Hi Friends,
My son is a senior software professional and last year he was selected by a B"lore based software company to work for them in Belgium. As per Belgium policy, all benefits were payable to such employees in Belgium.
After having worked for couple of months, he resigned the job and joined a Gurgaon company from May this year. He gave stipulated period of notice for resignation but well before expiry of notice period it was accepted and consequent sudden winding up had resulted in incurring extra costs to him. After long delay, his employer released him full and final settlement amount. In between during phone talks, son orally consented to receiving money in India since the settlement payment was already badly delayed. Now in mid-August this year, the employer company remitted the settlement amount unliterally to his account, without his prior knowledge/consent and making undue deductions. The most disgusting part is that while making payment for the settlement part, the rate of exchange applied for is of April, 2013 i.e. the period of working with them and not the date on which the due amount has been transferred to him, resulting in loss to him in the vacinity of around 20-25 thousands of rupees.
Being a professional, he can ill-afford to spend time in pursuing the matter legally and it may not be cost effective and commensurate to efforts invloved. On the face of it patently injustice has been done to him but the management has flatly denied to make good for the loss or transfer the amount to him in Euros in Belgium as per Belgium policy on the plea that the settlement once done cannot be reversed.
Valued opinion is solicited as to how to proceed in the matter to achieve results - may be at bureaucratic level or else some other way to get the desired results. Are there any judgements/rules regarding applicability of exchange rate as on the date of actual payment though the plea is so obvious on the face of it.
i m bhatia.
From India, Delhi
My son is a senior software professional and last year he was selected by a B"lore based software company to work for them in Belgium. As per Belgium policy, all benefits were payable to such employees in Belgium.
After having worked for couple of months, he resigned the job and joined a Gurgaon company from May this year. He gave stipulated period of notice for resignation but well before expiry of notice period it was accepted and consequent sudden winding up had resulted in incurring extra costs to him. After long delay, his employer released him full and final settlement amount. In between during phone talks, son orally consented to receiving money in India since the settlement payment was already badly delayed. Now in mid-August this year, the employer company remitted the settlement amount unliterally to his account, without his prior knowledge/consent and making undue deductions. The most disgusting part is that while making payment for the settlement part, the rate of exchange applied for is of April, 2013 i.e. the period of working with them and not the date on which the due amount has been transferred to him, resulting in loss to him in the vacinity of around 20-25 thousands of rupees.
Being a professional, he can ill-afford to spend time in pursuing the matter legally and it may not be cost effective and commensurate to efforts invloved. On the face of it patently injustice has been done to him but the management has flatly denied to make good for the loss or transfer the amount to him in Euros in Belgium as per Belgium policy on the plea that the settlement once done cannot be reversed.
Valued opinion is solicited as to how to proceed in the matter to achieve results - may be at bureaucratic level or else some other way to get the desired results. Are there any judgements/rules regarding applicability of exchange rate as on the date of actual payment though the plea is so obvious on the face of it.
i m bhatia.
From India, Delhi
Mr. Bhatia,
On face of the case, information shared is not enough to give your guidance.
Few important factors are "first and foremost "Type of Contract Employment". All will depend on this. Only after someone studies this contract one can advise you properly. Suggest consult the same with a CA (International Tax Expert) or a Solicitor (NRI Expert), to get their advise.
I feel, Loss amounting due to forex exchange rate argument, will not benefit you as it has been in various ground failed to yield the benefit as its usually termed as "gambling". You gain if it goes up and loose if it goes down. So, rather fighting on forex rate ask for your son's legitimate full and final settlement as per company policies and appropriate Labor act, which ever is applicable.
Ukmitra
From Saudi Arabia, Riyadh
296On face of the case, information shared is not enough to give your guidance.
Few important factors are "first and foremost "Type of Contract Employment". All will depend on this. Only after someone studies this contract one can advise you properly. Suggest consult the same with a CA (International Tax Expert) or a Solicitor (NRI Expert), to get their advise.
I feel, Loss amounting due to forex exchange rate argument, will not benefit you as it has been in various ground failed to yield the benefit as its usually termed as "gambling". You gain if it goes up and loose if it goes down. So, rather fighting on forex rate ask for your son's legitimate full and final settlement as per company policies and appropriate Labor act, which ever is applicable.
Ukmitra
From Saudi Arabia, Riyadh
Hello Mr Bhatia,
I must say that I am rather surprised at the outcome as you have described it. On the whole, Euro companies are quite quick and accurate in processing full and final settlement of salary or wages, because of the euro employment laws.
Having said that, as Ukmitra has written, it all depends on the type of employment contract.
Furthermore, again as Ukmitra has written, forex losses and gains are not "protected" at a particular rate.
