An employee causes revenue loss to the company, based on the information available. Company issues show cause notice asking explanation from the employee and informing about the loss. Employee replied for the letter, stating henceforth it will taken care of and asked apology
However, employer has not convinced and deducts the money (approx 5% on gross salary) due to revenue loss from his salary. Is it permissible to deduct from his salary? If yes, under what grounds of the Shop and Establishment act.
Request view and opinion ..
Regards,
Jagadish
From India, Chennai
However, employer has not convinced and deducts the money (approx 5% on gross salary) due to revenue loss from his salary. Is it permissible to deduct from his salary? If yes, under what grounds of the Shop and Establishment act.
Request view and opinion ..
Regards,
Jagadish
From India, Chennai
The employer can recover any loss caused by the employee by his misconduct. But the loss should be quantifiable. In the case of misappropriation of money, the amount mis appropriated is a certain sum and if he employee also admits that he had taken the money, you can go ahead with recovery of the amount from him either in lump sum or in installments from salary.
At the same time, if it is an imaginary loss, say the employee was given an assignment of meeting a client and briefing him of the features of your product but due to any reason the employee could not convince the client and as a result of his weak performance, the company lost an order, say an order worth Rupees 100 crores, this is not a quantifiable loss which can be attributed only to an employee. Here various other issues will also come. Very strictly speaking the person who hired the employee and the person who is supposed to give him training are also responsible because the first person had selected a wrong person and the second person had failed to give proper training to him. Therefore, such losses cannot be recovered from the employee in full. but the employer can impose fine and the fine can be a percentage of his salary as decided by the employer.
If the employee concerned is an employee coming under the purview of Payment of Wages Act, ( an employee whose salary does not exceed Rs 24000 per month) then the total amount of fine should not be more than 3% of the total salary. The fine collected should be used only for any staff welfare activities or should be deposited in the Labour welfare Fund.
From India, Kannur
4193At the same time, if it is an imaginary loss, say the employee was given an assignment of meeting a client and briefing him of the features of your product but due to any reason the employee could not convince the client and as a result of his weak performance, the company lost an order, say an order worth Rupees 100 crores, this is not a quantifiable loss which can be attributed only to an employee. Here various other issues will also come. Very strictly speaking the person who hired the employee and the person who is supposed to give him training are also responsible because the first person had selected a wrong person and the second person had failed to give proper training to him. Therefore, such losses cannot be recovered from the employee in full. but the employer can impose fine and the fine can be a percentage of his salary as decided by the employer.
If the employee concerned is an employee coming under the purview of Payment of Wages Act, ( an employee whose salary does not exceed Rs 24000 per month) then the total amount of fine should not be more than 3% of the total salary. The fine collected should be used only for any staff welfare activities or should be deposited in the Labour welfare Fund.
From India, Kannur
Dear Jaggiking,
You have clear one thing here, has the fine/deduction been made or yet to be made?
As explained clearly by learned friend Mr.Madhu you cannot deduct the same unless proved.
More over an intimation in writing to be given to him before deducting the fine.
From India, Hyderabad
You have clear one thing here, has the fine/deduction been made or yet to be made?
As explained clearly by learned friend Mr.Madhu you cannot deduct the same unless proved.
More over an intimation in writing to be given to him before deducting the fine.
From India, Hyderabad
Dear Jagadish,
This is in addition what previous two learned members have said. I recommend you conducting domestic enquiry and find out facts behind the revenue loss. In fact your post is too short and you have not written what was the designation of the employee, what were the duties and why he is being blamed for the revenue loss? How the revenue loss discovered, when discovered, who discovered it and what his HOD was doing when the loss was happening? All these facts must be investigated very well.
Just because the person in question has accepted the blame does not mean that he only should be held responsible. It could be systematic failure also and hereafter what precautionary measures that your company needs to follow to avoid recurrence of such incidents in future that also needs to be pondered on.
Thanks,
Dinesh Divekar
From India, Bangalore
This is in addition what previous two learned members have said. I recommend you conducting domestic enquiry and find out facts behind the revenue loss. In fact your post is too short and you have not written what was the designation of the employee, what were the duties and why he is being blamed for the revenue loss? How the revenue loss discovered, when discovered, who discovered it and what his HOD was doing when the loss was happening? All these facts must be investigated very well.
Just because the person in question has accepted the blame does not mean that he only should be held responsible. It could be systematic failure also and hereafter what precautionary measures that your company needs to follow to avoid recurrence of such incidents in future that also needs to be pondered on.
Thanks,
Dinesh Divekar
From India, Bangalore
RIGHT..POINT
DEDUCTION OF SALARY OF EMPLOYEE IS A PROVISION ONLY...NOT IN PRACTICE..
ONLY IN RARE CASES LIKE DRIVERS OF VEHICLES CAUSE OF CONCERN FOR BREAKAGE OF WINDOW GLASS OR DAMAGE TO THE VEHICLE DUE TO PROVED NEGLIGENCE OF DRIVING...ETC.
PHYSICAL PROPERTY DAMAGE MUST BE PROVED EVIDENCE THEN ONLY PERMISSIBLE..
DELAY IN ATTENDANCE
LOST OF CUSTOMERS SATISFACTION REGARDING QUALITY OF GOODS CAN'T BE COVERED .
MORE OR LESS SPECIFICALLY UNDER SHOPS N ESTTS ACT DEDUCTION OF SALARY IN INSTALMENTS OF THE WORKER IS NOT UNDER PRACTICE IN ANY SHOP OF ESTT.
THE TOTAL REASON SHOULD BE TOLD
..UNLESS GUESS WORK OF OURS MIGHT NOT BE useful...
From India, Nellore
DEDUCTION OF SALARY OF EMPLOYEE IS A PROVISION ONLY...NOT IN PRACTICE..
ONLY IN RARE CASES LIKE DRIVERS OF VEHICLES CAUSE OF CONCERN FOR BREAKAGE OF WINDOW GLASS OR DAMAGE TO THE VEHICLE DUE TO PROVED NEGLIGENCE OF DRIVING...ETC.
PHYSICAL PROPERTY DAMAGE MUST BE PROVED EVIDENCE THEN ONLY PERMISSIBLE..
DELAY IN ATTENDANCE
LOST OF CUSTOMERS SATISFACTION REGARDING QUALITY OF GOODS CAN'T BE COVERED .
MORE OR LESS SPECIFICALLY UNDER SHOPS N ESTTS ACT DEDUCTION OF SALARY IN INSTALMENTS OF THE WORKER IS NOT UNDER PRACTICE IN ANY SHOP OF ESTT.
THE TOTAL REASON SHOULD BE TOLD
..UNLESS GUESS WORK OF OURS MIGHT NOT BE useful...
From India, Nellore
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Employee Salary file - India 2016 AB.xls