Give a letter to court stating employee's retirement as employer was summoned by court?

Dear Mr. Ranjeet
Presume that this employee x is retiring in June 14, prepare a final settlement if possible or work out what could be his final settlement, inform the the court this is your total liability towards that employee, ask the court to pass necessary orders who should be beneficiary. Since there is a court order to you to pay Rs. 2.65 lakhs, you can deposit this employee's final settlement and place it before the court.
His Gratuity, PF and any other benefits should also be placed before court since there is direction for you to recover the said Rs. 2.65 lakhs. The employer is not liable anything beyond what is due for employee.
Regards.

Sir(s),

1. Some of experts/seniors in their comments earlier has opined for recovery of amount of Rs. 2 lakh from the full & final settlement of the retiring employee including from his Gratuity and Provident Fund. In this connection, I may submit that in my view such like recovery is not feasible as per provisions of law as per details below.

2. Section 7(2)(h) of the Payment of Wages Act, 1936 authorises the employer to deduct amounts from the wages of employee as per order of a Court or other authority competent to make such order. But such deductions must not exceed 50% of wages of employee -Section 7(3). But the position is different in respect of amounts of Gratuity & Provident Funds.

3. Section 13 of The Payment of Gratuity Act, 1972 bars the jurisdiction of any Hon'ble Courts to order attachment of the amount of gratuity due to an employee. Similar provisions exists under section 10 of the Employees' Provident Fund & Misc. Provisions Act, 1952. The position can be different in respect of other heads of amounts,if any, payable at the time of such full & final settlement of the retiring employee.

4.The order of the hon'ble court, if issued, regarding attachment of the amounts of Gratuity or Provident Funds can be challenged in the higher courts and in that event of delay, the retired employee will naturally demand compound interest from employer for such delay as per section 8 of the Gratuity Act, 1972.

Therefore, seniors/HR experts may please re-consider the issue.

Dear friends,

This is to clarify certain opinions in this respect. As an employer he is duty bound to obey the orders of the court even if it is related to the F & F settlement. Having said that courts will not appreciate the stand of the employer raising objections quoting all case laws which went against recovery/attachment from F & F settlement. Might be the court would direct the employer to deposit the kitty to the respective Appropriate Officials under the Gratuity Act and EPF Act pending disposal of the litigation from the decree holder and the employee. This could be the safest way to avoid all repercussions. I don't thing Hon'ble Civil Courts not aware of the judgments of higher courts which prohibited recovery from F & F settlement but still injunctions are passed. Because I personally faced such attachments orders despite the fact they are passed relating to "all payments accrued & payable to the employees concerned" which means without saying includes F & F also. The surprise is that included EPF payment also (which ultimately struck down by Session court). Moreover it is needless for employers to go on thankless appeals to the higher courts citing all the land mark judgments by which action employer may be branded as taking sides to the employee and denying the share of legitimate stakeholders. Therefore it is necessary to play safe in the context from the employer's point of view.

Dear Mr. Harsh,
Your points raised are valid but these issue should have been raised before the court when the summons are received and raising it now that too when the employee is retiring is of no use. It is a fact more then 50% is deducted and paid to wife through the court. Hence, after obeying the court order, the employer has very limited scope now to change his stand, but can raise the issue raised here even now, but what is the use when the employee is retiring. Ultimately the courts are supreme and orders are binding on citizens include employer. The issue here is how to proceed with court order and not what are the legal remedies available. Raising the remedies at the Fag end is of no issue when already complied with court orders.

Dear Chandrashekharji,
Thanks for expressing your views on my remarks as above of yesterday. As per facts of the case the court had ordered for recoveries from the wages of the employee. The Hon'ble court, perhaps has not ordered recoveries from the retirement benefits of the employees. The retirements benefits viz. amounts of Gratuity and Provident Funds are such funds and amounts which cannot be attached by any decree or the order of the hon'ble court.
This is what I have tried to submit the legal position to the HR community taking part in this discussion.
I am not aware as to what is the defence, the affected employee want to take in the case.
However, if desired, the employer can explain the legal position to the hon'ble court on next date of hearing.

How many years of service did the employee put in, in your company.
Please note that Provident Fund & Gratuity can not be attached.
Hence, as suggested by experienced members here, please submit to Court, a working sheet
by your company, about the probable amount, the employee would be getting (by way of
his salaries, leave encashment benefits, any contributions byhim in Staff welfare fund, bonus)
alongwith your application intimating Court about his retirement date, by referring to
the Hon'ble Court's direction to your company.
If his F&F amount will be more than the recoverable amount, as directed by Court,
no problem. You can straight away offset this amount and pay the balance to the employee.
Thanks
R K Nair

Dear Seniors,
Thanks for your valuable guidance.
I would like to infirm you that the employee has almost completed more than 30 years with the company. Presently, he is on leaves on medical grounds . beside very less number of leave encashment there is nothing which employer has to pay towards full & final settlement.
If court will direct us to deduct the amount from PF and gratuity, what is the next course of action that management as well as employee can take? \
Surely, we are going to present a letter about his retirement in the court
Ranjeet

If his F&F amount is likely to be very less, it is better to send communication to Court
about his retirement and his nominal dues from the company, well in advance.
and wait for Court's further orders.
Thanks
R K Nair

Dear Jeeni,

After going thro' all the posts my suggestion to you, in the circumstances explained is -

1) As many friends suggested Workout all the amounts, including Final settlement like, Gratuity, Leave Encashment & salary, PF (who has to pay this, are you an exempted establishment maintaining your won PF Trust or you have been remitting all the PF contributions to the EPFO and distributing the annual statement to the employees ?) If you don't have your EPF Trust then PF settlement is not your headache), bonus, and other payments and submit an affidavit to the court and seek directions from the court.

2) And inform the retiring employee asking him to produce NOC from the Court or bring the court order vacating/cancelling the injunction/decree This is necessary because once you pay him fully or partly recovering from him any money is practically not possible. So take care with a caution.

3) PF and Gratuity cannot be withheld/delayed or attached so you have to issue him necessary forms for final settlement and collect duly filled and forward to the concerned authorities, with a remark quote from the operating portion of the Court orders verbatim by attaching a copy of the court order and state the matter is subjudice. How about Gratuity? do you pay from your funds or thru' LIC or other agencies ?.

All these steps might help you to avoid over due interest accruing after one month of his retirement.

If the date of retirement of the employee was June14,2014 then it is past now.
What action is taken?
What is the court order by now,if any?