Legal Question in Employment Law in India

We have this employee who was the petty cash custodian, he has not been doing a proper recording for all the incoming and outgoing petty cash transactions. And at the time of his resignation, he has owed the company a total of INR400k. The company has withhold his salary during his departure, and is planning to deduct the accountability of INR400k owing from his salary.

Question: May we know is this allow in India Labour & Employment law? If otherwise, how else can the company get back the fund from him?


Asked on 2/23/16, 7:17 am

2 Answers from Attorneys
Fca Prashant Chavan Expert Edge LLP

23.02.2016

Dear Sir / Madam,

An independent investigation report by the auditor into the matter is advisable and recommended and the Company to act accordingly.

Regards,

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Answered on 2/23/16, 7:28 am
Vivek Mapara Vivek N. Mapara

Sir

What does the Employment Agreement postulate in regards to lien over the salary of the Employee or appropriation of any claim of the Employer from the outstanding Salary of the Employee.

Subject to such Agreement, there is no embargo or any affirmative legislation which restrains an Employer from deducting or appropriating his claim from the outstanding Salary of the Employee.

This answer is only in relation to outstanding Salary. Whether such deduction is permissible under Provident Fund, Gratuity amount etc. is a different question.

So answer to your question is YES, you can recover such amount from the outstanding salary of the Employee.

Regards

Vivek N Mapara

www.vnmlaws.com

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Answered on 2/24/16, 2:40 am


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