Salary issues and proprietor's right

she can approach the labour court. You should have cut salary for the first month itself. otherwise you can take the defence that she requested for the first month so you gave her or that first month was just an informal training, so you gave her the amount. some such reason. But i guess you will be held liable to pay, but thats a long process at labour court.

Please examine the following:

1. As a proprietor do you have some special rights:::NO. Employer (prop. In your case) can personally be held responsible for violation of enactments/Acts/Instruments of Law/Statues applicable to the establishment/law of the land………..and penalized and punished..

NO employer/Proprietor is above law.

2. Does start up company fall outside the purview of labor Laws or for that matter  enactments/Acts/Instruments of Law/Statues applicable to the establishment/law of the land:::NO.

If yes please elaborate why and how a start up company would be beyond the ambit of law…….or for that matter labor laws won’t be applicable to employees working in a start up company…..

It is felt that your establishment shall be covered by (name of the state) Shops and Commercial Establishments Act…………………..and it also stipulates that earned wages have to be paid by fixed date/day…………and Payment of Wages Act and it also stipulates that earned wages have to be paid by fixed date/day…………….Min.Wages Act may also apply…..

Employee can lodge a complaint the moment the payment of earned wages is delayed by even a day and Employer/establishment can be penalized say Rs.7500/instance………..

3. Can any deduction be made from earned wages of the employee::: NO………..until or unless it is say statutory deduction permitted by law e.g: PF,ESIC, TDS etc…………………….

Payment of Wages Act and it also stipulates it………..

4. Can you employ a person on wages and deny payment of earned wages citing some targets not achieved :::NO………….

You may go thru various enactments applicable to the establishment e.g. Payment of Wages Act…

Min.Wages Act may also apply…..

5. Can salary be linked to achievement of targets:::: In all probabilities::::NO.

Incentives on achievement of targets can be proportionately paid…

6.Training::: Any training that is to be provided to employee to enable the employee to handle the counters of employer should be without any cost to employee…….

A person can be recruited as Trainee:

--If it is apprenticeship::::: as Apprentice::::as per Apprenticeship Act and Apprenticeship Rules that are in force and Stipend has to be paid.

--If it is actually a training :::as per management’s standing orders and compensation has to be paid…….

6. Tele Sales Executive should be covered by the def. of ‘Workman’ as in ID Act and ‘Employee’ as in (name of the state) Shops and Commercial Establishments Act……..and can approach Inspectors appointed under these enactments mentioned above and in addition she may decide to approach Employee’s /Trade Unions too and may contemplate to lodge complaint u/s406,420………………..

Unpaid wages are debt on employer and employee can proceed as recover the debt ………………as creditors to the establishment….

7. Notice Period : No private policies/rules/agreements crafted/drafted by employer (Proprietor in your case) can supersede and overrule an enactment and any T&C contrary to the provisions of law shall be illegal,void….

Notice period is part of service conditions and is governed by various enactments applicable to the establishment e.g. (name of the state) Shops and Commercial Establishments Act, standing orders (Model/Certified) and notice period applicable for 4 month’s of service should be::::::: NIL ,,,,, and applicable during probation period should be::::: NIL

Hence notice period of ………………days inserted by you in offer letter should be illegal,void.

8. Since you have not paid wages on fixed day:::::you are unworthy of being employed with and notice period in such case shall loose its sanctity……..NO Inspector under any Labor law may agree with your version to square off her dues by adjusting notice pay……………..and you may rather get penalized….

Since you have not paid wages by the dues date:: her contention that you have  defrauded her may prove to be right.

Salary slip duly signed by employer and employee has to be supplied to the employee atleast a day before the disbursement of wages::::You may go thru: Payment of Wages act; Sec13A; Min. Wages Central Rules26(3,4)………………………..then you may be under obligation to maintain various forms/registers pertaining to payment of wages under  (name of the state) Shops and Commercial  and you may note that falsification of record is offence……

She might be eligible for PF,ESIC and you might have defaulted on these…………

Therefore it is in your interest to exercise restrain, strike rapprochement……………….. supply her the acceptance of resignation, service certificate, relieving letter, PF number with a/c slips,ESIC card, salary slips of all months, correct FnF statement, Form 16 as per correct FnF statement, NOC/NDC and  buy peace……..

