Kindly guide on notice period. If an employee is not able to serve to employer on notice period, due to some or other reason. But ready to pay notice period amount.And asked to pay gross instead of basic. This is the case happened with one of my relative ,were he have to leave organisation , as notice period is for three month & amount asked to pay is three month Gross.
Now my question is : Is there any law that specifies an employer can charge Gross pay instead of basic pay?
What is this statement Means( mention in letter): Have to serve 3 month Notice period or In lieu 3 month salary.
Does this specify three month gross salary. Because paying three month gross is very High for any employee. Please show some light to understand policy related to Notice period. That help my family in may ways.
Regards,
Yamini B
From India, undefined
Now my question is : Is there any law that specifies an employer can charge Gross pay instead of basic pay?
What is this statement Means( mention in letter): Have to serve 3 month Notice period or In lieu 3 month salary.
Does this specify three month gross salary. Because paying three month gross is very High for any employee. Please show some light to understand policy related to Notice period. That help my family in may ways.
Regards,
Yamini B
From India, undefined
Your question is valid. But above is the industry's regular practice. Because no where in labour acts, there is a clear definition of wages mentioned.
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Payment of wages act's definition of “wages” means all emoluments which are earned by an employee while on duty or on leave in accordance with the terms and conditions of his employments and which are paid or are payable to him in cash and includes dearness allowance but does not include any bonus, commission, house rent allowance, overtime wages and any other allowance.
The definition of ‘Basic Wages’ has been defined under Section 2(b) of the EPF & MP Act, 1952 as below:
Section 2(b) “basic wages” means all emoluments which are earned by an employee while on duty or on leave or on holidays with wages in either case in accordance with the terms of the contract of employment and which are paid or payable in cash to him, but does not include
i. the cash value of any food concession;
ii. any dearness allowance (that is to say, all cash payments by whatever name called paid to an employee on account of a rise in the cost of living), house rent allowance, overtime allowance, bonus, commission or any other
similar allowance payable to the employee in respect of his employment or of work done in such employment;
iii. any presents made by the employer;
The term “wages” has been defined u/s 2(22) of the ESIC Act in as under:-
1. All remuneration paid or payable in cash to an employee, if the terms of the contract of employment, express or implied, were fulfilled.
Payment of bonus act: “salary or wage” means all remuneration (other than remuneration in respect of over-time work) capable of being expressed in terms of money, which would, if the terms of employment, express or implied, were fulfilled, be payable to an employee in respect of his employment or of work done in such employment and includes dearness allowance (that is to say, all cash payments, by whatever name called, paid to an employee on account of a rise in the cost of living), but does not include—
(i) any other allowance which the employee is for the time being entitled to;
(ii) the value of any house accommodation or of supply of light, water, medical attendance or other amenity or of any service or of any concessional supply of foodgrains or other articles;
(iii) any travelling concession;
(iv) any bonus (including incentive, production and attendance bonus);
(v) any contribution paid or payable by the employer to any pension fund or provident fund or for the benefit of the employee under any law for the time being in force;
(vi) any retrenchment compensation or any gratuity or other retirement benefit payable to the employee or any ex gratia payment made to him;
(vii) any commission payable to the employee.
======================================
When the law itself was not clear on the definition of salary, Take Home salary, Gross salary, wages, CTC, etc., Courts and authorities were also silent in these type of cases. They are solving it through collective bargaining.
You can raise a dispute under Payment of wages act (if your pay is less than 18k per month). But it delays the process of the exit formalities like proper relieving from work and service certificates, etc.,
So, people start adjust the notice period days with their earned leaves and pay of their wages except their performance pays and bonuses.
All the best.
From India, Chennai
148=====================================
Payment of wages act's definition of “wages” means all emoluments which are earned by an employee while on duty or on leave in accordance with the terms and conditions of his employments and which are paid or are payable to him in cash and includes dearness allowance but does not include any bonus, commission, house rent allowance, overtime wages and any other allowance.
