retrenchment
aj
(Querist) 15 June 2008
This query is : Resolved
URGENT:i have a small trading firm in delhi.i had only 1 employee working with me for the last 4-5 years.he has now sent me a notice saying that he was drawing a salary of 2,500 for the last 20 years of service.he has not come for work and has claimed that we have thrown him our with verbal abuses and manhandling.i was not maintaining any records attendance/leave register.no appointment letter was given to him.he now claims pf.gratuity ,bonus,2months notice wages etc.how much is he entitled to get.
what can the labour court charge for non maintaining any records?or how much will i have to spend to fight my case?
how much should i spend on settlement?
i am filing nil/negligible sales tax returns for the last 4 years
aj
(Querist) 15 June 2008
URGENT HELP NEEDED
Guest
(Expert) 16 June 2008
As a one man employer, EPF,ESI, Gratutity does not arise. They only start only if the firm employs more than 20 people, whihc is not your case.
Is your firm as old as 20years ars claimed the person. You have records in the form of accounts to show that he waorking for 4-5 years. Keep them with you. Are there any records with the enstrained employee, to prove his point. If no, then donot bother .
Reply to the notice stating the facts according to you. That should solve your problem.
H. S. Thukral
(Expert) 16 June 2008
There are many aspects in your case:
First is that yours is not an industry. In the definition of an Industry the emphasis is also on 'employment'. An organisation employing one person can not legally be described as an industry. So payment of retrenchment compensation is ruled out.
You are also not covered under bonus/esi/gratuity Act as you donot meet the minimum employment requirement.
Yes you can be covered under Shops and Establishment Act Every state has its own Act and provisions therein differ to a small extent in every Act.
In the case of dismissal of a workman/employee under shops and establishments acts, usually a notice of month is required which if not given, a complaint before a magistrate can be filed who can award such compensation.
You have to maintain record of leaves etc under the shops and establishments act which if not maintained, employer can be penalised.
In view of the above factors, you would not incur any major liability and hence if you are contemplating a settlement that should not be more than one month salary.
In case you are contesting his claim
the defence in your case probably would be.
1. He was not employed with you ( The burden of proving employment is on employee)alternatively
2. He abandoned his job voluntarily.
Personally I have experience that the private unions exploit the situation and by resorting to pressure tactics on the employer they try to extract some money from him. The settlement is only advised if you can not bear such pressure tactics.