If there is a dispute, as in your case, when the dispute is settled any amount owing is calculated in Euro's at the time of resolution, the rate cannot be "backdated".
You are right that to pursue the matter may not be economically viable through legal channels.
However, you are legally entitled to ask for interest to be paid, where an undue delay has occurred, as long as the delay was on the part of the employer and not your son. Also, you need to ask for clarification of the "undue deductions", but bear in mind that this may be due to the contract clauses.
The employer, is not obliged to get your permission to remit monies into your account, or to even inform you.
You may, if you wish, send me a scanned copy of the contract and I may be able to help you further.
In any case, I hope the above helps.
Regards,
Harsh
From United Kingdom, Barrow
I must say that I am rather surprised at the outcome as you have described it. On the whole, Euro companies are quite quick and accurate in processing full and final settlement of salary or wages, because of the euro employment laws.
Having said that, as Ukmitra has written, it all depends on the type of employment contract.
Furthermore, again as Ukmitra has written, forex losses and gains are not "protected" at a particular rate.
If there is a dispute, as in your case, when the dispute is settled any amount owing is calculated in Euro's at the time of resolution, the rate cannot be "backdated".
You are right that to pursue the matter may not be economically viable through legal channels.
However, you are legally entitled to ask for interest to be paid, where an undue delay has occurred, as long as the delay was on the part of the employer and not your son. Also, you need to ask for clarification of the "undue deductions", but bear in mind that this may be due to the contract clauses.
The employer, is not obliged to get your permission to remit monies into your account, or to even inform you.
You may, if you wish, send me a scanned copy of the contract and I may be able to help you further.
In any case, I hope the above helps.
Regards,
Harsh
From United Kingdom, Barrow
I am not sure but hopefully company must have followed the things as per the contract or agreement. Please have careful read of the contract and if there is any doubt regarding FNF then consult with a CA.
Also, as per the exchange rate applied by the company for the payment, I would say that it's always unsure and the company choose to pay according to the exchange rate that was at the time of resigning and not the current rate. I think, you can not complain for this matter as it's like a gamble and after seeing the scenario company decided to pay as per their choice.
From India, Lucknow
Also, as per the exchange rate applied by the company for the payment, I would say that it's always unsure and the company choose to pay according to the exchange rate that was at the time of resigning and not the current rate. I think, you can not complain for this matter as it's like a gamble and after seeing the scenario company decided to pay as per their choice.
From India, Lucknow
Learned professionals,
Plz allow me express my gratitude for having spared time to consider my problem.
I am not a person with legal background but in my himble view and as per the general prudence, the company's liability for the determined amount, if it is to be paid in in equivalent Indian rupees should be worked out on the basis of the rate of exchange prevaling as on the date of actual payment of the assessed amount. The same obviously holds good for international trade as well e.g. when an expoter gets payment of export bills in India, he gets credits into the account at the prevailing rate of exchange as on date of payment and not on the date on which expoorts were made. How can the rate prevailing two months prior to the date of payment of the amount be applied to the detriment of the interests of my son. Assuming that there were downward revision of exchange rates i.e. otherwise round, the company would have still paid to my son at higher rates I mean the rates prevailing in the period when he was working with them.
Additionally there was a promise from Finance Deptt. to son saying that they would be doing what is in his best interests and a promise to send him across the settlement datails. Nobody advised him that the choice of receiving money in indian currency would adversly affect him. Perhaps as per promise if the promised details would have been sent, he would have accepted the money in Euroes only as per company's policy. My son never gave his written consent for receiving payment in Indian rupees. The oral approval was in a way conditional.
Shall be obliged for a re-considered view in view of above submissions.
Thanks and with regards: i m bhatia.
From India, Delhi
Plz allow me express my gratitude for having spared time to consider my problem.
I am not a person with legal background but in my himble view and as per the general prudence, the company's liability for the determined amount, if it is to be paid in in equivalent Indian rupees should be worked out on the basis of the rate of exchange prevaling as on the date of actual payment of the assessed amount. The same obviously holds good for international trade as well e.g. when an expoter gets payment of export bills in India, he gets credits into the account at the prevailing rate of exchange as on date of payment and not on the date on which expoorts were made. How can the rate prevailing two months prior to the date of payment of the amount be applied to the detriment of the interests of my son. Assuming that there were downward revision of exchange rates i.e. otherwise round, the company would have still paid to my son at higher rates I mean the rates prevailing in the period when he was working with them.
Additionally there was a promise from Finance Deptt. to son saying that they would be doing what is in his best interests and a promise to send him across the settlement datails. Nobody advised him that the choice of receiving money in indian currency would adversly affect him. Perhaps as per promise if the promised details would have been sent, he would have accepted the money in Euroes only as per company's policy. My son never gave his written consent for receiving payment in Indian rupees. The oral approval was in a way conditional.
