Greetings of the day to all seniors.
I am working in a metal manufacturing industry. Due to some financial issues, we are not able to pay salaries to our executives and above for the time being. Are there any legal implications if we are forced to withhold salaries for more than two months? If so, could you please provide references as well?
Thank you,
Shailendra
Senior Executive HR & IR
From India, Silvassa
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I am working in a metal manufacturing industry. Due to some financial issues, we are not able to pay salaries to our executives and above for the time being. Are there any legal implications if we are forced to withhold salaries for more than two months? If so, could you please provide references as well?
Thank you,
Shailendra
Senior Executive HR & IR
From India, Silvassa
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Dear Shailendra,
Instead of thinking in a legal way, please consider a more humanitarian approach. You may be in a good position to support your family without your salary for more than two months. However, not everyone can manage to go without their salary for that long. Therefore, I urge you to resolve the issue as soon as possible, rather than prolonging it for more than two months.
Thank you.
From India, Kumbakonam
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1189Instead of thinking in a legal way, please consider a more humanitarian approach. You may be in a good position to support your family without your salary for more than two months. However, not everyone can manage to go without their salary for that long. Therefore, I urge you to resolve the issue as soon as possible, rather than prolonging it for more than two months.
Thank you.
From India, Kumbakonam
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Thank you very much, Ramakant Sir. You have provided really useful information.
Dear Bhaskar ji, you are also right. However, if the organization is unable to pay salaries on time, we as HR personnel will need to think outside the box.
From India, Silvassa
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Dear Bhaskar ji, you are also right. However, if the organization is unable to pay salaries on time, we as HR personnel will need to think outside the box.
From India, Silvassa
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The only Act to deal with payment of wages in India is the Payment of Wages Act, 1936, which unfortunately is not applicable to persons with wages above Rs. 18,000 per month. Therefore, there is no legal impact if salary is delayed for employees with a salary above Rs. 18,000 per month.
Varghese Mathew
09961266966
From India, Thiruvananthapuram
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Varghese Mathew
09961266966
From India, Thiruvananthapuram
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Please don't think out of the box, because you have taken work from them, and they have spent their time on you. Also, their families are depending on them, so it is always better to think in a humanitarian way instead of thinking only for oneself. As HR professionals, we have to provide justice to both employees and the organization. This is my view; excuse me if I am wrong.
With Best Regards,
Suresh
From India, Bangalore
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With Best Regards,
Suresh
From India, Bangalore
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Dear Shailushukla,
I totally agree with Mr. Verghese's view. As mentioned above, executives are not considered as workers or labor. Therefore, the Payment of Wages Act shall be applicable in this case.
On the contrary, in view of Mr. Ramakant, I would like to share here that the Delay of Payment Act shall be applicable only when a payment date is specified in the contract.
So, the Delay of Payment Act can be valid under The Indian Contract Act, 1872, as there should be a commercial contract between two parties. However, it is challengeable to appeal under the Delay of Payment Act as I believe that none of the companies mentioned the committed salary payable date in any employment letter.
From India, Mumbai
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I totally agree with Mr. Verghese's view. As mentioned above, executives are not considered as workers or labor. Therefore, the Payment of Wages Act shall be applicable in this case.
On the contrary, in view of Mr. Ramakant, I would like to share here that the Delay of Payment Act shall be applicable only when a payment date is specified in the contract.
So, the Delay of Payment Act can be valid under The Indian Contract Act, 1872, as there should be a commercial contract between two parties. However, it is challengeable to appeal under the Delay of Payment Act as I believe that none of the companies mentioned the committed salary payable date in any employment letter.
From India, Mumbai
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Dear All,
I have read numerous articles on this topic within the past 24 hours, and the conclusion is that if an employee is earning more than 18000/- per month and the company halts his salary, he cannot take any legal action.
If I am mistaken, please correct me.
Regards, Shailendra
From India, Silvassa
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I have read numerous articles on this topic within the past 24 hours, and the conclusion is that if an employee is earning more than 18000/- per month and the company halts his salary, he cannot take any legal action.
If I am mistaken, please correct me.
Regards, Shailendra
From India, Silvassa
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Dear Shailendra,
Your perception is entirely wrong. It is not that the individual cannot do anything legally. As they are qualified and thinking of their future and their livelihood, they are not approaching the court of law. But whenever the tolerance level crosses its border, then the company has to face the consequences. They can easily create the records for non-payment and they can approach a good lawyer to drag the company in front of the court of law and further close its operation. So do not underestimate their power.
