Greetings! This is my probation period in this IT company. During the last two months, there was really not much work assigned to me as I was working from home as asked by my boss. But now, they have deducted 60% of my monthly salary from the last two months without any prior notice or discussion. At the time of joining, I had only received an offer letter which has no mention of the span of the probation period or any terms or conditions letter attached to it. It was more like plain text consisting of the mention of my monthly in-hand salary and the last date of document verification and joining. Now, when I inquired about the deducted amount with my HR, he mentioned that it is in their HR policy, which is still unknown to me since I have not received any terms and conditions letter from their side so far. My question is, can they deduct from my monthly salary without any prior discussions only because I'm on my probation period? Thank you.
From India, New Delhi
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From India, New Delhi
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Dear Lalita,
Salary is the monetary compensation payable to the employee for the services he has done during the particular wage period as already agreed in the contract of employment. Whether it is WFH or work at the place of work, when some work is assigned to the employee irrespective of its quantity, the employee falls into the disposal of the employer. Therefore, there cannot be unilaterally decided reduction in the agreed salary by the employer under the pretext of insufficient work. The status of the employee such as probationer or confirmed one does not extend a free hand to the employer to effect reduction in the predetermined salary of the employee. Certainly it is a clear-cut breach of the terms of the contract of employment as well as illegal deduction under the Payment of Wages Act, 1936, if applicable.
From India, Salem
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6108Salary is the monetary compensation payable to the employee for the services he has done during the particular wage period as already agreed in the contract of employment. Whether it is WFH or work at the place of work, when some work is assigned to the employee irrespective of its quantity, the employee falls into the disposal of the employer. Therefore, there cannot be unilaterally decided reduction in the agreed salary by the employer under the pretext of insufficient work. The status of the employee such as probationer or confirmed one does not extend a free hand to the employer to effect reduction in the predetermined salary of the employee. Certainly it is a clear-cut breach of the terms of the contract of employment as well as illegal deduction under the Payment of Wages Act, 1936, if applicable.
From India, Salem
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Dear Lalita Joshi,
This is in addition to what Mr. Umakanthan M has written. He has given his reply from a legal perspective.
You have written that while joining the IT company, you were issued with the "Offer Letter". However, has the appointment letter been issued? This letter is issued immediately after the employee joins. An appointment letter is a proper agreement between an employer and an employee.
Nevertheless, reducing the salary of a newly joined employee without taking him/her into confidence does not behoove well for the company. It speaks of the mindset of the owner of the company. While HR may give a justification for a policy under which the salary has been reduced, it is a foregone conclusion that the employers use the shoulder of the HR to shoot. To save their faces, HR comes up with just some facetious justification.
You have two options now. The first one is to fight for your rights. For this, you may submit the application to the MD of the company for the restoration of your salary. If he does not reconcile, then you are free to approach the Labour Officer of your area. Please note that I am recommending approaching the labour officer and not the labour lawyer.
The second option is, of course, to accept it as your fate and move on. Nevertheless, it is not easy to continue with the bitterness at the very beginning of the tenure. However, whether to continue with the employment or not will depend on your financial needs and other domestic responsibilities.
General Comments: Half a century is over since management science has recognized "human" as a resource. This resource does not depreciate, and by harnessing the power of this resource, companies the world over have made skyrocketing progress. On the other hand, a good number of companies believe that they can progress by laying a trap of employment for the unsuspecting employees. The progress and business expansion depend on the trust that employees repose in their employers. Nevertheless, not many employers understand the power of trust, and that is a tragedy.
Thanks,
Dinesh Divekar
From India, Bangalore
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This is in addition to what Mr. Umakanthan M has written. He has given his reply from a legal perspective.
You have written that while joining the IT company, you were issued with the "Offer Letter". However, has the appointment letter been issued? This letter is issued immediately after the employee joins. An appointment letter is a proper agreement between an employer and an employee.
Nevertheless, reducing the salary of a newly joined employee without taking him/her into confidence does not behoove well for the company. It speaks of the mindset of the owner of the company. While HR may give a justification for a policy under which the salary has been reduced, it is a foregone conclusion that the employers use the shoulder of the HR to shoot. To save their faces, HR comes up with just some facetious justification.
You have two options now. The first one is to fight for your rights. For this, you may submit the application to the MD of the company for the restoration of your salary. If he does not reconcile, then you are free to approach the Labour Officer of your area. Please note that I am recommending approaching the labour officer and not the labour lawyer.
The second option is, of course, to accept it as your fate and move on. Nevertheless, it is not easy to continue with the bitterness at the very beginning of the tenure. However, whether to continue with the employment or not will depend on your financial needs and other domestic responsibilities.
General Comments: Half a century is over since management science has recognized "human" as a resource. This resource does not depreciate, and by harnessing the power of this resource, companies the world over have made skyrocketing progress. On the other hand, a good number of companies believe that they can progress by laying a trap of employment for the unsuspecting employees. The progress and business expansion depend on the trust that employees repose in their employers. Nevertheless, not many employers understand the power of trust, and that is a tragedy.
