A detailed look into non payment of salaries and the legal options that employees or ex employees have, and also legal requirements to give them the best possible chance of obtaining justice effectively, if they have been deprived their salary or full and final settlement etc.
Labour Courts in India are specialized judicial bodies that
adjudicate disputes related to employment and labour matters. They operate
under the framework of the Industrial Disputes Act, 1947, and are designed to
resolve conflicts between employers and employees efficiently and judiciously.
Establishment and Jurisdiction
Labour Courts are
established by state governments or authorized authorities under the Industrial
Disputes Act.
They generally have
jurisdiction over disputes related to:
Termination of services
Nonpayment or delayed payment of wages
Breach of employment contracts
Disputes over wages, benefits, or working
conditions
The jurisdiction
varies depending on the nature of the dispute and the employment sector
(industrial, establishment based, etc.).
Procedure
1. Filing of Disputes:
Disputes are initiated by workers or employers
through a written (not verbal, it has to be written with the necessary details
of the offence committed against the employee mentioned) complaint or
application.
Usually, disputes are first attempted to be
resolved through conciliation or arbitration before approaching Labour Courts.
2. Conciliation:
Before formal adjudication, efforts are made
for conciliation by the Labour Department to settle disputes amicably.
3. Adjudication:
If conciliation fails, the dispute proceeds to
the Labour Court.
The Court conducts hearings, examines
evidence, and hears witnesses.
Both parties are given an opportunity to
present their case.
4. Decision:
After evaluating the evidence and arguments,
the Court issues a decision or award.
The decision is binding and enforceable.
5. Appeal:
Decisions by Labour Courts can typically be
appealed to higher judicial forums like the Labour Appellate Tribunal or High
Courts.
Functions
Adjudicate industrial
disputes
Interpret and enforce
labour laws
Issue awards and
orders to resolve disputes
Protect workers’
rights and ensure fair labour practices
Purpose of Labour Courts in India
To provide a specialized and speedy forum for
resolving industrial disputes between workers and employers, thereby minimizing
disruptions in industrial relations.
2. Protection of Labour Rights:
To safeguard workers’ rights related to wages,
employment conditions, and job security.
3. Enforcement of Labour Laws:
To ensure compliance with labour legislation,
including the Payment of Wages Act, Industrial Disputes Act, Contract Labour
Act, etc.
4. Maintaining Industrial Peace:
To promote harmonious employer employee relations by providing an impartial
mechanism for dispute settlement.
5. Legal Enforcement:
To enforce awards and decisions that uphold
labour standards and justice.
6. Promoting Social Justice:
To ensure fair treatment of workers,
especially in vulnerable employment sectors.
In India, employees or ex-employees (former employees) who
have not received their dues—such as wages, gratuity, retrenchment benefits, or
other employment related payments—have legal option under various labour laws
and can initiate action against their employer. Here is a comprehensive
overview of the rights, legal provisions, and procedures involved:
Legal Option for
Employees/Ex Employees for Non Payment of Dues in India
1. Relevant Labour
Laws and Statutes
Depending on the nature of dues, different laws may apply:
The Payment of Wages
Act, 1936: For nonpayment or delayed payment of wages.
The Industrial
Disputes Act, 1947: For disputes related to layoffs, retrenchment, or nonpayment
of dues arising from employment termination.
The Payment of Bonus
Act, 1965: For nonpayment of bonus.
The Payment of
Gratuity Act, 1972: For non-disbursement of gratuity.
The Employees’
Provident Funds and Miscellaneous Provisions Act, 1952: For nonpayment of
provident fund dues.
The Shops and
Establishments Act (varying by state): For wages and benefits.
The Contract Labour
(Regulation and Abolition) Act, 1970: For contractual workers' dues.
The Code on Social
Security, 2020 (which consolidates many existing laws): For social security related
dues.
2. Who Can Take
Action?
Employees or Ex Employees:
Any worker who has not received their lawful dues.
Legal Representatives:
In case of death of the employee, their legal heirs or representatives can
initiate proceedings.
3. The Process to
Take Action
Step 1: Attempt to
Resolve Informally
Direct Negotiation:
Contact the employer or HR department for settlement.
Written Complaint:
Submit a formal complaint or demand letter requesting dues.
Step 2: Approach
Labour Authorities
If informal efforts fail, the employee can escalate the
matter:
Filing a Complaint
with the Labour Department:
Most states have a Labour Commissioner or
Labour Officer responsible for enforcement.
