An employment relationship is a legal link between an employer and employee. It exists when a person performs work or services under certain conditions in return for remuneration. Through this relationship, an employee gains access to the rights and benefits associated with his or her employment. These benefits relate to labour laws and social security. This relationship is the condition that determines the application of the labour law and social security provisions addressed to employees. One of your rights as an employee is to receive remuneration for your services to the employer. But, sometimes there might be situations where your employer does not pay you the salary on time or doesn’t pay it at all.
So, what do you do in such a situation? Is a lawsuit the only way or there is another way around it? Read on to find out.
How does an employer-employee relationship come into existence?
It comes into existence through an employment contract.
An employment contract is an agreement which sets out the rights and responsibilities of the employer as well as the employee.
An employment contract is the origin of your employer-employee relationship. It contains specific clauses in relation to remuneration. Before signing an employment contract, it is important to refer to all the terms and conditions of the contract.
This contract will form the basis of your entire relationship with the employer. So, make sure to read it in detail. Even if any disputes in relation to remuneration arise, the contract will be your go-to document before initiating any action.
What remedies do I have if my employer does not pay me?
There are sufficient chances of presence of an ‘Arbitration Clause’ in an employment contract. One must always attempt to arrive at a solution through arbitration and conciliation before persuading a trial.
If things don’t go well, the aggrieved employee can bring a legal action against the employer.
The Department of Labour has provisions which allow employees to bring a lawsuit to recover back wages owed. An employee may bring a private lawsuit. He can also obtain an injunction to restrain an employer from violating the provisions of the Labour Law.
An employee can first file a complaint with the labour office. Depending on the nature of the organization, the employee can contact the following offices.
So, the course of action will take the following route.
- Serve the employer with a Legal Notice.
- Seek enforcement based on clauses of the agreement.
- Initiate civil suit seeking specific performance of the contract as well as damages.
What legal remedy do I have if my employer does not pay me?
If your employer does not pay you, you can bring a legal action under the following laws:
The Payment of Wages Act, 1936
Section 3 of the Act makes the employer responsible for payment of wages to persons employed by him of all wages required to be paid under this Act.
Section 15 provides for recovery of claims arising out of deductions from wages or delay in payment of wages. It also provides for a penalty for malicious or vexatious claims.
Code of Civil Procedure (CPC), 1908
A person can file a summary suit under the CPC. This was affirmed by the Delhi High court in a 2013 judgment.
The Industrial Disputes Act, 1947
An employee can file a suit under this Act for recovery of money due from an employer.
It has been a long-standing judgment. An employee can approach the labour court for recovery of money or any benefit due to him from the employer. There is only one condition. The benefit should either be a pre-existing one or flow from a pre-existing right.
Companies Act, 2013
An employee can file a suit under Act. It lays down the punishment for fraud. The penalty includes a term of imprisonment as well as fine.
So, it is evident that there is a whole lot of remedies available in case your employer does not pay you.
However, if your employer does not pay you, it is better to go and talk to the employer first.
If things still don’t work out, then legal recourse is always available.
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