If you are stuck in such a situation, here is what to do.

Ms. Kavita, a 21-year-old software developer working at a tech startup named “Innovatech Solutions Pvt. Ltd.” in the city of Vikaspuri, found herself in a distressing situation. After facing a significant delay in receiving her salary for the month of April, which was finally credited in mid-July, her employment with the company came to an end. However, the company then withheld her final 15 days’ salary for the month of May.

The reason cited by the company was that she had damaged a company laptop. Kavita acknowledged that her water bottle had accidentally leaked in her bag, causing some damage to the device. However, she was never given any prior written notice, a chance to explain, or any official communication about a deduction from her salary for this damage. The company only brought it up after her termination as a reason to withhold her final pay.

Feeling wronged, Kavita filed a complaint with the local Labour Commission office. Shortly after, she received an email with an attached notice from the Deputy Commissioner of Labour, summoning both her and a representative from Innovatech Solutions for a hearing in two days. This notice left her feeling anxious and scared. While the amount was not substantial, she felt it was a matter of principle. She worried about the legal process being long and mentally taxing, and feared potential corruption or being unfairly forced to pay for the laptop.

Advice in such cases

• Gather all your documents. This includes your appointment letter, any communication regarding salary, the termination letter, and the notice from the Labour Commissioner.
• Do not ignore the notice for the hearing. Your attendance is crucial. The first hearing is typically a conciliation meeting where the officer tries to mediate a settlement.
• Understand that an employer cannot arbitrarily deduct from your salary for alleged damages without following a proper procedure. They must prove that the damage was due to your direct negligence and give you a fair chance to present your side.
• Consult with a Lawyer: The very basic and important step to start is to talk to a lawyer/advocate. You should not hesitate in paying his consultation fee, which might be in the range of Rs. 10,000 to Rs. 50,000, depending on the case. He is helping you in this situation to come out. He is an expert in the domain and can help you explain the procedure, which you might have never explored. A good lawyer can get the issues resolved much faster than you think.

Applicable Sections of Law

This situation is primarily governed by the Code on Wages, 2019, which consolidates laws relating to wages and their payment.

• Section 18 of the Code on Wages, 2019: This section outlines the permissible deductions from an employee’s wages. A deduction for damage to or loss of company property is allowed only if the damage is directly attributable to the employee’s neglect or default. The employer must give the employee an opportunity to show cause against the deduction before it is made.
• Limits on Deductions: The amount of deduction cannot exceed the actual value of the damage or loss caused. Furthermore, the total deductions from wages in any given wage period cannot exceed 50% of the total wages. Unilaterally withholding the entire final salary is illegal.

If you are the complainant

• Consult with a Lawyer: The very basic and important step to start is to talk to a lawyer/advocate. You should not hesitate in paying his consultation fee, which might be in the range of Rs. 10,000 to Rs. 50,000, depending on the case. He is helping you in this situation to come out. He is an expert in the domain and can help you explain the procedure, which you might have never explored. A good lawyer can get the issues resolved much faster than you think.
• Prepare a clear, chronological summary of events. Note down the date your salary was due, when it was paid (if at all), the date of termination, and all communications regarding the withheld salary and the laptop damage.
• Attend the hearing confidently. Present your documents and explain that the deduction was made without following the due process required by law.
• The Labour Commissioner’s role in the initial stage is that of a conciliator. Be open to a reasonable settlement but do not feel pressured into accepting an unfair offer.

If you are the victim

• Receiving a legal notice is a formal step in the dispute resolution process. It is an opportunity for you to officially present your case. Do not be intimidated by it.
• Consult with a Lawyer: The very basic and important step to start is to talk to a lawyer/advocate. You should not hesitate in paying his consultation fee, which might be in the range of Rs. 10,000 to Rs. 50,000, depending on the case. He is helping you in this situation to come out. He is an expert in the domain and can help you explain the procedure, which you might have never explored. A good lawyer can get the issues resolved much faster than you think.
• Your primary argument is the violation of legal procedure by the employer. They cannot act as the judge, jury, and executioner by deciding you are at fault and imposing a ‘fine’ by withholding your salary without a fair inquiry.
• Keep a calm and professional demeanor during the proceedings. Stick to the facts of your case.

How the police behave in such cases

The police have no jurisdiction in such cases. This is a labour dispute, which is civil in nature. The matter falls under the purview of the Labour Commissioner and Labour Courts. The police would only get involved if there were elements of a criminal offense like criminal intimidation, cheating, or theft, which is not the case in a simple salary dispute.

FAQs people normally have

What evidence is required?

• Your appointment letter or employment agreement.
• Bank statements showing the non-payment or delayed payment of salary.
• Salary slips.
• Any email, text message, or written correspondence with the employer regarding your salary and the alleged damage to the property.
• The notice you received from the Deputy Commissioner of Labour.
• Your resignation or termination letter.

How long will the investigation take?

The process begins with a conciliation hearing, which is usually scheduled quickly, as seen in Kavita’s case. The goal of this hearing is to reach a quick settlement. If both parties agree, the matter can be resolved in a single day. If no settlement is reached, the conciliator may hold a few more meetings. If conciliation fails, the matter can then be referred for formal adjudication to a Labour Court, which is a longer process and can take several months to over a year to conclude.

Advocate Sudhir Rao, Supreme Court of India