Have you framed your so called rules by consulting an able labor Law Consultant/Service matters Lawyer/law firm or you have framed these by hearsay!

Mrs. Jayashree thanks for your brief and to-the-point reply. I just wanted to know what are the ways she has. If she takes it to court I will definitely face that. I will stand my ground.

Mr. Kumar Doab, thanks for your elaborate reply. But it does not answer my basic question.

First of all, I am not asking for any special treatment as an employer. I am trying to know what the law of the country says.

Second, not asking for any special favor as a start-up. If I can start-up my own business I can take the fall for it.

Third, I might be wrong but I believe "term of employment" is a factor in case of deducting wages. She was not a permanent employee. She was on her probation. The offer letter I served clearly stated the term that her total salary might be deducted in case of not achieving the business target. That was the "term of employment" in her case. She signed the copy stating she read and understood the whole document before signing it. Does that not give me the right to deduct her salary in case she is not fulfilling her duties? If not, can you kindly explain to me under which term or act even big public limited companies are doing the same with their sales team?

fourth, same as the Third.

Fifth, again the "term of employment" in the above case. I need to know if I am wrong. Please feel free to show counter logic.

Sixth, training point, not relevant to the case. About the debt collection thing, I have no idea how that will fit in the whole thing. 

Seventh, she did not serve any notice period. She neither gave me any resignation letter verbal or written.

Eighth, I was really not aware of this law that I need to pay the wage on a fixed date.

As to answer your question, yes. I did frame my offer letter with the help of a friend who is working in the legal sector but he is not exactly a labor law specialist. I can see now there might be some gaps in the paper I served. I would make sure to make it iron clad from the next time.

As per paying the wage, I am not sure what your labor court will say. But if the business is losing payment due to the employee's lack of efficiency, I do not see the virtue in paying the employee despite her lack of efficacy. This will completely break the spine of the small business sector. If that is the law, it should be modified. 

It is upto you to accept or not but your questions have been answered.

The section on Dedctions in enactment is self explanatory...and is same for big or small companies.

You may write appointment letter of 200 pages and assume it is iron clad....it won't.

Since you did not pay wages it may be claimed deemed terimation and without payment of wages.

You have to issue notice for termination citing under performance and prove it.

Expert Mr. Kumar Doab has very clearly explained the law involved in it and also the liabilities of the employer. It was also made clear that an employer cannot make his own rules violating the law of the land in this regard.  Any employer has to frame rules in accordance with existing law  for the purpose.  If the querist knows everything better he need not have posted this query here.  He does not deserves the reply or opinion by experts, so any amount of advises by others also will fall into his deaf ears only because he appears to be predetermined and expects a favorable reply to justify his deeds, I refrain from rendering  any further opinion from my side.

Dear Mr. T. Kalaiselvan, Advocate, thank you for your valuable time but I really do not think I asked anybody specially to reply to my queries. If you think it is not worth your time, why on earth did you provide enough time to write your reply?

First of all, not all employers are male. Second, thanks to your Mr. Expert's scaring opinion I had to consult a real life corporate lawyer. He told me explicitly how much I am within my own rights and where are the downfalls. After that, I encouraged my ex-employee to go through with proceedings if she wants to.

Third, next time you see a post from me that you think is not worth your time, feel free to ignore it. Feeling irritated after a day's hard work is not worth my time as well.

FYI, I work in the telecom sector. Even the regional sales head gets his salary deducted if he cannot complete his target. If you are unaware of such situations I am really not sure in which world you experts belong to. I am new to this forum so I don't know how it works but I will try to close this thread. Because really, I do not need personal attacks from bunch of people who don't even know me. 

Last Reply

I have infact posted right postures in detail and suggested rapprochement.

If this is not acceptable or suitable to your own interest you can very well proceed as deemed fit to you at your end.

I have nothing to gain and nothing to loose from what happens in the mater posted by you.

For this reason I am posting again and this is the last reply.

