Legal Notice regarding salary not paid
Overview
The number of litigation cases is growing daily in today's modern environment and in the competitive market. Everyone is affected by the litigation, regardless of the type of business, person, or enterprise. Few people like to send legal notice to the opponent before starting a lawsuit, but some do it nevertheless. Before starting a lawsuit, it may be required by some laws to serve a legal notice.
For instance, if a cheque bounces, legal notice must be sent to the party at issue before the case may be brought before a judge. A legal notice informs the recipient that, in the event that the demand is not met, legal action may be taken in court.
Why filing a legal notice is crucial?
- Since filing a case in court is a rather drawn-out process, we should always consider settling the problem before trial. The legal process is always highly pricey and drawn out.
- By giving legal notice of their grievances to the opposing party, the aggrieved party can demonstrate their purpose.
- Legal notice makes it abundantly apparent to the parties what would happen if they disregarded it.
- An adversary party is warned via a legal notice.
- Legal notice can aid in achieving the intended outcome since it fosters communication between the parties and helps to bring about mutual understanding.
- Fees for serving legal notices are not extremely expensive.
- It demonstrates the party's intent and serves as evidence that they made an effort to reach a peaceful resolution by providing legal notice.
Legal Notice regarding salary non-payment
Employers have a responsibility to pay their employees' salaries on time. However, one of the most frequent issues that an employee has today while working is the non-payment of income. These situations typically arise when an employee is going to retire or if the employer has fired any employees, and the employee typically feels helpless in these situations. In this case, the offended worker may write the employer a legal notice for compensation.
Employees can reclaim their income or earnings through a number of legal procedures. But as a cost- and time-saving alternative to the drawn-out court process and in the hopes of receiving prompt relief, we strongly advise delivering a good legal notice prepared by a reliable advocate with thorough knowledge of the subject. The benefit of serving legal notice is that your employer might pay up all of your debts, saving you the trouble of appearing in court.
Acts governing how organizations pay salaries
- Contract Labour (Regulation and Abolishing) Act
According to Section 21 of the Act, the contractor is in charge of paying the wages to each employee he hires as contract labour, and those payments must be paid prior to the end of any applicable time period.
If the contractor does not pay the required number of wages within the allotted time, the principal employer will be responsible for paying the full number of wages owed to the contract labour that the contractor employed and recovering the amount so paid from the contractor either through a deduction from any amounts owed to the contractor under any contracts or as a debt owed by the contractor.
-
The 1953 Shops and Establishment Act
Many states have their own laws dictating how different businesses and establishments must operate within their borders. The Model Act states that a worker is entitled to earnings at the rate of double his regular rate of wages or such greater amount as may be authorized "when any worker is compelled to work on any day in excess of nine hours and forty-eight hours in a week."
A punishment of up to Rs. 2 Lakhs may be imposed on the employer for any violations of the Act's provisions or any rules issued under it by the State Government, including failure to pay wages. The extra fine may also be assessed.
-
Wages Act
The two main pieces of legislation that govern and regulate wages given by the employer to the employee are the Minimum Wages Act of 1948 and the Payment of Wages Act of 1936. The previous Act aims to establish a minimum wage that all workers must receive. The minimum wage varies from State to State and is set according to the nature of the work, which is listed in the Schedule of the Act.
On the other side, the Payment of Salary, Act of 1936 ensures that the employee or workman will receive their wages on time. As a result, the competent Government is given the authority to designate the following groups of officials to handle disputes resulting from salary deductions or payment delays-
-Workmen's compensation commissioner
-Officer of the State Government having a minimum of two years' experience who is not below the rank of regional labour commissioner.
-The labour court or industrial dispute tribunal's presiding officer
-Other officials with prior judicial magistrate or civil judge experience. -
Industrial Disputes Act
The Act's Section 33C addresses the recovery of money that is owed to the employee. This clause states that any employee, anybody authorized by the employee, or the legal heir in the case of a deceased employee, may submit a request for salary payment to the relevant authorities. The competent government issues a certificate for payment of dues once it is satisfied that the money is indeed owed. However, the Labour Court will make the decision if it is necessary to calculate the amount of money.
- Use of Arbitration
These days, arbitration clauses are frequently included in contracts. Therefore, if the arbitration clause applies, the employee may continue to resolve the disagreement using the Arbitration and Conciliation Act of 1996. It is a speedy settlement that takes place outside of court.
According to Section 21 of the Act, the contractor is in charge of paying the wages to each employee he hires as contract labour, and those payments must be paid prior to the end of any applicable time period.
If the contractor does not pay the required number of wages within the allotted time, the principal employer will be responsible for paying the full number of wages owed to the contract labour that the contractor employed and recovering the amount so paid from the contractor either through a deduction from any amounts owed to the contractor under any contracts or as a debt owed by the contractor.
Many states have their own laws dictating how different businesses and establishments must operate within their borders. The Model Act states that a worker is entitled to earnings at the rate of double his regular rate of wages or such greater amount as may be authorized "when any worker is compelled to work on any day in excess of nine hours and forty-eight hours in a week."