Shall be obliged for a re-considered view in view of above submissions.
Thanks and with regards: i m bhatia.
From India, Delhi
Dear Mr. Bhatia,
I read with interest your view.
However, it comes down to the contract,
Where exports are concerned; the amount to be paid for the goods is pre-determined by way of a pro-forma invoice.
The price to be paid is as per the pro-forma invoice no matter when the goods are dispatched.
Mechanisms do exist, where the payment of the goods occur, when they:
1. leave the factory gates
2. are delivered to the docks
3. when they are on board the ship
4. when they arrive at the importing country's docks
5. when they arrive at the importing company's warehouse.
Each one of the above will attract a different price, according to the contract, which in turn will determine the pro-forma invoice.
Both the buyer and seller, take a "gamble" on the exchange rate movement.
Similarly, the Euro company will have agreed a settlement according to the contract agreement, even if the agreement was verbal, as in your son's case.
Allow me to ask that if the currency movement was the other way round, would your son have returned the "excess"?
Furthermore, see it from the Euro company's view. They have paid (in their opinion) the correct amount, in their currency, therefore, they cannot be held responsible for forex movements, particularly as they have no control over it.
Now if they had made an adjustment and paid in Indian Rupees, the amount that you wish, then the amount in Euro would be incorrect, in that they would have overpaid. This would lead them into trouble with the authorities. I am sure you can understand.
I know this is, perhaps not what you want to hear. I can now only refer you to my earlier comments.
Regards,
Harsh
From United Kingdom, Barrow
I read with interest your view.
However, it comes down to the contract,
Where exports are concerned; the amount to be paid for the goods is pre-determined by way of a pro-forma invoice.
The price to be paid is as per the pro-forma invoice no matter when the goods are dispatched.
Mechanisms do exist, where the payment of the goods occur, when they:
1. leave the factory gates
2. are delivered to the docks
3. when they are on board the ship
4. when they arrive at the importing country's docks
5. when they arrive at the importing company's warehouse.
Each one of the above will attract a different price, according to the contract, which in turn will determine the pro-forma invoice.
Both the buyer and seller, take a "gamble" on the exchange rate movement.
Similarly, the Euro company will have agreed a settlement according to the contract agreement, even if the agreement was verbal, as in your son's case.
Allow me to ask that if the currency movement was the other way round, would your son have returned the "excess"?
Furthermore, see it from the Euro company's view. They have paid (in their opinion) the correct amount, in their currency, therefore, they cannot be held responsible for forex movements, particularly as they have no control over it.
Now if they had made an adjustment and paid in Indian Rupees, the amount that you wish, then the amount in Euro would be incorrect, in that they would have overpaid. This would lead them into trouble with the authorities. I am sure you can understand.
I know this is, perhaps not what you want to hear. I can now only refer you to my earlier comments.
Regards,
Harsh
From United Kingdom, Barrow
Dear Mr Bhatia,
This is in addition to what other senior members have said. You could have given the post with exact dates. It would have brought the clarity. In your post, I find following statement the most important one:
"On the face of it patently injustice has been done to him but the management has flatly denied to make good for the loss or transfer the amount to him in Euros in Belgium as per Belgium policy on the plea that the settlement once done cannot be reversed."
Try finding out whether your son can sue his ex-company on the above grounds. Since the payments were delayed he had to accept the full and final settlement in India. This was done to avoid the monetary loss causing out of delayed payment.
Now the most important points are:
a) What amount your son would have received if he would have got full and final settlement immediately in Belgium?
b) What amount did he get and what is the exact difference? Was the amount paid with interest?
Your son can sue his ex-company on the above grounds. Otherwise I do not find much merit in finding the case.
Thanks,
Dinesh V Divekar
From India, Bangalore
This is in addition to what other senior members have said. You could have given the post with exact dates. It would have brought the clarity. In your post, I find following statement the most important one:
"On the face of it patently injustice has been done to him but the management has flatly denied to make good for the loss or transfer the amount to him in Euros in Belgium as per Belgium policy on the plea that the settlement once done cannot be reversed."
Try finding out whether your son can sue his ex-company on the above grounds. Since the payments were delayed he had to accept the full and final settlement in India. This was done to avoid the monetary loss causing out of delayed payment.
Now the most important points are:
a) What amount your son would have received if he would have got full and final settlement immediately in Belgium?
b) What amount did he get and what is the exact difference? Was the amount paid with interest?
Your son can sue his ex-company on the above grounds. Otherwise I do not find much merit in finding the case.
Thanks,
Dinesh V Divekar
From India, Bangalore
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Full n final settlement.doc