From India, Kumbakonam
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Your perception is entirely wrong. It is not that the individual cannot do anything legally. As they are qualified and thinking of their future and their livelihood, they are not approaching the court of law. But whenever the tolerance level crosses its border, then the company has to face the consequences. They can easily create the records for non-payment and they can approach a good lawyer to drag the company in front of the court of law and further close its operation. So do not underestimate their power.
From India, Kumbakonam
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I have seen all the above posts. However, I still suppress the motive of the question "Is there any law or act to recover these withheld salaries from the employer?" If the full or more than half of the salary per month has been on hold for more than 6 months, or the total salary amount has increased by 1.5 Lac or 2 Lac and is still accumulating, does it show the non-competitiveness of the worker?
The question that arises is: if a person is not getting his salary for that long (more than 6 months), why is he still working with that employer? Why didn't he leave? Is he competitive or not? Please reply.
From India, Delhi
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The question that arises is: if a person is not getting his salary for that long (more than 6 months), why is he still working with that employer? Why didn't he leave? Is he competitive or not? Please reply.
From India, Delhi
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My opinion is that the stoppage of anyone's salary is an offense and goes against natural justice.
Don't think that the persons "come under the purview of the word employee or worker or labor" and that his salary is not defined under some limitation of rupees. Okay?
Beyond any act, there is one law of the land, the Constitution of India. All labor laws and other existing acts are framed based on that.
Regarding your question, do not consider stopping salaries. If you are unable to run the factory at a profit, cease operations and declare closure according to the law's norms. Those employees are covered under the Minimum Wages Act, and you have an obligation to pay all your employees before the 7th of every month.
In the Bhopal gas tragedy, even foreign owners and partners were brought to trial here. It is better to take loans from suitable banks and pay regularly.
According to the Minimum Wages Act, if the employer lacks the capacity to pay full salaries for 100 workers but can only pay 60 persons, engage only 60 persons and pay their salaries regularly.
One more suggestion: these types of inquiries go against labor laws. If any trade union or NGOs file a case against the firm, or if any related court takes suo motu action against the company, it may lead to legal consequences.
From India, Nellore
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Don't think that the persons "come under the purview of the word employee or worker or labor" and that his salary is not defined under some limitation of rupees. Okay?
Beyond any act, there is one law of the land, the Constitution of India. All labor laws and other existing acts are framed based on that.
Regarding your question, do not consider stopping salaries. If you are unable to run the factory at a profit, cease operations and declare closure according to the law's norms. Those employees are covered under the Minimum Wages Act, and you have an obligation to pay all your employees before the 7th of every month.
In the Bhopal gas tragedy, even foreign owners and partners were brought to trial here. It is better to take loans from suitable banks and pay regularly.
According to the Minimum Wages Act, if the employer lacks the capacity to pay full salaries for 100 workers but can only pay 60 persons, engage only 60 persons and pay their salaries regularly.
One more suggestion: these types of inquiries go against labor laws. If any trade union or NGOs file a case against the firm, or if any related court takes suo motu action against the company, it may lead to legal consequences.
From India, Nellore
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Dear Senior,
I would like to inquire about the maximum number of days staff employees can work without any weekly off in a month. Additionally, I am interested in knowing how many compensatory offs (c/off) can be earned and availed in a month.
Kindly provide me with the relevant clause according to the Factory Act of 1948.
Regards,
Anil Chaturvedi
Reliance Cement Company Pvt. Ltd.
From India, Pune
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I would like to inquire about the maximum number of days staff employees can work without any weekly off in a month. Additionally, I am interested in knowing how many compensatory offs (c/off) can be earned and availed in a month.
Kindly provide me with the relevant clause according to the Factory Act of 1948.
Regards,
Anil Chaturvedi
Reliance Cement Company Pvt. Ltd.
From India, Pune
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It is quite strange and unfortunate that a Senior Executive of HR & IR (he himself being a victim?) asks about the legal consequences of forceful non-payment of salary beyond 2 months to the executives of his company! First and foremost, it is a clear breach of the contract of employment on the part of the management. If any one of the affected executives sues the company (though time-consuming and retaliation-prone, it is the only source of remedy to gold-collar employees), what would be the image of the company? If any creditor or banker comes to know of this, he will certainly move the High Court for the closure of the company in case it is registered under the Companies Act or stop overdraft facilities, declare NPA, and suspend your banking operations. If you can, impress upon your management that no executive can work with a trust deficit. Every sailor knows that it is always better to jump out of the sinking ship before it fully drowns. Instead of brooding over postponing payment of salary further and its legal impacts, better try to resolve the problem as expeditiously as possible.
From India, Salem
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From India, Salem
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