Dear all,
The penal action regarding the delay in the payment of wages is covered under the Payment of Wages Act 1936. Section 3 thereof states that the employer shall be responsible for the payment of wages to the persons employed by him. The Act further specifies that in the case of a factory, it shall be the Factory Manager as per the Factories Act 1948. In the case of an industrial or other establishment, it shall be the person responsible for the supervision and control of the establishment (as in the case of Airlines). The Inspector under the PW Act has the authority to file a complaint against the person whom he feels is responsible for the payment of wages. Hence, the HR Manager who exercises supervision and control can be made liable for default.
Regards,
KK
From India, Bhopal
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211The penal action regarding the delay in the payment of wages is covered under the Payment of Wages Act 1936. Section 3 thereof states that the employer shall be responsible for the payment of wages to the persons employed by him. The Act further specifies that in the case of a factory, it shall be the Factory Manager as per the Factories Act 1948. In the case of an industrial or other establishment, it shall be the person responsible for the supervision and control of the establishment (as in the case of Airlines). The Inspector under the PW Act has the authority to file a complaint against the person whom he feels is responsible for the payment of wages. Hence, the HR Manager who exercises supervision and control can be made liable for default.
Regards,
KK
From India, Bhopal
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The subject is the prosecution of HR for certain lapses as cited in the topic for discussion such as dishonor of cheques or late payment of salaries. It means it hints at some action against an erring individual under some law. The topic thus has legal import and needs to be answered from a legal perspective but not from moral or ethical perspectives. When an act attracts the penal provisions of any particular Act, it is a settled position in law that the penal provisions of the said Act need to be interpreted strictly but not liberally or broadly so as to cast a wider net to involve everyone. The labor laws normally envisage an action against an employer for the breach of provisions of an Act. The relevant labor law which is breached defines who is an employer.
Usually, an employer is defined under labor laws as someone who wields the ultimate control over the affairs of the establishment. For example, for the breach of the provisions of the Factories Act, the occupier is the one who is under the ultimate control of the affairs of the factory and thus for this purpose, the board may nominate one of the directors as the occupier. In such a case, action lies against the said director for any breach of the provisions of the Act but not on any individual officer. Therefore, one needs to figure out who is the entity who has the ultimate control of the affairs of the company under the particular labor legislation. However, an individual officer can be held liable only when the occupier or the employer proves that he has issued instructions for complying so and so provision but he did not obey his instructions.
The case of dishonor of cheques may attract the penal provisions both under the Negotiable Instruments Act as well as under a labor Act like the Payment of Wages Act or the Minimum Wages Act. The accountabilities need to be established under the respective Acts on the above lines. I have not gone through the provisions of the Negotiable Instruments Act and therefore I am not able to comment on fixing the liability for the dishonor of cheques if the same is issued by a company. Normally the principle in such cases is that the courts in criminal proceedings lift the corporate veil to find out the person who is responsible for the said cheque.
B. Saikumar
HR & Labor Law Advisor
Mumbai
From India, Mumbai
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Usually, an employer is defined under labor laws as someone who wields the ultimate control over the affairs of the establishment. For example, for the breach of the provisions of the Factories Act, the occupier is the one who is under the ultimate control of the affairs of the factory and thus for this purpose, the board may nominate one of the directors as the occupier. In such a case, action lies against the said director for any breach of the provisions of the Act but not on any individual officer. Therefore, one needs to figure out who is the entity who has the ultimate control of the affairs of the company under the particular labor legislation. However, an individual officer can be held liable only when the occupier or the employer proves that he has issued instructions for complying so and so provision but he did not obey his instructions.
The case of dishonor of cheques may attract the penal provisions both under the Negotiable Instruments Act as well as under a labor Act like the Payment of Wages Act or the Minimum Wages Act. The accountabilities need to be established under the respective Acts on the above lines. I have not gone through the provisions of the Negotiable Instruments Act and therefore I am not able to comment on fixing the liability for the dishonor of cheques if the same is issued by a company. Normally the principle in such cases is that the courts in criminal proceedings lift the corporate veil to find out the person who is responsible for the said cheque.
B. Saikumar
HR & Labor Law Advisor
Mumbai
From India, Mumbai
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Dear Sanneev,
The answer of your quetion is "No" Kingfisher Airlines is a transport service provioder and it comes under the purview of Shops & Estblishment Act.Because all the emplyees surely getting more than 10000/- PM they could not come under the purview of the Payment of wages Act.It is then certainly to be follwo the condition of appointment letter under the purview of Indian Contract Act.For this you could not procecute HR because he is no where in the agreement contract.
You can file a complaint against the contracting authourity only.
Mangesh Wakodkar
Aurangabad
From India, Pune
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The answer of your quetion is "No" Kingfisher Airlines is a transport service provioder and it comes under the purview of Shops & Estblishment Act.Because all the emplyees surely getting more than 10000/- PM they could not come under the purview of the Payment of wages Act.It is then certainly to be follwo the condition of appointment letter under the purview of Indian Contract Act.For this you could not procecute HR because he is no where in the agreement contract.
