Leave Without Pay

The company cannot terminate under the stage "leave without pay" because now you are a regular employee. But as you say the company is facing downturn the company may take any measures to terminate any employee(including regular employee) regardless of their status (because the company is not doing well in business).  But if such termination occurs, in my opinion it would certainly have a compensation package.  You cannot legally demand to take you on regular rolls or give you normal pay (Because the company is not doing well).  I cannot provide you a clear opinion without going through your appointment order cum service agreement and its conditions.

Mr.Krishna,Thank You very much for your Reply.

My Contract with the Company says :

Clause 1. Your Regular employment with the company will commence after completion of Training and obtaining necessary certification.

Clause 2. During the period of your regular employment you shall be exclusively employed by the company and you shall not accept any employment similar in nature with any other employer.

Clause 3. Either party can terminate the contract with 3 months notice period.

Clause 4. The company reserves the right to terminate you without notice if you act with willful
negligence/indicipline/behaving in a way contrary to established principles of the company and industry and/or as decided by the company.

Clause 5. You will be covered for Personal Accident Insurance for Rs.xx Lakhs.

Clause 6. In case of any Dispute/ Difference / interpretetation arising out of this shall be referred to MD of the company who shall appoint an Arbitrator within 5 Days or receipt of request. Such Arbitrator shall pass a reasoned award within 7 days of appointment . Award of arbitrator shall be final and binding on the parties.

There are many more points but they talk about Training courses and durations, Leaves, Postings, Privilege,
Mediclaim etc.

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My Take is :

Clause 1. During the training I, and all others have successfully completed all the certifications required.

Clause 2. As per the second clause, I can not take up work similar in nature. But they are paying me stipend since last 1 year instead of my salary, and it is not possible for me and my family to survive any more on the stipend. So can I take up similar nature of work for the time being and still be Legal in any way ?

Clause 3. Its a flat and simple statement in the contract as i have written it here.
   So they can terminate my contract with 3 months notice period, fine. But will they pay the balance amount of my last year's salary that I wasn't paid ? And also the salary for 3 months from the day they terminate me.

Clause 4. I have never done anything of that fashion. But they might use that to push me out.

Clause 5. They did not renew it for since last year. And hence a breach in the contract.


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This is my situation. I do not if I will have to go to court. If I do have to, I might be able to do that only
if it doesn't cost a fortune to fight the Company.

I understand what you say Mr.Krishna. I can not ask them to put me on normal Salary. But Can I deny signing Leave without Pay and demand to be kept on the Stipend till they can pay me complete salary ?

P.S : Inspite of bad financial shape, No one in the company apart from us is taking a pay cut.

And they have taken a few people back into the company (From the batch of 50 like me) on grounds that they are Kids of Management Level Employees and hence they will be given preference. All of them were junior to me. i.e had joined the company after me.

Thank you.

As foreshadowed in your first post that the stipend period will be for only 6 months etc etc and by now if the 6 months period has expired you can make a representation to the company's superior officials that you may be considered for regular posting.  I do not know whether the reinstated employees (who are junior to you) are all of your cadre or similar level of posting.  Moreover as stated by you the company showing a reason "kids of management level" is somewhat not correct on the part of the company.  As a senior employee you should be given first preference for regular appointment. I agree with your opinion.

I do not advise you to go to court instantly or immediately.  I suggest you to first make submissive and kind representation to the superior's of the company in a very polite manner seeking regular posting stating your problems (which may include financial constraints, seniority in job, etc etc). You can state all the facts like the company provided jobs to juniors etc etc also, so that all facts necessary are stated and brought to the knowledge of the company officials. 

If the company does not honour the representation then you may either look for some other good job or if you feel to file a case then you may file a case.  It all depends on your decision.

Best of luck

. 

Dear Ankita,

I would recomend that you start creating documentary evidence in your favour.

You should write a letter to the Company stating that:

1. You were appointed on --- & --- terms vide appontment letter dated ----.

2. You had joined the services on _____ and you had undergone training for a period of ___ months, wherein you were paid Rs. xx as stipend.

3. You had successfully completed the training on ____and you had started to receive Rs. xx as your salary from __.

4. Upon Company's recommendation, you had opted for stipend of Rs. ____, from -----, which was paid to you on submission of the pre printed / drafted letter by the Company.

5. You are on forced stipend for last ---- months / years.

6. Most of your collegaes have been called back for work and have been assigned duties.

7. You are always willing to resume full fledged service with the Company.

This letter would atleast prevent the Company from terminating your contract without the due process of law.

If terminated, you have got a option of seeking compensation from the Company, for breach of contract / and or claiming specific relief of complying with the Contract. 

Ashish 

Thank You very much Mr.Krishna, Mr.Soni and Mr.Ashish for your valuable time and advice.

I have made the following decision for the time being.

1. Deny to sign the Leave without Pay. If the company does not agree, then ask for termination with appropriate Compensation package (Which I am not sure how to calculate apart from my Salary loss since last One year on Stipend).

2. If they agree to continue my Stipend, ask a written statement limiting the time they would keep me on hold. Also ask for a NOC for working part time at some other Employer till reinstated office.

