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

Mr. Alok Verma resigned from his position at Innovatech Solutions Pvt. Ltd. a few months ago. The resignation was prompted by persistent mental harassment from a senior manager. He communicated his decision to his reporting manager, stating that he was prepared to serve the full three-month notice period. However, since there were no active projects for him, his manager proposed an early release after just a few weeks, an offer Mr. Verma accepted.

During this transition, the Human Resources department repeatedly questioned whether the early release was his request or the company’s decision. Mr. Verma clarified the situation each time. On his last working day, the same question arose. He stood firm, stating he would not complete his exit formalities until this was clarified in his favour. By the afternoon, the company confirmed that they would pay for the remainder of the notice period. While they refused to provide this in a formal written letter, the confirmation was updated in the company’s internal HR portal. Trusting this, Mr. Verma took a screenshot as evidence before leaving.

After the standard 45-day processing period, he received his full and final (F&F) settlement statement, but it was missing the payment for the notice period buyout. He immediately emailed the HR department, attaching the screenshot and requesting a correction. Since then, despite numerous follow-up emails and calls, the company has failed to resolve the issue. Now, well over three months have passed since his last day. When he recently warned them of potential legal action, they simply asked him to “wait one more week.” Feeling stuck and uncertain, Mr. Verma is now considering his legal options to claim his rightful dues.

Advice in such cases

Navigating a dispute over a full and final settlement can be stressful. Here are the steps you should consider taking:

• Organize All Documentation: Gather all relevant documents, including your appointment letter, resignation email, all correspondence with HR and your manager, salary slips, and most importantly, the screenshot or any other proof of the settlement agreement.
• Send a Formal Written Reminder: Draft a final, formal email to the HR department and senior management. Clearly state the facts, reference previous communications, attach your evidence, and specify a final deadline (e.g., 7-10 working days) for the payment to be credited. State that failure to comply will compel you to seek legal recourse.
• Consult with Lawyer: The very basic and important step to start is talk to Lawyer / advocate. You should not hesitate in paying his consultation fee i.e. might be in range of Rs. 10,000 to 50,000 depends case to case. He is helping you in this situation of come out. He is 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.
• Send a Legal Notice: If the company fails to respond or pay by the deadline, your lawyer will draft and send a formal legal notice. This official communication often prompts companies to settle the matter to avoid litigation.
• Approach the Labour Commissioner: You can file a complaint with the office of the Labour Commissioner in your jurisdiction. They are empowered to mediate and resolve such disputes related to unpaid wages and settlements.

Applicable Sections of Law

Several laws in India protect an employee’s right to timely payment of their final dues. The legal framework has been updated, and it’s important to be aware of the new codes:

• The Code on Wages, 2019: This is the primary legislation governing wage payments. Section 17(2) of the Code is crucial, as it mandates that the wages payable to an employee who has resigned must be paid within two working days of their last working day. The F&F settlement, which includes unpaid salary, notice period pay, leave encashment, etc., falls under the definition of “wages.”
• The Industrial Relations Code, 2020: This code provides mechanisms for the resolution of industrial disputes, which can include disputes over final settlements.
• State-Specific Shops and Establishment Acts: Many states have their own laws that regulate payment of wages and conditions of work, which can also be invoked.
• Bharatiya Nyaya Sanhita (BNS), 2023: In cases where there is clear evidence of dishonest intention and deception from the employer’s side, provisions related to cheating (Section 318 of BNS) or criminal breach of trust (Section 316 of BNS) could potentially apply. However, salary disputes are typically treated as civil matters unless a strong criminal element is proven.

If you are the complainant

As the person initiating the action (the complainant), you need to be proactive and systematic:

• Maintain a Clear Record: Keep a chronological file of all communications and documents. This will be essential for your lawyer and for any legal proceedings.
• Act Promptly: Do not let an excessive amount of time pass. Delays can sometimes weaken your position.
• Follow the Procedure: Start with formal communication, followed by a legal notice, and then escalate to the Labour Commissioner or a civil court if necessary. This structured approach shows that you have made reasonable attempts to resolve the issue amicably.
• Consult with Lawyer: The very basic and important step to start is talk to Lawyer / advocate. You should not hesitate in paying his consultation fee i.e. might be in range of Rs. 10,000 to 50,000 depends case to case. He is helping you in this situation of come out. He is 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.

If you are the victim

If you find yourself in this situation as the aggrieved employee (the victim), your focus should be on securing your rightful dues efficiently:

• Do Not Rely on Verbal Assurances: As seen in the case, verbal promises from HR or managers are often unreliable. Always insist on written confirmation via email or an official letter. If they only update an internal system, take a clear, dated screenshot.
• Be Persistent but Professional: In your follow-ups, maintain a professional tone. Clearly state the facts and your expectations without getting emotional or aggressive.
• Understand Your Rights: Familiarize yourself with the basics of the Code on Wages, 2019, so you can confidently state that the company is in violation of statutory timelines.
• Consult with Lawyer: The very basic and important step to start is talk to Lawyer / advocate. You should not hesitate in paying his consultation fee i.e. might be in range of Rs. 10,000 to 50,000 depends case to case. He is helping you in this situation of come out. He is 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.

How the police behave in such cases

Approaching the police for a salary or F&F dispute is generally not the primary course of action. Police are primarily responsible for investigating criminal offenses. In such cases:

• Initial Reluctance: The police will likely view the matter as a civil dispute or a labour issue, not a criminal one. They may be reluctant to file a First Information Report (FIR) and will probably advise you to approach the Labour Commissioner or file a civil suit for recovery of money.
• When Police Might Intervene: Police involvement becomes more plausible if you can provide strong evidence of criminal intent, such as forgery of documents, fraud, or a clear case of cheating as defined under Section 318 of the BNS. Simply delaying payment is usually not sufficient to trigger a criminal investigation.
• Complaint Registration: At most, they might register a formal complaint (not an FIR) and summon the employer for a discussion, but their power to enforce payment is limited without a court order.

FAQs people normally have

What evidence is required?

Strong evidence is the backbone of your claim. You should have the following:

• Your appointment letter, which outlines your salary and notice period terms.
• Your resignation email and the company’s acknowledgment of it.
• All email correspondence with HR and your manager regarding the early release and notice period buyout.
• The screenshot of the company’s internal tool confirming the payment commitment.
• The incorrect F&F statement sent by the company.
• Bank statements showing your previous salary credits.
• Any other written communication that supports your claim.

How long will the investigation take?

The timeline for resolution can vary significantly based on the path you choose:

• Legal Notice: Typically, a legal notice gives the employer 15 to 30 days to respond or settle the claim. Many cases are resolved at this stage.
• Labour Commissioner: Proceedings before the Labour Commissioner can take a few months, depending on the complexity of the case and the cooperation of the employer.
• Civil Court: If the matter goes to a civil court for a recovery suit, the process can be lengthy, potentially taking anywhere from several months to a few years to reach a final judgment.

Advocate Sudhir Rao, Supreme Court of India