The definition of ‘Basic Wages’ has been defined under Section 2(b) of the EPF & MP Act, 1952 as below:
Section 2(b) “basic wages” means all emoluments which are earned by an employee while on duty or on leave or on holidays with wages in either case in accordance with the terms of the contract of employment and which are paid or payable in cash to him, but does not include
i. the cash value of any food concession;
ii. any dearness allowance (that is to say, all cash payments by whatever name called paid to an employee on account of a rise in the cost of living), house rent allowance, overtime allowance, bonus, commission or any other
similar allowance payable to the employee in respect of his employment or of work done in such employment;
iii. any presents made by the employer;
The term “wages” has been defined u/s 2(22) of the ESIC Act in as under:-
1. All remuneration paid or payable in cash to an employee, if the terms of the contract of employment, express or implied, were fulfilled.
Payment of bonus act: “salary or wage” means all remuneration (other than remuneration in respect of over-time work) capable of being expressed in terms of money, which would, if the terms of employment, express or implied, were fulfilled, be payable to an employee in respect of his employment or of work done in such employment and includes dearness allowance (that is to say, all cash payments, by whatever name called, paid to an employee on account of a rise in the cost of living), but does not include—
(i) any other allowance which the employee is for the time being entitled to;
(ii) the value of any house accommodation or of supply of light, water, medical attendance or other amenity or of any service or of any concessional supply of foodgrains or other articles;
(iii) any travelling concession;
(iv) any bonus (including incentive, production and attendance bonus);
(v) any contribution paid or payable by the employer to any pension fund or provident fund or for the benefit of the employee under any law for the time being in force;
(vi) any retrenchment compensation or any gratuity or other retirement benefit payable to the employee or any ex gratia payment made to him;
(vii) any commission payable to the employee.
======================================
When the law itself was not clear on the definition of salary, Take Home salary, Gross salary, wages, CTC, etc., Courts and authorities were also silent in these type of cases. They are solving it through collective bargaining.
You can raise a dispute under Payment of wages act (if your pay is less than 18k per month). But it delays the process of the exit formalities like proper relieving from work and service certificates, etc.,
So, people start adjust the notice period days with their earned leaves and pay of their wages except their performance pays and bonuses.
All the best.
From India, Chennai
What is defined as salary for the purpose of notice pay in the contract of service i.e.letter of appointment or service rules. If it is defined as mere basic pay, then you have to pay basic pay only.If it is defined as gross salary, then you need to pay gross salary,.If nothing is defined, then gross salary will be the basis for notice pay Pleas note that gross salary means not CTC.
B.Saikumar
From India, Mumbai
B.Saikumar
From India, Mumbai
Dear Yamini,
The fulfillment of any contractual obligation is to be determined only in terms of the contract. When there is no inherent ambiguity in a particular clause of the contract, no party to the contract can retract on the basis of his personal assumptions arising out his inabilities. Legal definitions are only based on the purpose for which the particular enactment stands for and not for every other things. Reverting, for example to the definitions cited by Mr.Stephan, the term wages has been thus defined in the respective enactments with some inclusions and exclusions only and not absolutely. So, in my opinion, such legal definitions may not serve any purpose while interpreting an exit clause in the contract of employment or letter of appointment than what is mentioned therein in plain language. What will appear to any one's mind by the phrase "three months' salary" is "three months eligible salary without deductions for three months' work without any unauthorised absence" and nothing more and nothing less. In case if one's service is simply terminated by the employer on the basis of the same exit clause, what the employee would expect as salary in lieu of notice, three months' gross or basic? So, personal incapabilty of performance of the employee can not be an excuse in complying with the exit clause while resigning nor of the employer while simply terminating the services of an employee.
From India, Salem
The fulfillment of any contractual obligation is to be determined only in terms of the contract. When there is no inherent ambiguity in a particular clause of the contract, no party to the contract can retract on the basis of his personal assumptions arising out his inabilities. Legal definitions are only based on the purpose for which the particular enactment stands for and not for every other things. Reverting, for example to the definitions cited by Mr.Stephan, the term wages has been thus defined in the respective enactments with some inclusions and exclusions only and not absolutely. So, in my opinion, such legal definitions may not serve any purpose while interpreting an exit clause in the contract of employment or letter of appointment than what is mentioned therein in plain language. What will appear to any one's mind by the phrase "three months' salary" is "three months eligible salary without deductions for three months' work without any unauthorised absence" and nothing more and nothing less. In case if one's service is simply terminated by the employer on the basis of the same exit clause, what the employee would expect as salary in lieu of notice, three months' gross or basic? So, personal incapabilty of performance of the employee can not be an excuse in complying with the exit clause while resigning nor of the employer while simply terminating the services of an employee.
From India, Salem
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