Dear Experts,
Need your view on the below points:
1. Can any organization (registered under Company Act) deduct an employee's fixed salary (agreed upon by both parties in the employment agreement) without the consent of the employee?
2. If the situation is a lockdown, like April '20 to July '20, then?
3. If the company is from the medical/healthcare segment and had a production growth of more than 3000% and business growth of 500% comparing to FY2019-20, can they implement a salary cut?
4. During April '20 - July '20, a few employees were paid 100% of their salary, those who are close to the management, and others (general employees) received 50% of their fixed salary. Is this acceptable by law?
5. Regarding variable pay (which is performance-linked) for FY2019-20, does the company have the authority to not pay when some employees received it and some did not? You may assume that the performers received the payment, but if someone is not a performer, is it necessary to communicate to the employee that they will not receive it, especially when it was clearly agreed upon by both parties during the appointment?
Need your valuable suggestions/guidance on the above, please.
Regards,
Paul
From India, New Delhi
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1Need your view on the below points:
1. Can any organization (registered under Company Act) deduct an employee's fixed salary (agreed upon by both parties in the employment agreement) without the consent of the employee?
2. If the situation is a lockdown, like April '20 to July '20, then?
3. If the company is from the medical/healthcare segment and had a production growth of more than 3000% and business growth of 500% comparing to FY2019-20, can they implement a salary cut?
4. During April '20 - July '20, a few employees were paid 100% of their salary, those who are close to the management, and others (general employees) received 50% of their fixed salary. Is this acceptable by law?
5. Regarding variable pay (which is performance-linked) for FY2019-20, does the company have the authority to not pay when some employees received it and some did not? You may assume that the performers received the payment, but if someone is not a performer, is it necessary to communicate to the employee that they will not receive it, especially when it was clearly agreed upon by both parties during the appointment?
Need your valuable suggestions/guidance on the above, please.
Regards,
Paul
From India, New Delhi
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Dear Paul,
I think that all your questions have been raised in the backdrop of country-wide lockdown due to the outbreak of Covid-19. It is pertinent to note that the Ministry of Home Affairs has withdrawn its orders issued under the DM Act, 2005, on the compulsory payment of full salaries to employees on account of the lockdown. Therefore, your company can refuse to pay for the period of lockdown on the basis of no work-no pay. Still, it can be disputed by the employees claiming layoff compensation.
"No" is the answer for all the other questions as they involve a breach of the contract of employment and preferential treatment to some sections of the employees by the management. The affected employees may jointly raise an industrial dispute under Section 2(k) of the ID Act, 1947, or institute a Civil Case against the breach of the contract of employment depending on their employment status.
From India, Salem
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I think that all your questions have been raised in the backdrop of country-wide lockdown due to the outbreak of Covid-19. It is pertinent to note that the Ministry of Home Affairs has withdrawn its orders issued under the DM Act, 2005, on the compulsory payment of full salaries to employees on account of the lockdown. Therefore, your company can refuse to pay for the period of lockdown on the basis of no work-no pay. Still, it can be disputed by the employees claiming layoff compensation.
"No" is the answer for all the other questions as they involve a breach of the contract of employment and preferential treatment to some sections of the employees by the management. The affected employees may jointly raise an industrial dispute under Section 2(k) of the ID Act, 1947, or institute a Civil Case against the breach of the contract of employment depending on their employment status.
From India, Salem
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Thank you very much for the clarification, Mr. Umakanthan. It's really helpful.
What I understood is that employers are taking advantage of the situation, and employees are suffering the most. Your comments will help the readers as well, especially those who have been victims of the situation.
Regards,
Paul
From India, New Delhi
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What I understood is that employers are taking advantage of the situation, and employees are suffering the most. Your comments will help the readers as well, especially those who have been victims of the situation.
Regards,
Paul
From India, New Delhi
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