If an employee in your establishment is not doing the job properly you can issue show cause notice, provide opportunity of natural justice and effect termination…..but you will have to pay wages till last day in office ON LAST DAY IN OFFICE……..EVEN FnF WAGES ARE TO BE PAID ON LASR DAY IN OFFICE………WITHIN 3 DAYS…..MAX. BY USUAL/FIXED PAY DAY.

I find some bitterness while you address me as ‘Your Mr.Expert’s’……..

There are endless threads at LCI in which many of the members/querists/authors/employees that include even GM/VP from telecom sector …………..that have posted that they approached Trade Unions/Police/Courts/lawyers/media and succeeded……………………and many of them have commented that they have succeeded by just drawing the attention of establishments/employers to threads initiated by them at LCI………

There are threads initiated by employers like you too……………and there are threads initiated by HR personnel and even lawyers too that want Expert opinion on Labor Law/Service matters ………….

One determined, properly informed, well supported employee is sufficient for employers……….   

Everyone has a right to consult for legal opinion and avail the services of a lawyer and it certainly includes you and the employee too.

You have probably consulted your ‘Mr. Corporate Lawyer’ from a company that might be your principles……..and it was also not a paid consultation. A lawyer is contracted to mind the interest of the client and your lawyer shall also do it…….

A corporate lawyer/lawyer on rolls of a corporate shall evidently mind  the interest of his employer…………..and shall defend his employer……..

The question arises why despite keeping a battery of lawyers/legal cells employers loose ???

There is plethora of judgments, publications on it!

Because court and state is ‘Parens Patriae’………………..(parent to the nation) and they shall lift the veil……………………….and penalty, punishment with jail time is awarded as per law of the land…….

The Acts cited do provide for penalty, punishment…….

You have posted that:

---- “The offer letter I served clearly stated the term that her total salary might be deducted in case of not achieving the business target. That was the "term of employment" in her case. “

Which court according to you or your ‘Mr. Corporate lawyer’ will accept it.

NO Inspector under any Act can accept it.

Even the penalties that you or any employer can impose are governed by the enactments applicable to the establishment/employer……

-----“Second, thanks to your Mr. Expert's scaring opinion I had to consult a real life corporate lawyer. He told me explicitly how much I am within my own rights and where are the downfalls.”

I have infact posted right postures and suggested rapprochement.

If you have found my post scaring then you may find judgments by the court of law frightening…..

“An Assistant Vice President of the company succeeded against the employer.”

You may go thru:


Delhi High Court
Argha Sen vs Interra Information ... on 12 September, 2005

https://www.indiankanoon.org/doc/1941604/?type=print

IN another matter the GM of a company was accepted as a ‘Workman’……….therefore courts may accept a Regional Manager as ‘employee’ as in Shops and Commercial Establishments Act, ‘Workman’ as in ID Act………There is no bar on any Employee’s/Trade Unions to not to represent a regional manager…….

There is no bar on a Regional Manager to approach unions, police, civil courts, criminal court………

You and Your Mr.Corporate Lawyer are neither lawmaker, nor magistrate that you will make your own laws and announce your own decisions.........your interest seems to be only one that to deny the payment of wages and now penalties that might come to you due to transgressions by you.

Your Mr.Corporate Lawyer might only be fantasizing some strategy from his own viewpoint and usually lawyers relent in the last.....................however by that time the employee and his/her counsels and supporters may become adamant and may not relent.......

It is your matter hence your interest and hence you should count it also.   

----“After that, I encouraged my ex-employee to go through with proceedings if she wants to.”

You have infact done very well.

This employee shall be a properly informed employee after consulting Employee’s Unions/Trade Unions leaders, Lawyers, Police etc………

You can even ask her to post in this thread too…….

-----“ FYI, I work in the telecom sector. Even the regional sales head gets his salary deducted if he cannot complete his target. If you are unaware of such situations I am really not sure in which world you experts belong to. “

We are fully aware of such situations too…………….

Mr. Kalaiselvan has been upright is his post and you could have rather focused on the essence of the message.

Things are OK till the time employees are silently accepting……….and do not scream………about the illegalities, transgressions……

It has already been pointed out that there are unlimited number of threads……on real life situations and solutions…..

I do not know you, but sensed from your posts that there is glaring need on this earth for you to consult……………

I have rendered my unbiased and upright opinion.

Rest is upto you.