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Non-Payment of Salary by Employer: Legal Remedies for Notice and Recovery

Updated: Feb 6

Encountering non-payment of salary by employer in private companies is a challenging situation that requires a systematic approach for resolution. Employees facing this issue may explore various legal remedies to ensure fair compensation, and this issue can it arise during employment or in the form of pending salary post-relieving from the company, including dues related to serving the notice period.

Non-Payment of Salary

To navigate this issue effectively, it's crucial to be well-versed in the terms and conditions of salary payments. When joining an organisation, it is essential to have a comprehensive employment contract that delineates details such as salary breakdown, incentives, bonuses, and monthly payment terms. The contract will also specify the notice period and the timeline for disbursing the salary post notice period completion.

As a first step, Initiating communication with the employer in writing is a crucial step when facing non-payment. Keeping meticulous records of all communication on emails letters, communication messages. This records can be used as evidence and important for building a case if legal action becomes necessary.

What are the acts through which an employee can claim remedy for non-payment of salary ? 1. The Payment of Wages Act, 1936: It holds significance in regulating timely wage payments. Applicable to workers with wages not exceeding Rs 24,000 per month, the act mandates full and final settlement of wages within two working days of removal, dismissal, retrenchment, or resignation. However, the inclusion of "resignation" in this timeline may vary across states. For legal recourse, employees can file a complaint under the Payment of Wages Act, 1936, with the labor department, providing necessary documents. The department will investigate and issue orders for pending salary payments.

2. The Industrial Disputes Act, 1947: It contains essential provisions related to wages, offering mechanisms for fair compensation and dispute resolution. Section 33C deals specifically with the recovery of money due from an employer. Workmen can make an application to the appropriate government for the recovery of due money, with a one-year limitation from the date it became due.

Filing a case under the Industrial Disputes Act, 1947, with the labor court or industrial tribunal is another avenue for addressing non-payment issues. Active participation in hearings and presentation of evidence allows the court to make informed decisions on matters related to non-payment of salary.

In conclusion, addressing non-payment of salary requires a strategic and informed approach. Employees should be well-versed in the terms of their employment contracts, initiate clear and documented communication with employers, and explore legal remedies available under acts such as the Payment of Wages Act, 1936, and the Industrial Disputes Act, 1947.


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