Increment When Project Is Under Loss

Dear Seniors,

We started a project in 2011 and hired a team of 145 people. Among them, one person who was taking care of administration as Asst. Manager Admin received an increment and promotion within 6 months. However, over time, the project incurred losses, leading to the termination of the team with a one-month notice period, except for the admin manager, who was retained due to other issues.

For the past one and a half years, we have been waiting for project approval and have been honoring the committed salary. Unfortunately, we have not released the incentive portion due to the lack of progress and eventual closure of the project.

Now, my admin manager is requesting the pending incentive and an annual increment. I believe that if the project is not successful or growing, the company may not be in a position to provide salary hikes or additional benefits.

I am seeking advice on how to handle this situation with this valuable employee.

Please communicate the company's business position to the employee clearly so that he can understand. If he is satisfied and supporting the organization, that is great. Otherwise, he may choose to leave, and the organization should be prepared for that.

Regards,
Kamesh

Dear seniors,

In continuation of the above case file: I have communicated the situation of the project and asked him to take relief as per company norms. However, he has argued with me about his career with the company, stating that in the last 2 years he has had no increments or growth. If the project is suddenly closed and he is asked to leave with notice and salary, he will take legal action as an ex-serviceman.

I then transferred him from the admin department to the sales and marketing department, which he has not yet accepted.

His reply to my transfer letter states that, as per the Directorate General Resettlement (DGR) norms, he is eligible for a 3-month notice period under DGR norms.

Another aspect to consider is that our company has a 3-month notice period mentioned during his joining. However, over time and under the circumstances, we have amended the notice clause to state that the notice period is 30 days from either side.

I am a bit confused about how a private limited company should follow the DGR norms when the company has appointed him on its own terms as per the Karnataka Shops and Establishment Act, 1961.

Kindly advise me.