Can My Former Employer Deduct Money from My Account Without My Consent After Leaving?

In a multinational corporation (MNC), I worked for 4 years and 6 months. I informed my manager on October 8, 2020, about my resignation as I would be leaving for higher studies. However, due to the pandemic situation, the approvals arrived on October 15, 2020, with the release on October 17, 2020. I was supposed to serve a one-month notice period, which instead turned out to be 3 days, with the remaining days to be adjusted with my leaves. I received a No Due Form (NDF) stating my release date to be November 13, 2020, since the manager had promised to handle them accordingly. Following that, I received an amount credited for the month of October, November, and full and final settlement at the end of November 2020.

Now, after 6 months of my exit, HR has come back stating that I was wrongly credited for the months of October and November and need to repay for 15 days of October and the entire month of November. In addition, my release date changed to October 17, 2020, with missing notice period days, i.e., 27 days, which were indeed under recoverable in the full and final form received. Overall, 27 days + 15 days of October + 30 days of November basic + HRA are under recoverable. With the amount credited and needed to be recovered, my full and final settlement repayment is Rs. 72,000, which I am unable to understand because my full and final benefits + October salary seem to be just Rs. 7,420 from the amount previously credited.

Questions Regarding Salary Recovery

1. Does the employer have the right to debit the amount from the salary account without my approval?
2. If the glitch was created from their end and as I don't have proper clarity, do I need to repay the employer?
3. Can there be any compensation possible as the amount credited in November 2020 has been used, thinking that it is my full and final settlement?

PS: I was waiting for my relieving letter, and HR has come back after 6 months.

Response to Queries on Salary Recovery

1. The amount credited to your account cannot be deducted without your consent. If you are anticipating such a deduction, please transfer the balance amount to another account.

2. You need to dispute their calculation and justify the amount you received as due to you. Please clarify when you were actually relieved—whether it was on October 17th or November 13th. What happens to your leave encashment and other terminal benefits?

3. If you take a stand that you don't have sufficient funds to repay, there is not much the employer can do to recover it.

Employer's Rights and Payment Issues

Your employer could have held the amount before crediting it to your account but cannot ask the bank to debit the amount from your account. You can close this account or transfer the funds to another account if you anticipate any issues.

Payment for October and November

In response to your query regarding payment for October and November, it was justified as you were relieved from services on 13th November. You may provide your claim statement to justify any outstanding amounts not yet received.

Handling Postal Communication

If the letter was sent via Registered Post, Speed Post, or Ordinary Post, please disregard it if it was sent by Ordinary Post. It is advisable to heed Mr. KK HR's advice, and sharing the HR letter with a trusted colleague for clarity in suggestions would be beneficial.

If you are holding a salary savings bank account in the same branch from where your ex-employer is operating, they have the right to request the bank in writing to reverse the amount that was wrongly credited to your account.

You may write and request your employer to provide you with full details of your Full & Final settlement, including payment of your balance leave encashment. You may further add that with the non-receipt of requested documents within 7 days from the receipt of your letter/email, you will be compelled to write to the Assistant Labour Commissioner/Labour Enforcement Officer of the jurisdiction where your office is situated about the non-payment of your dues.

You may also write to your bank to reverse the wrongly debited (if you feel so) amount to your account immediately, failing which, you will be compelled to write to the RBI about their operating system.

Gentle Advice: If you know the company erroneously transferred the amount to your bank account as a human error, then they have every right to recover the same from you. (Like how we fight for our own dues)

Regards, Suresh

Bank's Authority on Account Debits

To my understanding, the bank cannot debit any amount from a customer's account at the behest of a third person. It makes no difference if the third person happens to be the employer or ex-employer of the customer and the amount happens to be wrongly credited. The only option for the employer is through due process of law.

However, there is a moral obligation of the employee to return the amount if wrongly credited.