There are two different views on this matter - one saying that we can deduct the excess paid and another saying that we cannot deduct. But what is the legal basis for both these views? What does Payment of Wages Act or any other relevant Act say in this context? Or, are there any decided cases on this issue? We cannot be acting on the basis of opinions. We have to act on the basis of the law. Ofcourse I am not denying the practicality of the suggestion at post # 4 above.
From India, Madras
112From India, Madras
Dear All,
Greetings of the Day!!!!
With due respect to all contributors I would submit my views as under:
1. First of all I would say that Law of Limitation does not bar the recovery of any payment made in excess to an employee. It means that law permits recovery of any excess payment.
2. A written notice should be given to the employee communicating the facts and requesting the employee to pay back the amount paid in excess to him. An option of repayment in instalments has to be given to the employee if he/she is not able to repay in lumpsum.
3. Adjustment against future rise is not a good option from accounts and legal point of view.
4. Matter of payment of excess amount of EPF can be settled with EPFO.
5. An explanation should be asked from the Accounts Dept. as to how the mistake continued for three years. Appropriate penalty should be imposed as a disciplinary measure on the delinquent employee.
Lastly I would emphasize that appropriate action should be initiated ASAP.
With due regards to all.
srivastavacmlalatgmaildotcom
From India, New Delhi
Greetings of the Day!!!!
With due respect to all contributors I would submit my views as under:
1. First of all I would say that Law of Limitation does not bar the recovery of any payment made in excess to an employee. It means that law permits recovery of any excess payment.
2. A written notice should be given to the employee communicating the facts and requesting the employee to pay back the amount paid in excess to him. An option of repayment in instalments has to be given to the employee if he/she is not able to repay in lumpsum.
3. Adjustment against future rise is not a good option from accounts and legal point of view.
4. Matter of payment of excess amount of EPF can be settled with EPFO.
5. An explanation should be asked from the Accounts Dept. as to how the mistake continued for three years. Appropriate penalty should be imposed as a disciplinary measure on the delinquent employee.
Lastly I would emphasize that appropriate action should be initiated ASAP.
With due regards to all.
srivastavacmlalatgmaildotcom
From India, New Delhi
Dear All,
In continuation to my views expressed above I would further point out that an employee receiving the excess salary is equally responsible for the mistake. An employee knows how much salary is to be paid to him. Even an illiterate employee is fully aware of the fact as to how mcuh salary he would get. An employee must check the amount of salary at the time of receiving payment or credit of salary into the bank acccount. A salary slip is also given to employees. Therefore it is the not only the moral but also professional duty of an employee to report the excess amount received by him/her. An employee can not refuse to repay the excess payment under the cover of any union threat or any other labour law. There is no labour law to support an employee against recovery of excess payment. In this case a warning has also to be issued to the concerned employee for not reporting the discrepancy.
I would further suggest that a NOTE should be printed on salary slips that employees must check the accuracy of salary being paid to them and report any discrepancy to the concerned department.
With best regards to all.
C.M. Lal Srivastava
From India, New Delhi
In continuation to my views expressed above I would further point out that an employee receiving the excess salary is equally responsible for the mistake. An employee knows how much salary is to be paid to him. Even an illiterate employee is fully aware of the fact as to how mcuh salary he would get. An employee must check the amount of salary at the time of receiving payment or credit of salary into the bank acccount. A salary slip is also given to employees. Therefore it is the not only the moral but also professional duty of an employee to report the excess amount received by him/her. An employee can not refuse to repay the excess payment under the cover of any union threat or any other labour law. There is no labour law to support an employee against recovery of excess payment. In this case a warning has also to be issued to the concerned employee for not reporting the discrepancy.
I would further suggest that a NOTE should be printed on salary slips that employees must check the accuracy of salary being paid to them and report any discrepancy to the concerned department.
With best regards to all.
C.M. Lal Srivastava
From India, New Delhi
Mr. Srivastava,
When you have paid a certain amount as salary for 3 years, it becomes defacto the normal salary. It is not the duty of the employee to come and report an excess in the salary so long as the salary slip matches the amount of salary received. Specially not if everyone else or a certain group definately, got similar excesses.
No court or labour officer is going to allow you to recover the amount paid for 3 years from the concerned workers. It is only logical.
Recovery by adjusting against future rise (if the union agrees, that is) would not give rise to any accounting problems. Why should it ? The entry for salary or anything else is not being affected. The quantum of salary being paid in future does not go up at the rate it was expected to. Why should that affect accounts ?
And what are you planning to tell the pf department ? I made a mistake and paid more pf because I paid a higher salary to workers. Now give me the money back with interest. I would like to witness the reaction of the concerned officer :)
If you want to engineer a strike in your factory, then by all means, go ahead and give notice of recovery from the workers.
