Read this blog to understand and become aware of all the remedies available for an employee in the event of non-payment of salary. It enlists all the legal remedies at the disposal of an employee.
Legal Notice to Director comes with some hard and greatly disconcerting realities. In a world where everyone’s trying to mint a little more money, through this hack and that ploy, some are armed with poor stratagems at the cost of others’ well-being. Entrepreneurs who earn passively but greatly by selling the price of labour put in by the employees they hire, often assimilate wealth and defer payments which rightfully belong to the ones working for it. Companies going through economic hardships and financial crises usually resort to depriving general employees of their full salary to keep higher-ranking officials fully paid and content in their respective lofty positions.
What are the Common Problems Faced at Workplaces?
Against the backdrop of cool, well-maintained and invigorating even, looking company policies and display of the supposedly great treatment of its employees, one sees murkier realities, which are more nuanced for insider relationships, such as the one between the employees and employer; however very subtle for outsiders. Some of the common disparities that may be observed on interpersonal levels are:
- Delayed payments– employees around the globe complain about delayed payments, and sometimes reduced ones as well. The lower one is on the official rung; the more tossed around is their job security. An employee who expects his salary to reach him at the start of the month retreats from making important investments because his divested conditions necessitate the value of savings.
- Laying off of employees– in most cases, the deprivation is more pronounced when the company, dispenses with the service of a worker. Mass layoffs are often done without prior notice, done in haste and with the most unjust distribution of inadequate money for the respective salaries. Most employees with not much to spend or save, invest themselves in looking for other jobs, rather than standing their ground which seems almost futile in the face of dynamic companies and their monetary crisis as they try to escape legal expenses.
- Gratuity/ full payment denial– when a worker is relieved of his duties and is a fitting retired employee who is eligible for gratuity, he has every right to claim his full payment and whatever extra benefits and bonuses are due him for his service to the business or company. His demands are reasonable and hence even backed by law and even if the business is going bankrupt and the finances insolvent, the retired employee needs to be paid in full. However, due to the lack of cognisance and information exchanged around these topics, most people do not or cannot stand their ground without legal support, etc., when dismissed post-retirement and are divested by the companies in multiple ways like this.
In most of these cases, employees get deceived, deterred and deprived because they think they will never have enough resources, support and legal backing that one would need to stand up to these elementary level discrimination and deprivation that stir up bigger disparities in society.
Laws and Acts which Safeguard the Interests of Employees:
Some of the most relevant sources of assistance to individuals or employees afflicted by unjust policies adopted by companies they’ve worked in, majorly in terms of delayed or denied or reduced salaries (with or without explanation, by the company, regardless of financial instability etc), the following acts are some respites for such employees, that acknowledge, challenge and charge the companies for unfulfilled dues and commitments made to their employees.
The Wages Act of 1936, Employees Provident Fund and Miscellaneous Provisions Act, 1952 (the “EPF Act”), Payment of Wages Act, 1936, along with the enforcement and ratification of the Insolvency and Bankruptcy Code, IBC on 28th May 2016 (Code), the Employees State Insurance Act, 1948 (the “ESI Act”) and the Payment of Gratuity Act, 1972, (the “PGA Act”) are of paramount importance and hold prime time significant benefits for those employees or workers who are well- aware and stay acquainted and familiar with the perks laid out by these acts, which are employee-centric and covet the same, with the respect and remuneration their integrity and service to the business or company.
Under What Conditions Can An Employee Issue A Notice Against The Employer For Non-Payment Of Salary?
Insolvency and Bankruptcy Code (IBC) of the 28th of May, 2016 (Code) allows employees whose services have been hastily dispensed with in mass lay-offs, or in other circumstances where there has been a considerable recession or rebate in their pay, to initiate the notice of insolvency against the company or the hiring employer of the company.
The Payment of Wages Act of 1936, a law related to the payment of wages, safeguards the lawful interests and rightful monetary demands of low or daily-wage workers.
Section 21 of the Contract Labour (Regulation and Abolition) Act of 1970 talks about the responsibility for payment of wages of workers hired on a contract basis who should be paid before a fixed expiration period after which the employer could face legal consequences.
Employees who file or issue a notice against the company or employers under the Insolvency and Bankruptcy Code (IBC), 2016, go through the legal notice to director processes as mentioned below:
- The salary dues of the employee must be one lakh rupees or more.
- A window period of 10 days is offered to the company or the Board of Directors or the hiring employer after the notice has been issued against the concerning party
- The employee can then imitate the insolvency resolution proceedings against the company or the Board of Directors or the hiring employer, in front of the National Company Law Tribunal, under Section 9 of the Insolvency and Bankruptcy Code
- If the National Company Law Tribunal validates and accepts the proceedings initiated by the employee, then the directors or the employer individual of the concerning company, found at fault, will be suspended from service by law.
- The company is given 180 days to establish a revised framework for insolvency resolution and turn around the non-performing policies to settle the existing conditions of the business.
Documents Required by an Employee to issue a Legal Notice to Director for Non-Payment of the Salary:
An employee needs to carry proofs and documentation as the formularisation of any claim or charges against the concerning company
- Name and identity information
- Address of the employee, notice issuer
- Employment status, term of employment in the concerned company
- The monetary discrepancies faced earlier
- Bank Account sheet as proof of denied/ withheld or reduced salary
Format for Sending Legal Notice to Director for Non-Payment of Salary
Subject- Legal Notice to the employer of the concerned company for the non-payment of salary and/ or company grants/ remittances/ bonuses/ gratuity.
DATE
NAME OF THE COMPANY
To the Managing Director,
NAME OF THE EMPLOYER/ WHOMSOEVER IT CONCERNS
Dear Sir,
On behalf of my client, NAME OF THE CLIENT, an employee of NAME OF COMPANY a resident of COMPLETE RESIDENTIAL ADDRESS, allow me to acquaint you and bring to your concern the following things that have led your employee and my client as mentioned, to issue the following notice.
ISSUE 1
ISSUE 2
ISSUE 3
I, thereby, hope for you to acknowledge the notice issued, and call upon you to unconditionally clear any and every payment that has been a long-standing due to my client and your employee, that exists in your knowledge, including the ones that have been mentioned above, with the correct rate of interest implemented and within 15 days (START DATE – END DATE)
However, suppose I’m intimated about your failure to respond in the expected befitting manner. In that case, I shall have to, under the clear instructions provided to me by my client and your employee, file a criminal as well as a civil lawsuit against you in a competent Court of Law. A Suit of Recovery shall be filed too, if you do not take or initiate suitable action, even after issuing this notice. If the situation does arrive at that, you shall, besides producing your defence case, be entirely answerable to the competent Court of Law, and be willing to bear for all penalties, persecution, legal notice to director charges and expenses, risks, losses incurred, and the consequences thereof and thereafter, as you shall be solely responsible for the same.
It is advisable for you to save yourself a copy of this notice, as you will be required to produce it in the court meeting, while producing the defence case, as the charges imposed on you shall be legally discussed in the presence of my client, legal notice to director of a Company advocates and judges of the Court of Law.
My office is a copy of the notice for the records.
Thank you.
Respectfully,
NAME OF THE ADVOCATE
ADDRESS OF OFFICE
Conclusion
To prevent exploitation as well as the disambiguation of the deprivation of a worker’s remuneration, the law promises to take many strong actions and commits to safeguarding the interests and status of employees in the vent of financial discrimination or any other disparity in the workplace. Employees, who are aware of the legal backing they are bestowed with as rights by the law of the land, can conveniently evade any hardships that could be hindering their progress in the field. Click on Legal notice by the advocate
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