Contract Employee Left Without Resignation: Should We Release Their Final Salary?

Dear All,

Our organization is recruiting employees through outsourcing to meet the manpower requirements. They are being paid through a contractor, and our organization pays the contractor, who in turn pays the employees' salaries. If a contract employee leaves the organization without resigning, should we release his salary for the month of exit, or can we hold the salary without releasing it? If we hold the salary, what problems might we face?

Regards,
MARS

Contract Worker Salary and Resignation

If you hold the salary of a contract worker, it will be presumed that you have overall control over the workers. Why should a contract worker give resignation to you? That itself shows that the contract is a sham. If he has worked in your establishment, you should pay the contractor whatever is the salary that the contractor pays the worker. You cannot advise the contractor to hold the salary, nor can you hold it from the total amount payable to the contractor.

Managing Contractual Arrangements

In such arrangements, it is always good if you take only the number and not the name. The contractor can send any person, X or Y. What is important is that the number of persons deployed should not be less than what is required. If one person is absent, the contractor should send somebody else to occupy the vacancy. In such genuine contracts, there is no scope for the principal employer demanding resignation and holding salary for want of resignation.

Thank you, Madhu.

If, in case, the principal employer holds the salary of the contract employee, what are the legal problems the principal employer has to face if the employee proceeds legally? Or, what are the possible ways for the employee to claim his salary?

Regards,
Mars

Employer Responsibilities in Salary Payment

First of all, it is not the principal employer who pays the salary. As such, the question of the principal employer withholding salary does not even arise. Now, having done so, the employee can file a complaint before the Labour department. In such occasions, the worker will use the opportunity to prove that the contract is a sham or a camouflage arrangement. This will backfire on the employer.

The above situation is a scenario when a knowledgeable worker may take action against the employer. However, since there are a lot of such arrangements and the labour department is least interested in enforcing the CLRA Act, you can do as you like.