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Sharma Kartikeya   15 June 2016

Full n final settlement

Dear All,

I have a query on FnF settlement which happens when employee leaves the company.

My wife joined company A in May 2015. As per the terms and condition of the contract every month 4000 was getting deducted as a retention money. As indicated in the appoitment letter it was mentioned that if employee resigns within 6 months, he/she will not be eligible for this amount accumulation. And if resigns after 6 months, eligibility for 50% of accumulation and 100% after completion of one year.

Now this company had transited to some Pvt. Ltd. company B in Sept, 2015 with changed salary structure. Now they had PF, Esic etc. But the retetion money is rephrased as yearly service bonus of 24000 as per new appointment letter. Payment terms of this money is mentioned "as per the company service bonus policy".

Now, when this transition occured, naturally previous terms and condition voids. We asked to settle the accumulated retention money of 16000, for which they replied that it will be settled either completion of one year or after your resignation.

My wife resigned in Feb, 2016 and served the full notice period. Here is the twist, in FnF settlement the employer only 50% (rs 8000) of the retention money by saying that she resigned before a year as per the old company A appointment letter. and for service bounus of new company B he mentioned that it is a yearly component and cannot provide on prorata basis. So, ultimately we are in a loss of (8000 of coampany A) and (16000 of company B).

She signed on the FnF settlement. Please guide us what are the other options we can look for. Or what employer has done is right. Let us know in case you need any other information.

Thanks in advance.

Kartikeya

 



Learning

 3 Replies

Kumar Doab (FIN)     15 June 2016

While posting such queries employee should post full basic information :

 

e.g;


Have you been issued with appointment letter? Do you have copy of all rules and policies mentioned in appointment letter?...............e.g.'company service bonus policy'!


You may post the exact extract from appointment letter on termination/resignation,Notice pay in lieu of notice period,payment of wages, takeover/closure/merger etc 


What is your designation and nature of duties in appointment letter and on record/ in practice?

Is any date of payment of wages mentioned in appointment letter?

How was salary paid; cah/cheque/in bank a/c?

Did you sign any voucher? Do you have copy? Did you put date of payment on it?


You were in which state ?


What is this establishment; Commercial/Industrial ?

Does it have Certified/Model standing orders and does it apply to your designation?

Are you a member of employees/trade unions?


What was your last drawn salary in Rupees?

You were under probation/confirmed?


Did company open a salary a/c for you, by signing introduction or it is transferring salary in your personal a/c?

Has it been supplying salary slips ( at least a day before date of payment of wages)? Has it mentioned deductions in it?


Did you get I.Card, Visiting card,salary slips of all months, PF a/c number and a/c slips, ESIC card,Form16,  etc?


You have worked for how many months?

How many persons are employed in it currrently and what was max. no. at ant time?

 

The retention money is collected in lieu of what extar ordinary favor by the compnay?

Did you sign any committement to serve for say atleast 1 year?

What do you mean by transition? Takeover/outright purchase/merger etc?

 

Was any circular supplied on T&C of so called transition?

Were you asked to resign? Did you resign? Was resignation accepted in writing?

OR continuity of service after transition provided?

 

You have posted that:

"We asked to settle the accumulated retention money of 16000, for which they replied that it will be settled either completion of one year or after your resignation."

Did you ask ( Old and new both) in writing and did company ( Old and new both) reply in writing?

 

 

Sharma Kartikeya   15 June 2016

Dear Sir,

Many thanks for reply. Informations are as under (replied in bold text).

Have you been issued with appointment letter? Yes, during tenure she received two appointment letter, one at the time of joining and other when company changed to Pvt. Ltd. company. Do you have copy of all rules and policies mentioned in appointment letter?...............e.g.'company service bonus policy'! No, not shared to the employee


You may post the exact extract from appointment letter on termination/resignation,Notice pay in lieu of notice period,payment of wages, takeover/closure/merger etc  shall attach soon.


What is your designation and nature of duties in appointment letter and on record/ in practice? Software Developer or record as well as in practice.

Is any date of payment of wages mentioned in appointment letter? No.

How was salary paid; cah/cheque/in bank a/c? In Bank a/c.

Did you sign any voucher? Do you have copy? Did you put date of payment on it? It was a calculation of FnF settlement on which was signed. No date of paymnet was put.


