How Can Employees Claim Unpaid Salaries When Legal Disputes Delay Payments?

Dear Team,

A Punjab-based company had a project association with a branded client and had deployed skilled manpower at Pan India locations. Due to organizational challenges and legal issues, the contract was prematurely closed, and the client accepted the same. There was a legal dispute pending wherein, through no fault of the association, the client had been pulled in. As a result, the deployed company did not receive the payments due, as legal challenges were not closed despite giving sufficient time to the client.

The company has not paid its deployed resources three months' salary and has not made a settlement till now. What is the procedure for the employees to claim the amount? The client has confirmed that they will release the payments once the legal challenges are resolved, which the organization is not doing. Please let us know the further proceedings, as employees are facing challenges due to pending salaries.

Dear Sireesha,

In a situation like this, employees can take several steps to claim the amount owed to them. Here are some general steps that could be taken, but it's important to note that specific legal advice may be necessary based on the laws and regulations in the relevant jurisdiction:

Consult a Legal Professional

The first step for the employees would be to seek legal advice from a lawyer or legal professional specializing in labor law. They can help assess the situation and determine the best course of action.

Review Employment Contracts and Agreements

Employees should review their employment contracts and any relevant agreements to understand their rights and obligations, as well as any clauses related to non-payment or delayed payment.

Document Everything

It's important for employees to gather and document all relevant information, including pay stubs, employment contracts, communication with the company, and any promises or commitments made regarding payment.

Communicate with the Company

Employees should communicate with the company, preferably in writing, to request the payment owed to them. It's important to keep a record of all communication.

Explore Mediation or Arbitration

Depending on the situation and the terms of the employment contracts, mediation or arbitration may be an option to resolve the dispute outside of court.

File a Legal Claim

If the company continues to refuse payment, employees may need to file a legal claim or take the matter to court. Legal counsel can guide them through this process.

It's important to note that the specific steps and procedures may vary based on the laws and regulations in the relevant jurisdiction, as well as the details of the employment contracts and agreements. Therefore, seeking legal advice tailored to the specific circumstances is crucial.

Regards,

Employee Rights in Non-Payment of Salary Situations

The employees can challenge the non-payment of salary against their employer only, i.e., the Punjab-based Company. If the amount is pending from the client company, that is their problem, and they should recover it from their clients. It has nothing to do with the payment of wages to the employees.

Since the contract has been terminated, the employees would be jobless since then. The company should have retrenched the workers, paying whatever compensation is applicable. This would be over and above the salary dues pending. Of course, if the same employees have been deployed in some other projects, the compensation for the loss of job would not arise.

Now the employees can file a complaint before the appropriate authorities for non-payment of wages and closure of establishment without notice. They can also make the client company one of the respondents. Without this, no settlement can be made.