a written complaint against the company with the labor commissioner of your area. This action will surely compel the organization to pay your entitled dues.

I hope this message finds you well. I am writing to bring to your attention that I am still awaiting the settlement of my dues, including the gratuity amount, from the company. I kindly request that the company promptly processes and releases the outstanding payments owed to me.

As per my understanding, since I have duly served the notice period and there is no agreement in place that mandates me to collect dues from customers post my resignation, there should be no hindrance in settling my dues. Therefore, I expect the company to clear the pending dues within the next week. Failure to do so may compel me to seek legal recourse by approaching the labor court to recover the outstanding dues, including the gratuity amount.

I trust that you have on record the acceptance of my resignation letter, which would serve as crucial documentation if the matter were to proceed to court. As for the issue of mental distress caused during this period, I understand that proving such claims without a full court hearing could be challenging. However, I am willing to set this matter aside for the time being.

I appreciate your prompt attention to this matter and look forward to a swift resolution. Your cooperation in resolving this issue amicably would be highly valued.

Thank you for your understanding and cooperation.

Warm regards

Ensuring Collection of Outstanding Dues

Was it your sole responsibility to ensure outstanding dues are collected? Have you informed the company about the outstanding dues?

Challenging Nonpayment of Salary and Gratuity

Nonpayment of salary and gratuity can be challenged by going to the Labour Commissioner. The company has accepted the resignation, and now refusal to pay your legally entitled dues is just a ploy to save some money at the cost of the employee.

Communicating with the Company

Write a clear, polite letter placing all dues from the company on record and ask for it to be paid immediately. Send the communication by Speed Post to have proof of delivery to the company. Mental torture is not easy to prove, but nonpayment of legally entitled dues is easy to prove.

Dear colleague, Collecting outstanding dues from customers may be part of your job responsibilities, but it cannot be a condition precedent to the payment of your unpaid salary and gratuity upon your resignation, which has been accepted without any conditions by the company. As suggested, write a polite but firm letter giving details of your dues and requesting payment within 7 days. Should the payment not be made within the specified timeframe, you will be forced to approach labor authorities, including the court, for the recovery of the same with interest.

Regards, Vinayak Nagarkar HR Consultant

Dear Friend,

You have lodged a complaint that your wages for December were not paid by your employer at the local labor office. You can either make an application in person or send it by registered post to your employer requesting payment of gratuity and then wait for a considerable period. If no payment is made, you should lodge another complaint for gratuity at the labor office.

Handling Superannuation Deductions

One of our employees in charge of the body shop has superannuated. He has been settled as per the norms. During the period of F&F clearance, we found an amount of 52,000/- that he was supposed to collect from the insurance company, which he failed to collect or rather rejected the claim. The amount due to the company can be deducted from his full and final settlement, which is part of the superannuation. We have deducted the above amount, and the balance settled. Now, he is asking us that the amount deducted is from the Gratuity, hence we need to return the same. How to deal with this case? Can anyone give your opinion?

Gratuity cannot be attached by even a court order.

The question of insurance claim needs to be clarified and how the employee is responsible if the claim is rejected.