You were in which state ? Vadodara, Gujarat


What is this establishment; Commercial/Industrial ? It is an IT company now a Pvt. Ltd. Company

Does it have Certified/Model standing orders and does it apply to your designation? No idea

Are you a member of employees/trade unions? No


What was your last drawn salary in Rupees? approx 11000 net in hand

You were under probation/confirmed? under probation


Did company open a salary a/c for you, by signing introduction or it is transferring salary in your personal a/c? Initially by cheque, then Company opened salary account

Has it been supplying salary slips ( at least a day before date of payment of wages)? Has it mentioned deductions in it? They were very irregular in providing salary slips, never gave before the payment. they mentioned the deductions such as PF, Esic, Prof Tax but not the retention money or service bonus


Did you get I.Card, Visiting card,salary slips of all months, PF a/c number and a/c slips, ESIC card,Form16,  etc? No I card and Esic card, rest all provided.


You have worked for how many months? more than a year including notice pay of 50 working day

How many persons are employed in it currrently and what was max. no. at ant time? Could be around 20.

 

The retention money is collected in lieu of what extar ordinary favor by the compnay? No idea

Did you sign any committement to serve for say atleast 1 year? No

What do you mean by transition? Takeover/outright purchase/merger etc? transition means changed to pvt ltd company

Was any circular supplied on T&C of so called transition? No

Were you asked to resign? Did you resign? Was resignation accepted in writing?  All were provided with new Appointment letter after a fomal resignation.

OR continuity of service after transition provided?

 

You have posted that:

"We asked to settle the accumulated retention money of 16000, for which they replied that it will be settled either completion of one year or after your resignation."

Did you ask ( Old and new both) in writing and did company ( Old and new both) reply in writing? for old we asked and they replied in verbal. and for new after so much follow up they called us for settlement at office, as such nothing in writing.

 

Kumar Doab (FIN)     15 June 2016

You have posted that:

 

 

---"Are you a member of employees/trade unions? No"

It is your loss. That is also why you are not properly informed and have been exploited.

IT/ITeS employees unions have done a good job and have affilliated with trade Unions.

 

---"Has it been supplying salary slips ( at least a day before date of payment of wages)? Has it mentioned deductions in it? They were very irregular in providing salary slips, never gave before the payment. they mentioned the deductions such as PF, Esic, Prof Tax but not the retention money or service bonus"
 

 

Each deduction has to be mentioned in Salary Slip. Refer to the provisions of Payment of Wages Act. This Act does not discriminate between 'Workman' and ' Non Workman'.

If ESIC was deducted then ESIC card was to be supplied.

Are you aware that even after retirement you and spouse shall be coverd for a small payment of Rs.120/year, and in case of termination/unemployment you get salary from ESIC?

Demand the card from employer, in writing and under proper acknowledgment.

 

---"The retention money is collected in lieu of what extar ordinary favor by the compnay? No idea"

"As per the terms and condition of the contract every month 4000 was getting deducted as a retention money. As indicated in the appoitment letter it was mentioned that if employee resigns within 6 months, he/she will not be eligible for this amount accumulation. And if resigns after 6 months, eligibility for 50% of accumulation and 100% after completion of one year.'

 

Both are contradictory.

In any case the deduction seems to be illegal.

 

---"What do you mean by transition? Takeover/outright purchase/merger etc?transition means changed to pvt ltd company

Was any circular supplied on T&C of so called transition? No

Were you asked to resign? Did you resign? Was resignation accepted in writing?  All were provided with new Appointment letter after a fomal resignation.'

 

Why should anyone be asked to resign in such case?

The reason does not seem to be fitting to disallow so called' retention Money'.

 

---"

"We asked to settle the accumulated retention money of 16000, for which they replied that it will be settled either completion of one year or after your resignation."

Did you ask ( Old and new both) in writing and did company ( Old and new both) reply in writing? for old we asked and they replied in verbal. and for new after so much follow up they called us for settlement at office, as such nothing in writing.'

 

Submit minutes of discussion preferably structured by a very able counsel specialzing in labor-service matters.

 

You can seek support from employee's/trade unions,

Inspector appointed under; Gujarat Shops & Estbs Act, Payment opf Wages Act, O/o Labor commissioner.....


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