How Should We Handle an Employee's Legal Claim for Unpaid Salary and Expenses?

Hello Everyone,

Employment and Resignation Issues

One of our Business Executives joined us on the 7th of March 2020. He attended the company training in Faridabad from the 4th to the 6th of March 2020. When asked about his resignation from his previous company, Wochardt India Ltd, he submitted it on the 5th of March 2020 using a fake email ID. However, upon sending a verification email to Wochardt, we discovered that he had not actually resigned from his previous employer. This information was revealed to us after contacting his reporting manager, Mr. K.L. Sharma, at his previous company.

Mr. Sharma confirmed that they had not received his resignation and requested us to send it to his correct email ID. Unfortunately, we failed to issue him an offer letter upon joining.

Work Commencement and Lockdown Challenges

He commenced working at the Kota headquarters on the 7th of June 2020, and we dispatched his visiting and company ID card on the 17th of March 2020. Due to the Covid-19 lockdown, we were unable to send his appointment letter. Our office reopened in the first week of June 2020, and all salaries were paid to him promptly during this period. Fieldwork for all employees also resumed in the first week of June.

Performance and Conduct Issues

In the third week, our 1st line manager in Kota and 2nd line manager in Jaipur informed us that he was not dedicating sufficient time to fieldwork, only working 1-2 hours instead of the company norm of 7-8 hours. Additionally, he was reportedly behaving inappropriately towards his reporting hierarchy. On the 26th of June, the Business Head visited Kota and scheduled a meeting with him at 2:00 PM, but he refused to attend, citing inconvenient timing. Consequently, we were compelled to suspend his fieldwork due to his misconduct and lack of productivity. His reporting was halted from the Head Office on the same day. As of now, we have not transferred his salary for June, and there has been no communication from either the manager or the representative regarding this matter.

Salary and Expense Claims

On the 9th of July, we received a notice from Mr. Iqbal claiming his June salary and expenses for March, April, and May.

Dear Dimpi, when an employee joins a company, generally he/she is placed under probation. Please check the conditions of employment mentioned in the appointment letter. If the employee is a probationer, then you could have terminated his services immediately.

Now the problem is that you have withheld the salary of the employee without assigning any reason. On account of misbehavior, did you issue the show-cause notice? You could have placed him under suspension also.

Even now, you may issue the show-cause notice and suspend him pending the inquiry. But then it is too late.

Thanks,

Dinesh Divekar

Dimpi, a caveat for you: direct names and organizational references should not be posted on public platforms like this as it goes against individual and organizational privacy. Thank you for your understanding.

Yes, the employee in question is indeed entitled to claim expenses and salary for the months in question, as you did not terminate him due to inactions and delayed correspondence.

Practical Advice:

1. What do your Corrective Action Procedures (CAPs) say about non-cooperation or non-fulfillment of duties? Typically, an employee is not put on CAP if they are still under probation. While still under probation, an employee can be terminated smoothly with a short and friendly notice from the organization's side.

2. Was the employee summoned to submit written answers to the raised concerns by HR/Line Managers? Was there a physical or virtual meeting held with the defaulting employee? Do you have any records of such interactions?

3. It is not legal to withhold salary and expenses without a reason, as the defaulting employee can take legal action, claiming they were never informed about any corrective procedures or communications from HR/Line Managers through emails or written means, which you failed to do. Verbal communications do not suffice in the corporate world. If the company HR intended to terminate him, why was the employee not taken off the payroll immediately, suspecting further non-cooperation and misuse of organizational resources?

4. If you are still uncertain about this hire, please take prompt action with a possible immediate termination and settle his dues until his last working date while there is still time.

5. The defaulting employee is within his rights to ask for all dues owed to him, primarily due to inactions and delayed correspondence from the organization. If necessary, please release the employee with respect, adhering to subtle HR policies and professionalism.

Remember, respect given is respect earned.