Ankit Bidani (ABC) 22 June 2012

Notice period pay calculation

I need your valuable guidance on the below mentioned matter in regards to notice pay calculation:

I was working with a staffing company in Delhi having their head office in Kolkata. At the time of separation due to certain reasons I served only 6 days notice instead of 30 days. In my AL it was mentioned that in case of seperation either party could terminate the services by giving 30 days notice or one month's pay in lieu of notice.

Now the company is asking for 24 days notice pay and I'm also willing to clear the dues. But we have a contradict over the calculation of notice period pay.

The company has calculated 24 days notice pay on my Gross Salary stating that it is as per company's policy.

My verdict is that the company should calculate the notice pay on Basic+DA since there was no clear definition of salary mentioned in Standing Orders provided by the company and also while calculating leave encashment they are considering Basic+DA as per Shops & Establishment Act. Under Factories Act, Shops & Establishments Act or Plantations Labour Act the pay for encashment of earned leave means Basic+DA; therefore, in the context of notice period pay also pay shall have the meaning of Basic+DA.

But when I discussed my verdict with them they told me that since I was deputed at the capacity of Assistant Manager the above mentioned Acts do not apply on me. These Acts are meant for contract labour or factory workers.

I would like to know is this true that there is no governing body for employees working at higher levels or not working in factories and all these Acts are not meant for them? Do I come under Labour Act or not?

Please suggest am I right on my part and stick to my verdict or I should clear the dues calculated on Gross Salary?

Thanks,

Ankit

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2 Replies

Kumar Doab (FIN) 22 June 2012

You have already answered your query "since there was no clear definition of salary mentioned in Standing Orders provided by the company and also while calculating leave encashment they are considering Basic+DA as per Shops & Establishment Act."

Designation alone does not decide you are workman or not.If the need be your lawyer or you or fiannly the O/o Labor commissioner shall confirm you are covered as workmaqn or not.

In all probabilities you are employee as explained in enactment Shops & Establishment Act applicable to your state.

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Anjuru Chandra Sekhar (Advocate ) 22 June 2012

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What they said is right. Better clear dues as per their requirement because it does not make much difference and get out of it peacefully because you need to get other documents like experience letter/NOC/relieving letter, settlement of terminal benefits/their transfer to the account of new company you may join etc. Keeping all these issues in view, it is better you keep amicable relationship with existing company and pay off that small amount though you feel it is extra.

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