The complaint should specify the dues owed,
employment details, and evidence.
Conciliation:
The Labour Department often arranges for
conciliation to settle disputes amicably.
If successful, a settlement agreement is
reached and enforced.
Step 3: Filing a
Claim before Labour Court, Industrial Tribunal, or Authority
If conciliation fails, the employee can:
File a Complaint with
Labour Court or Industrial Tribunal:
Under the Industrial Disputes Act, 1947, for
disputes related to wages, layoffs, retrenchment, or wrongful termination.
For wage related dues, the Payment of Wages
Act provides a mechanism for adjudication.
Application under the
Payment of Wages Act, 1936:
Employees can file claims before the Deputy
Labour Commissioner or Controlling Authority appointed under the Act.
The authority examines the claim and can order
the employer to pay dues.
Claims under the
Payment of Gratuity Act:
File a claim with the Controlling Authority
under the Act.
Claims under the
Employees’ Provident Funds Act:
File a complaint with the Regional Provident
Fund Commissioner (RPFC).
4. Legal Proceedings
and Enforcement
If the authorities or
courts find in favor of the employee:
An order or award is passed requiring the
employer to pay the dues.
The employer is legally bound to comply.
Enforcement Actions:
If the employer fails to pay, the employee
can:
Attach the employer's property or bank
accounts for recovery.
Initiate a recovery proceeding under the
relevant law.
Under the Industrial Disputes Act, the
government or employee can file an application for recovery of dues.
Legal Remedies:
If the employer still defaults, the employee
can approach the Labour Court or District Court for execution of the award or
order.
5. Special Provisions
and Additional Remedies
Filing a Complaint
with the National or State Consumer Disputes Redressal Commission:
If dues are linked to defective services or
products, though this is less common.
Criminal Proceedings:
In cases of fraud, cheating, or wilful nonpayment,
criminal charges can be filed under the Indian Penal Code (IPC) or under
specific labour laws. Please note that the Courts of Law function under the
principal of ‘Truth is established by evidence’, hence evidence must exist to
prove the reality of the matter. So, if you’re planning to go this route, you
need to have some of these things documented or in written communication, and
not just a verbal claim.
Technically claims unsupported by evidence of any kind
generally don’t go very far v/s counter claims supported by evidence. It is
important to note that employers (whether innocent or guilty) generally
document & maintain records of everything as a part of their normal
business activity, so employee claims of injustice should also be as well documented
as possible to stand against the counter claims of the employers.
6. Important Points
Time Limits:
Labour law claims often have specific statutes
of limitations (e.g., 3 years under the Payment of Wages Act).
Timely action is essential to avoid dismissal
of claims.
Evidence:
Maintain records of employment, wage slips,
notices, correspondence, and any agreements.
Legal Support:
Employees can seek assistance from Labour
Lawyers, Trade Unions, or Legal Aid Services.
7. Real World Systems
and Examples
Labour Department and
Labour Commissioners:
In states like Maharashtra, Delhi, Tamil Nadu,
etc., Labour Departments handle wage disputes and enforce labour laws.
For example, the Mumbai Labour Commissioner
handles wage claims under the Payment of Wages Act 1936.
Industrial Tribunals
and Labour Courts:
Function under the Industrial Disputes Act.
For instance, the Delhi Industrial Tribunal
adjudicates disputes related to dues.
Online Portals:
Some states have online systems for lodging
complaints, e.g., Maharashtra’s Labour Department portal.
The Ministry of Labour & Employment has
centralized portals for filing claims and accessing information.
Yes, under Indian labor laws, employees and ex-employees
can take legal action against employers failing to clear dues. The process
involves:
1. Initiating informal negotiations.
2. Filing complaints with the Labour Department.
3. Seeking adjudication before Labour Courts or Industrial
Tribunals.
4. Enforcing orders through recovery procedures if the
employer defaults.
These legal frameworks aim to protect workers’ rights and
ensure timely payment of dues through a structured, multitiered process
involving administrative authorities and judicial bodies.
Summary
Labor Courts in India are specialized judicial bodies
established to adjudicate disputes arising in industrial and employment
contexts. They function by conducting hearings, examining evidence, and issuing
binding decisions to resolve conflicts efficiently. Their primary purpose is to
promote just, fair, and harmonious industrial relations, protect workers’
rights, and ensure compliance with labor laws. These Labor Laws are relevant in
all parts of India, and workers rights are protected under the Law in various ways
to ensure a safe and fair working environment to workers and prevent various
forms of labor abuse.