A punishment of up to Rs. 2 Lakhs may be imposed on the employer for any violations of the Act's provisions or any rules issued under it by the State Government, including failure to pay wages. The extra fine may also be assessed.
The two main pieces of legislation that govern and regulate wages given by the employer to the employee are the Minimum Wages Act of 1948 and the Payment of Wages Act of 1936. The previous Act aims to establish a minimum wage that all workers must receive. The minimum wage varies from State to State and is set according to the nature of the work, which is listed in the Schedule of the Act.
On the other side, the Payment of Salary, Act of 1936 ensures that the employee or workman will receive their wages on time. As a result, the competent Government is given the authority to designate the following groups of officials to handle disputes resulting from salary deductions or payment delays-
-Workmen's compensation commissioner-Officer of the State Government having a minimum of two years' experience who is not below the rank of regional labour commissioner.
-The labour court or industrial dispute tribunal's presiding officer
-Other officials with prior judicial magistrate or civil judge experience.These days, arbitration clauses are frequently included in contracts. Therefore, if the arbitration clause applies, the employee may continue to resolve the disagreement using the Arbitration and Conciliation Act of 1996. It is a speedy settlement that takes place outside of court.
Law for Managers, Executives, and Others
The non-payment of salary problem often does not affect personnel at the executive or administrative level. However, if that were to occur, they would be able to sue their employer civilly under Order 37 of the CPC, 1908. This is the quicker process than the typical civil court process known as summary suits.
Company with fraudulent or dishonest aim, not paying-
The following remedies are possible if the employee is harmed by the employer's deceitful or deceptive intent-
- 2013's Companies Act, Section 447, lays out the penalties for fraud. imprisonment for a minimum of six months and a maximum of ten years.
- A fine that cannot be less than the amount of the fraud and may not be less than three times the amount of the fraud
- Other actions included in the 2013 Companies Act's Section 447.
- Filing of a criminal complaint under Indian law.
Documents needed to send the legal notification include
- Employment contract copy
- A copy of a bank statement is used as proof that the salary was not paid.
- Appointment letter
- Details of all extra perks and bonuses
The following types of relief may be demanded in the legal notice
- Payment of an overdue salary
- Interest is paid for the delay.
What actions can employees use to reclaim unpaid wages?
Following the delivery of a legal notice to the employer, the employee may pursue the following actions if the employer does not reply and does not pay the salary:
- Contact the Labour Commissioner first- The employee is welcome to speak with the labour commissioner and explain the situation. It is suggested that the complaint submitted to the labour commissioner be accompanied by copies of the legal notice provided to the employer, the employment contract, and a bank statement. It is the responsibility of the labour commissioner to settle disputes between employers and employees.
- Consult with the Labour Court- The employee may go to the labour court if the labour commissioner is unable to resolve the issue. According to the Industrial Disputes Act of 1947, this lawsuit may be brought. But this lawsuit must be filed within a year of the day the compensation becomes due. The case must be decided by the Labour Court within three months.
The Labour Court sets a deadline that must be met without exception. When the Presiding Officer of the specific Labour Court determines that it is appropriate or essential to do so, the time period is around three months. The Presiding Officer has the authority to extend the time limit for specific justifications in writing if necessary. The Labour Court will also investigate whether the employer has received legal notification that the provident fund is overdue.
- Consult a civil court- According to the Civil Procedure Code of 1908, employees in executive or managerial positions may launch a lawsuit for non-payment of wages in a civil court. However, it is emphasized that this should not be the employee's first choice of solution.
- Utilizing the NCLT- According to the 2016 Insolvency and Bankruptcy Code, employees are regarded as operational creditors. Therefore, a request for the recovery of underpaid salary may be made to the NCLT. However, a
certain prerequisite must be met for the IBC to be applied. which are
-The candidate must be a company employee.
-The underpaid salary must be at least Rs. 1 lakh.
-One crore rupees is the greatest amount of overdue salary.
The NCLT must decide whether to approve or reject this application within 14 days. Within 180 days, the entire corporate insolvency resolution process must be completed. The NCLT, however, has the option to add another 90 days to this.The employer and the management of the business where the employee was employed must take legal notice to an employer for non-payment of wage seriously. The manager, the person in control of the location, or the directors of the business where the employee was employed may get notice of the amount that is due. Legal notification to a business may also be used as proof in court. A court will rule in favour of the employee as a result of the legal notification that was submitted to the business.
How you can reach us at Estabizz?
- Fill the form.
- Get a call back.
- Submit the required documents.
- Track the progress of your application.
- Get the expected results.
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Why filing a legal notice is crucial?
Legal Notice regarding salary non-payment
Acts governing how organizations pay salaries
Law for Managers, Executives, and Others
Documents needed to send the legal notification include
The following types of relief may be demanded in the legal notice
What actions can employees use to reclaim unpaid wages?
How you can reach us at Estabizz?
Blog