You can file a complaint against the contracting authourity only.
Mangesh Wakodkar
Aurangabad
From India, Pune
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It is an emphatic "NO" HR person is also an employee of the company and any law suit is against the company and so the top man either CEO or MD is answerable to legal points.
From India, Hyderabad
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From India, Hyderabad
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I do agree with the compliance part, and that is why I mentioned it at the beginning of the question. I also think that this is where most HR professionals often make mistakes. In many companies, the financial health of the company is not shared with the HR department; it is considered confidential. Therefore, if the management of the company states that they do not have sufficient funds to pay the employees, in such scenarios, there is hardly anything that HR can do.
"We do not have the funds to pay; however, we need to retain the employees to resolve the crisis as soon as possible." This is a very tricky situation. HR does not have control over the finances of the company, nor do they control the clients and their payments, or sign the salary checks. In such scenarios, how can they be held responsible? They cannot be, even though they are the ones who sign the offer and appointment letters.
Regards,
Sanjeev
From India, Mumbai
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"We do not have the funds to pay; however, we need to retain the employees to resolve the crisis as soon as possible." This is a very tricky situation. HR does not have control over the finances of the company, nor do they control the clients and their payments, or sign the salary checks. In such scenarios, how can they be held responsible? They cannot be, even though they are the ones who sign the offer and appointment letters.
Regards,
Sanjeev
From India, Mumbai
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All departments come together and make a company”. They all are connected to each other, and directly comes under MANAGEMENT who controls them and responsible for all good and bad things.
Agreed and we all knows that HR has nothing to do with this kind of situation and can’t even avoid it and are not responsible for Fund availability but Management (Finance directly under Management). Acceptable that finance on many terms never disclose the financial situation of a company/organization to other department but to Management who Management is directly responsible for this but truth other face of this is that no one (Management, Employee, Client or other) wants to have this crisis situation and helpless if found in it.
Concern is acceptable and solution, we all well aware what we should do or what not
[Can HR be prosecuted for non-payment or late-payment of salaries?
Can HR be prosecuted if the salary cheque gets dishonored?
In such situations, what are the remedies for HR Pros?]
So far we have discussed the main query/questions at length and I believe the answer has already been acquired.
From India, Gurgaon
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Agreed and we all knows that HR has nothing to do with this kind of situation and can’t even avoid it and are not responsible for Fund availability but Management (Finance directly under Management). Acceptable that finance on many terms never disclose the financial situation of a company/organization to other department but to Management who Management is directly responsible for this but truth other face of this is that no one (Management, Employee, Client or other) wants to have this crisis situation and helpless if found in it.
Concern is acceptable and solution, we all well aware what we should do or what not
[Can HR be prosecuted for non-payment or late-payment of salaries?
Can HR be prosecuted if the salary cheque gets dishonored?
In such situations, what are the remedies for HR Pros?]
So far we have discussed the main query/questions at length and I believe the answer has already been acquired.
From India, Gurgaon
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Sanjeev, let me narrate an incident.
Several years back, I got an offer as a compliance head from a big Indian company. The hiring manager didn't tell me that people don't get salaries on time and the position is demanding in terms of time. By a stroke of luck, due to distance and extended timings, I refused to join. Three to four months later, the same person called me for help.
There are several instances when the viability of an individual's rank is questionable, and even entire divisions fail, and we have to keep quiet.
Purely for information, there is a body named the "Advertising Standards Council of India," which can penalize misleading advertisements, including those related to recruitment.
From India, Delhi
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Several years back, I got an offer as a compliance head from a big Indian company. The hiring manager didn't tell me that people don't get salaries on time and the position is demanding in terms of time. By a stroke of luck, due to distance and extended timings, I refused to join. Three to four months later, the same person called me for help.
There are several instances when the viability of an individual's rank is questionable, and even entire divisions fail, and we have to keep quiet.
Purely for information, there is a body named the "Advertising Standards Council of India," which can penalize misleading advertisements, including those related to recruitment.
From India, Delhi
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Generally, the Works Manager (Incharge of Unit) and the Occupier are prosecuted under the Payment of Wages Act for non-payment of salaries on the due date. However, by discussing the matter with the Unions, arranging for part payments/advances, a way can be found out.
From India, Pune
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From India, Pune
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Hi,
Every employer appoints a person responsible for payments of pay and allowances to employees. The same is the case as per the Payment of Wages Act. Hence, in the given situation, the responsibility for delayed payments or dishonored checks will lie with the person notified for this purpose. If it is HR, they are responsible for fulfilling their official duties. Other discussions are immaterial.
Regards,
S.K. Johri
From India, Delhi
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Every employer appoints a person responsible for payments of pay and allowances to employees. The same is the case as per the Payment of Wages Act. Hence, in the given situation, the responsibility for delayed payments or dishonored checks will lie with the person notified for this purpose. If it is HR, they are responsible for fulfilling their official duties. Other discussions are immaterial.
Regards,
S.K. Johri
From India, Delhi
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