In this article, Sachin Vats of RGNUL discusses steps to take when an employer fires an employee without giving due salary.

The Indian Constitution provides power to both the Central and State Government to make legislation regarding labour relations and employment matters as labour is a subject under the ‘Concurrent List’ of the Constitution. So, the primary source of the employment depends upon both the Central and respective State legislations.

Some of the major legislations regarding the labour and employment laws in India are,

• Industries Development Act, 1947
• Contract Labour (Regulation and Abolition) Act, 1970.
• Employees’ Compensation Act, 1923.
• Factories Act, 1948.
• Shops and Establishments Act for different states.

The concept of employment is determined by the following essential ingredients

• Employer – One who works or engages the services of others.
• Employee – One who works for the others after getting hired.
• Contract of Employment – The contract of service between employer and employee where the employee agrees to serve the employer subject to his control and supervision.

There are three main categories of employees according to the Indian Labour and Employment laws.

• Government Employees.
• Employees in Government controlled Corporate Bodies known as PSUs
• Private Sector Employees.

There is no any standard labour legislation in India for the protection of the workers who are employed in any establishment. The different legislations are made for different categories of employees depending upon the nature and the type of work performed by the employee.

Rights of an Employee

Many laws in India are made which has several provisions to safeguard the interests of employees. There is no any specific law which governs private employment in but an employee has many rights given under various laws.  

• Written Employment Agreement – The Written Employment Agreement is a legal document containing terms and conditions of the employment. It must be provided to an employee by the employer which lists all the rights and obligations of both. So, the written document provides security and protection to both the parties and should be provided at the starting of the job.

An Employee can take various types of leaves during the course of employment depending upon the situation such as casual leave for urgent and unseen matters, sick leave for medical related problems, privilege or earned leaves for plans in advance. So, these leaves are the right of an employee during the employment and they cannot be fired for such leaves.

The Employees get protection from sexual harassment at the workplace. It is a punishable offence under the Indian Penal Code and an aggrieved can seek remedy under Sexual harassment at workplace (prevention, prohibition, Redressal) Act, 2013. The Maternity Benefit Act, 1961 gives provision for the maternity leave for pregnant women during the course of employment. They cannot be fired on the basis of absence due to pregnancy. The female workers get the paid maternity leave for 26 weeks now in the private sector.  

Gratuity is a statutory benefit paid to the employees who have rendered continuous service for at least five years. A statutory right of employees cannot be denied by the employer on the ground that they are being provided with provident funds and pension benefits. Employment Provident Fund is a retirement benefit scheme available to all the salaried employees. It is managed by Employee Provident Fund Organisation of India and any company with over 20 employees is required by law to register with EPFO. Both the employer and the employee have to contribute 12% of their basic salary to the provident fund as per the law. If any employer is deducting the whole provident fund from an employee’s salary then it is against the act and he can apply against the same in Provident Fund Appellate Tribunal.  

What to do if an employee is fired without being paid the due salary

Many cases has been reported in India regarding firing of an Employee without giving due salary to them by the Employer. The allegations have also been made against the big and reputed companies regarding these issues. Many a time the employers do not like to pay for a notice period also.

Actually, it is “illegal” to not pay the due salary of an employee after being fired by the employer. The employer has to pay the due salary along with the payment of the notice period.

• An employee can file a suit against the employer because of the violation of the rights in accordance with the various prevailing laws. Normally, an employee should follow the given process if his or her rights regarding payment of due salary has been violated. :-
• First of all, the employee should send a legal notice to the employer regarding payment of the due salary which was not paid to him after being fired. The employer has to answer the notice being sent to him with valid, reasonable and competent legal reasons. The action taken by the employer against the legal notice decides the further course of action to be taken by the employee.
• If the due salary is not paid even after giving the legal notice. An employee after waiting for a reply for reasonable days, can file a police complaint regarding the cheating or breach of trust against the employer. The police will decide the further course of action depending upon the result of the investigation done by the police.
• If his complaint is not heard by the police or the competent authority the he can approach the District Magistrate with the copy of police complaint. The matter can also be taken before the Registrar of the companies to make him aware about the malpractices and cheating done against him by the employer of the company.
• Generally, the dispute gets resolved at this stage because the employer does not like to fight a long case for such amount of money. But, if it does not get resolved then an employee has further methods to get his due salary.  
• The employee can file a suit in Labour Court before the Magistrate against the employer for recovery of all pending dues. The employee is entitled to get the payment of even the notice period.

Notice Period

The employers are required to give notice of termination of their employment in accordance with the employment contract. Generally, various states have their specific legislations which provide for a minimum notice period of one month.

• The time period between the receipt of the letter of dismissal and the end of the last working days is known as Notice Period. The notice of the dismissal must be given to an employee by his or her employer before his employment ends. It also refers to the period between resignation date and last working day in the company when an employee resigns. The Notice Period as per the terms and conditions of the employment contract is applicable.
• In India, the notice period is generally 30 days for staffs who are still serving on probation and a period of 90 days for the confirmed employees.

When the Termination is Unlawful

An employer terminated by the employer have certain rights. In private industry there is employment ‘At Will’ in most of the cases where an employer can terminate an employee at any time and for any reason but the reason should not be illegal and contrary to any agreement.

• Termination may be unlawful if it done on the basis of following grounds :-
  • If there is an Implied Agreement and the Court considers that the employer has promised about continued agreement then the termination will not be taken as lawful.
  • There must not be violation of public policy by the employer in firing the employee as it is considered as unlawful. The termination done on the basis of discrimination between employees and job application based on race, religion, sex, ethnicity, background, etc. are considered as unlawful.
  • An employer cannot fire an employer only on the ground that certain unlawful activities have been reported against him or her. The termination cannot be done only on the basis of retaliation for a specific act.

What are the benefits available if the termination is lawful or one has willfully resigned

• The employee gets some benefits after termination if the termination is lawful or the employee has himself or herself willfully resigned. These benefits include:
• • The “Final Paycheck” must be given by the employer to their employee. It s better understood as “collection of dues”. It generally depends upon the condition whether the employee quit or employer fired the employee.
  • The Severance Package is one type of contractual agreement between the employer and the employee. The employer will provide the terminated employee with a severance package but it is not compulsory by law.
  • The Health Insurance is provided to the terminated employees. They have right to health insurance coverage after their separation from the employer. It is only for the specific period of around 20 to 24 weeks.
  • In India, those who come under Employee’s State Insurance Scheme are applicable for “unemployment benefits”. These are provided to unemployed worker who are qualified but are in search of employment.
  • The employer also issues a “letter of reference” to the outgoing employee stating his or her duration of employment, position and quality of performance.

Conclusion

There are many laws in every sector either public or private for the protection and welfare of different kinds of workers whether they are permanent, contractual or part time but very less people know about the proper use of the existing laws to avoid any type of exploitation by the employer. There is a need to make workers aware of their rights and laws to avoid misuse of laws and do not enter into contract agreement or bond without reading and knowing the legal prospect and conditions.