From India, Mumbai
When you have paid a certain amount as salary for 3 years, it becomes defacto the normal salary. It is not the duty of the employee to come and report an excess in the salary so long as the salary slip matches the amount of salary received. Specially not if everyone else or a certain group definately, got similar excesses.
No court or labour officer is going to allow you to recover the amount paid for 3 years from the concerned workers. It is only logical.
Recovery by adjusting against future rise (if the union agrees, that is) would not give rise to any accounting problems. Why should it ? The entry for salary or anything else is not being affected. The quantum of salary being paid in future does not go up at the rate it was expected to. Why should that affect accounts ?
And what are you planning to tell the pf department ? I made a mistake and paid more pf because I paid a higher salary to workers. Now give me the money back with interest. I would like to witness the reaction of the concerned officer :)
If you want to engineer a strike in your factory, then by all means, go ahead and give notice of recovery from the workers.
From India, Mumbai
There is nothing i know in law that allows you to recover from workers in such a case.
Even if the letter of the law allows (by not specifying how many months later you can initiate recovery), the courts will not allow it as it will be considered traversity of justice, misuse ofmlegal position and may even be considered as victimisation of the workers for alleged (or imagined) purposes.
The authority under the payment of wages act, the government labour office, factory inspector or anyone you approach for approval will refuse to support you on this.
Under the doctrin of equity (I hope I got the right one), this is a practice precedent and this becomes your set normal salary.
In any case, how much is the salary paid excess ? The quantum is also important.
From India, Mumbai
Even if the letter of the law allows (by not specifying how many months later you can initiate recovery), the courts will not allow it as it will be considered traversity of justice, misuse ofmlegal position and may even be considered as victimisation of the workers for alleged (or imagined) purposes.
The authority under the payment of wages act, the government labour office, factory inspector or anyone you approach for approval will refuse to support you on this.
Under the doctrin of equity (I hope I got the right one), this is a practice precedent and this becomes your set normal salary.
In any case, how much is the salary paid excess ? The quantum is also important.
From India, Mumbai
Yes, Mr Saikumar of Mumbai has given a very clear answer on the matter. The Management is having full right to recover any excess payment made. but in case when it has been given for a long period, it is difficult to deduct the same at lump sum at once, you can make gentle and comfortable request to the employees in accordance with the law of natural justice. Put it in the notice of the employees about excess paid to them towards DA and you can further enter into an agreement with the working employees for monthly deduction as well as for their increments depending upon their work appraisal.
Practically it is not so easy to recover the amount from the employees, and it will violate the provision of section 12 of EPF and MP Act, 1952 and the provision of ESI Act.
Regards
From India, Mumbai
Practically it is not so easy to recover the amount from the employees, and it will violate the provision of section 12 of EPF and MP Act, 1952 and the provision of ESI Act.
Regards
From India, Mumbai
Mr. Srivastava's statement that employees are equally responsible for the blunder in getting more salary looks absurd.
The excess payment made is due to fixation of a higher rate of DA for all the company employees and it is not due to any arithmatic error for the employees to make out the excess payment. Moreover, the employees will not be knowing the methodology of fixation of DA in general and they will be going by the Management intimation about the DA payable based on the rise in consumer price index unless it is a very big organisation, where the Trade unions take care of the quantum of DA the employees are entitled to receive. Therefore, it is not clear how one could fix the responsibilty on the employees for the mistake committed by the administration with no fault on the part of employees.
S. Dass
From India, Bangalore
The excess payment made is due to fixation of a higher rate of DA for all the company employees and it is not due to any arithmatic error for the employees to make out the excess payment. Moreover, the employees will not be knowing the methodology of fixation of DA in general and they will be going by the Management intimation about the DA payable based on the rise in consumer price index unless it is a very big organisation, where the Trade unions take care of the quantum of DA the employees are entitled to receive. Therefore, it is not clear how one could fix the responsibilty on the employees for the mistake committed by the administration with no fault on the part of employees.
S. Dass
From India, Bangalore
Dear
It will not be possible for recovery/deduction of the DA excess paid to the unorganized workers deployed in last three years by your establishment. It will be gross violation of section 12 of EPF and MP Act, and section 72 of the ESI Act.
Thanks
Regards
R B Yadav
Advocate
From India, Mumbai
It will not be possible for recovery/deduction of the DA excess paid to the unorganized workers deployed in last three years by your establishment. It will be gross violation of section 12 of EPF and MP Act, and section 72 of the ESI Act.
Thanks
Regards
R B Yadav
Advocate
From India, Mumbai
Dear All,
If we discuss about the topic, it will increase its volume in pages but there will not be any results. To conclude from any point of view, we can not retrieve the excess DA paid to the employees by any means.
Regards,
RK
From India, Mumbai
If we discuss about the topic, it will increase its volume in pages but there will not be any results. To conclude from any point of view, we can not retrieve the excess DA paid to the employees by any means.
Regards,
RK
From India, Mumbai
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Employee cannot escape recovery of excess payment SC 01.11.2013.pdf
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