3. I will try to talk personally, if it doesnot work, then take the legal route as adviced by Mr.Krishna. Also as adviced by Mr.Ashish, I am preparing the letter on similar format. And as adviced by Mr.Soni, Since I have not been going to office since one year, I do not know if there is any frivilous charge they can blame on me, but I'll still beware. Also will save all the Reciept and Letter received acknowledgements.

Please do let me know if you find the steps appropriate. Also kindly guide me how is the "Compensation Package" calculated.

Thank You for all the help.

Ankita.

I go through your case, which I earlier had not noticed after receiving a PM from you.

You have a contract period of five years and the period which you spend on stipend or leave without pay whether voluntarily or by persuations from the management shall be counted in this period and after five years the management shal be under no obligation to keep you in employment. My suggestion therefore is do not oblige the management. If the management issues you any communique to not to come to office, you shall still be entitiled to your wages. If they terminate your services, you can claim salary for remaining period of your contract.

Yet I would like to go through the terms of contract minutely  regarding termination of the contract premature.     

Thank You very much Mr.Thakural.

I have another doubt, in my Appointment letter, it also states that "In case of any dispute, the company will appoint an arbitrator, who shall take a decision in 7 days. And Award of the arbitrator shall be final and binding on both parties".

What does this mean, I understand the arbitrator will be a lawyer, but if the company appoints him/her, then isn't it obvious he'she is going to rule in the company's favour ?

Also would I have to pay any fees or charges concerning with the Arbitrator ?

Kindly Advice.

Thanks.

Ankita.

Parties can enter into an arbitration agreement to resolve their disputes through an Arbitrator instead of going to courts. An arbitrator has to go by the contract and he can not go beyond the terms of contract. Any Award beyond terms of contract is void. An Award can be challenged in the court.  As regards fee donot pay any thing from your side to the Arbitrator if you find that the charges are unreasonable. Reproduce the arbitration clause if possible in these columns so that it can be looked into by me and other ld. friends.  

The Clause as follows :

"In case of any dispute / difference / interpretation arising out of this shall be referred to the M.D of the company who shall appoint an arbitrator. Such arbitrator shall pass a reasoned award within 7 days of his/her appointment. Award of Arbitrator shall be final and Binding on the parties ".

1. Since they have not paid me for the past 1 year, I have exhausted all my savings and hence will not be able to pay huge fees to the Arbitrator and later, the Lawyer.

2. Since they have already voilated by not renewing my Accident Insurance and also there are no changes made in my Appointment letter pay structure after they made me sign on a paper , Which they formulated in a way that It was written by me as an acceptance to go on Stipend.

3. Also, should I sign the Leave Without Pay if the company agrees to make appropriate ammendments to my Appointment letter ?

Thank You very much.

Ankita.

hey i belive we are on same page ...bcos everything you told is 100 % match of my situation in my company which i geuss is same .....every one is talking about leagal actions but no one has answered our basic question which is

1) is there any such law which says that if company puts us on leave without pay for a period of more then 90 days and then terminates our job ...will put us in a situation were we can not take any legal action against company.

2) if there is any such law what is the section or clause under which it fall in books of indian court. or any web link if possible

it will be really great if any one can help us out on that as soon as possible as we dont have much time left to sign that aggrement

and is your companys name _ _ _ _ _ _ _ _ _ _   _ _ _line

As far as an employment contract is concerned it can be enforced by either party. Any breach of contract gives rise to cause of action and damages for the same can be claimed from the opposite party. In case of Ankita there is a contract of five years and if it is broght to an end in the absence of a specific clause to that respect, the employer shall be liable to damages which may be an amount equal to earnings of balance years of servie. There is no law where an employer can send his employee on leave and I am sure no such stipulation is entered into a contract of service.  For the benift of a person without legal background I would say that when an employer tells an employee to sit him at home, he is ordering him to do a job of sitting at home and the employee should obey it and get paid. Terminating an employee after sending him on long leave at the instance of an employee shall only help the employer in justifying the termination.  An employee who abstains from work for a long period is of nnno use to an employer. 

thank you very much for your advice Mr thukral (sorry for the no thank message ...i am using this site for the first time. it was a mistake).

so that means its better we not sign this leave without pay aggrement .

as my company has already done this thing to other employes last year. first they were asked to sign leave without pay aggrement then they were terminated after couple of months. but last time number was less and the employes were at much lower level of operation in the company.

and one last thing ..say for some reason they make us sign that letter can i write "sign under protest" below my signature or any such thing that can help me later on if they terminate me.

If you have similar appointment letter as that of Ankita then I think you should not sign at all. I am taking a practical approach. A company/ employer  who is taking this way out to economically run the company and considering his stff as NPA,  even coming on a recovery path would not reengage the staff. So why keep your self in such quandary when you can not think of taking any other assignment.  

If the employer has an option in the contract that the contract can be brought to an end during subsistence of the contract period, then perhaps it will be difficult to succed in a claim for damages. In such a case an approach to go on CONDITIONAL LEAVE and make efforts for alternatives would be advisable. This would purely be a mutual agreement. There are terms like suspension/layoff in employment but employer sending his employees on leave without pay is unheard of.  I am interested to know the language used in such an agreement and then perhaps I will further qualify my advice.