Thanks,
Dinesh Divekar
From India, Bangalore
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True, an employer is not expected to reduce salary without assigning reasons and without taking the employee concerned into confidence. If any employer does so, the employee can approach the labor department. However, in practice, this may not work well, especially in highly organized industries supported by employer associations. In this scenario, considering the employee is in the IT sector, approaching the Labor department could lead to potential blacklisting and harm the employee's career, given the visibility and influence of IT company associations. Some employers even resort to publicly shaming employees on platforms like LinkedIn, which can complicate matters further when HR relies heavily on such platforms for recruitment.
Another issue specific to IT employees is that they may have managerial approval rights that exempt them from certain labor laws safeguarding workers, such as the Industrial Disputes Act or the Payment of Wages Act. If such an employee lodges a complaint with the Labor Officer and the management asserts the Officer lacks jurisdiction, it can create a deadlock. Hence, it is advisable to seek a bilateral settlement between the employee and the employer before pursuing legal action.
The employee's position is particularly vulnerable during probation, where employers are generally not allowed to reduce salary. Terminating an employment contract solely because an employee questioned a management decision to cut salary reflects poorly on ethical standards. However, if the employment contract explicitly states that termination during the probation period can occur "without notice and without assigning any reasons thereof," a termination letter without specifying a reason would hold legal validity.
From India, Kannur
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Another issue specific to IT employees is that they may have managerial approval rights that exempt them from certain labor laws safeguarding workers, such as the Industrial Disputes Act or the Payment of Wages Act. If such an employee lodges a complaint with the Labor Officer and the management asserts the Officer lacks jurisdiction, it can create a deadlock. Hence, it is advisable to seek a bilateral settlement between the employee and the employer before pursuing legal action.
The employee's position is particularly vulnerable during probation, where employers are generally not allowed to reduce salary. Terminating an employment contract solely because an employee questioned a management decision to cut salary reflects poorly on ethical standards. However, if the employment contract explicitly states that termination during the probation period can occur "without notice and without assigning any reasons thereof," a termination letter without specifying a reason would hold legal validity.
From India, Kannur
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Reality is different. Many organizations are either not paying salaries or paying less. Employees are also losing jobs. Whether the employee is a workman or not, the employers are pleading to the Labour Directorate about the business status. In most cases, the Labour Directorate are silent spectators.
However, there are employers who communicate with employees about the business situation before taking any action.
In the current situation, it would be better to adjust with the employer and wait for a better business situation in the future.
S K Bandyopadhyay (WB, Howrah)
CEO - USD HR Solutions
98310 81531
From India, New Delhi
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However, there are employers who communicate with employees about the business situation before taking any action.
In the current situation, it would be better to adjust with the employer and wait for a better business situation in the future.
S K Bandyopadhyay (WB, Howrah)
CEO - USD HR Solutions
98310 81531
From India, New Delhi
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I was provided with the offer letter only, at the time joining and the appointment letter has not been issued by them so far.
From India, New Delhi
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From India, New Delhi
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You should have accepted the offer and a copy returned to the company. That is enough to establish an employer-employee relationship. As already mentioned, you have legal protection only if your position in the company is similar to a worker. Otherwise, you will have to approach a civil court for breach of contract.
From India, Kannur
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From India, Kannur
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I am assuming that the case is during the COVID lockdown period. Many companies have reduced salaries as they do not have revenue and cash flow due to the impact of the lockdown. Some companies have simply removed people, which in the case of probation, is very easy.
At least, you have a job still, though at lower pay during a difficult position.
I agree it is unprofessional of the company not to intimate you in advance of pay cuts during the WFH period. It is up to you to decide your course of action. If you don't like what they have done, then search for a new job and leave. During probation, probably you don't need to give notice either. If you want to stay, go to the top guy in the company and tell him how you do not appreciate the way they have done this thing and how you would be happy to comply if they had just bothered to tell you.
The last way is to demand you get paid the full amount and threaten legal action, but that method of burning bridges is not something I would recommend to anyone without a specific reason to justify it.
From India, Mumbai
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At least, you have a job still, though at lower pay during a difficult position.
I agree it is unprofessional of the company not to intimate you in advance of pay cuts during the WFH period. It is up to you to decide your course of action. If you don't like what they have done, then search for a new job and leave. During probation, probably you don't need to give notice either. If you want to stay, go to the top guy in the company and tell him how you do not appreciate the way they have done this thing and how you would be happy to comply if they had just bothered to tell you.
The last way is to demand you get paid the full amount and threaten legal action, but that method of burning bridges is not something I would recommend to anyone without a specific reason to justify it.
From India, Mumbai
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Enforcement of negative covenants in employment terms.pdf