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Overview of Legal Notice For Non-Payment of Salary

The first step for initiating a legal process is serving legal notice to the opposite party who has done an act or abstained from doing an act which was required to be performed. A notice is sent as a warning to the opposite party of the intentions of the sender about filing a lawsuit before the competent court in case the opposite party fails to comply with the desired remedy mentioned in the legal notice.

In the case of the legal notice being sent for non-payment of salary, the aggrieved employee has the right to send legal notice to the employer by mentioning all the facts and the cause of action that led to serving of legal notice. A notice gives an idea about the reason for the aggrieved party must send the notice to the defendant.

It contains the allegations that have been levied on the defendant and what remedy has been sought by the plaintiff. It helps parties to resolve the matter before approaching the court and saves money and time. A person can send legal notice to another person as per Section 80 of the Code of Civil Procedure of 1908. It is sent only when the nature of the matter is civil. A person should approach an advocate to get a legal notice drafted.

Reliefs that can be claimed in the legal notice

The reliefs that can be claimed by the employee through legal notice are as follows:

  • The amount of salary which is due and not paid and
  • The interest payment on the due salary for the delay in payment of salary, if any.

Acts governing the salary payment by organizations

Following are the various Acts governing the salary payment by organisations:

Contract Labor (Regulation and Abolition) Act

The Contractor is under an obligation to pay the wages to the workers working under him/her for the work performed under the contract of labour as defined under Section 21 of the Contract Labor Act. The contractor shall pay the workers the due amount before the expiry of the term of the contract or any period specified in the contract.

If the contractor does not make the payment of wages that have become due, then the principal employer for whom the contractor has hired the workers will be under an obligation for making payment to workers. After the principal employer has paid the due wages to the workers on behalf of the contractor, the employer will be entitled to recover the amount paid from the contractor.

Shops and Establishment Act, 1953

Several states have their own laws with regard to the conduct of shops and establishments situated in that particular state. As per the sections of the Model Act, a worker is eligible to receive wages at the rate which is twice his ordinary wages or a higher amount if such worker works for more than 9 hours a day or 48 hours a week.

Under this Act, an employer is punishable up to a fine of Rs.2 lakh in case the employer does not pay the due salary to his/her employees.

Wages Act

The two major laws that have been enacted in India to govern and regulate the payment of wages to employees by the employer are the Minimum Wages Act of 1948 and the Payment of Wages Act of 1936. The Minimum Wages Act contains provisions with regard to the fixation of an amount as minimum wage that should be paid to all employees without any discrimination. The minimum wages fixed for workers vary from state to state depending on the factors affecting labour.

The Payment of Wages Act of 1936 ensures that workers get timely payment of wages.

Industrial Disputes Act

It is one of the important Acts which has been enacted for the betterment of workers and employees. The Act has a separate provision for recovery of due salary. Section 33C of the said Act states the method by which an employee can recover the due salary. As per this Act, any employee or a person authorized by him/her can file an application before the appropriate government for payment of salary. The appropriate government will inspect the application. After the government has been satisfied and finds that the employer needs to pay the due amount, the government shall issue a certificate to the employer for payment of a due amount to the employee.

If a need to calculate the amount of due wages arises, the competent court will have the authority to calculate the amount to be paid.

Documents required to serve a legal notice for non-payment of salary

There are certain Documents which are required to be submitted by an aggrieved party if he/she wishes to serve a legal notice for non-payment of salary to the employer. These Documents are as follows:

  • The appointment letter received by the employee,
  • All information related to benefits and perks being provided to the employee,
  • A copy of the employment contract between the employer and the employee, and
  • A copy of the bank statement as evidence stating that the employee has not been paid on the date decided.

Procedure to be followed

The aggrieved must follow the procedure for drafting and sending the legal notice to the employer who has defaulted in making the payment of due wages. It is as follows:

  • The first step is to find an advocate who has expertise in dealing with matters related to employment and laws related to labour.
  • The aggrieved party must provide each and every piece of information about the non-payment of due salary to the advocate so that he/she can have the complete information required for drafting the notice.
  • After the advocate drafts the notice, he/she must show the notice to the aggrieved party to review the matter stated in the notice.
  • After the aggrieved party considers the draft correct. The advocate can send the notice either through registered post or courier.

What should a legal notice for non-payment of salary cover?

The draftsman must keep certain things in mind while drafting the legal notice for non-payment of salary. These are as follows:

  • It is the responsibility of the advocate to draft the notice on the letterhead of the advocate along with the contact details and address of the advocate.
  • The date on which such notice is being sent to the employer must be mentioned at the beginning of the notice.
  • It is mandatory to mention the name, address and contact number of the employer to whom such notice is being issued.
  • As the notice is being sent by the advocate on behalf of the aggrieved party, it is also essential to mention the name, address and contact details of the aggrieved party as well.
  • The advocate while drafting the notice must focus on explaining how the right of the employee got infringed. The remedy to be sought must also be mentioned.
  • There must be a statement in the notice mentioning a defined time period under which the opposite party is required to perform the necessary task.
  • The notice must be mandatorily signed by both the advocate and the client.

The limitation period for legal notice for non-payment of salary

A person who has been aggrieved is allowed to file a suit for recovery of the due amount within the limitation time period of 3 years.

Other options available to the employee

Whenever an employer receives a legal notice, he/she does not fear taking the matter to court and thus does not reply to the notice or does not pay the salary as mentioned in the notice.

The laws in India have provided other remedies to an employee for recovering the unpaid and due salary. Under this, strict action against an employer can be taken with the help of the legal system. The other options available are as follows:

  • Appointing an Arbitrator: If the employee’s contract contains an arbitration clause or an additional arbitration agreement, parties to the contract can resolve the matter related to non-payment of salary with the help of an arbitrator. The arbitrator will help in resolving the matter amicably. It is one of the effective methods of dispute resolution where parties are not required to go to the court for resolution of the dispute.
  • Seeking help from Labour Commissioner: If the employment contract does not contain an arbitration clause or any other specified means for the resolution of the dispute between parties, then the aggrieved party has the right to approach the labour commission of the district to seek the assistance from the labour commission for recovery of the due amount.
  • Filing a petition in labour court: An aggrieved person can approach the labour court by filing a petition before it to seek the payment of unpaid and due salary as per the rules and regulations specified under the Industrial Dispute Act.
  • An employee who has not been paid can approach the Registrar of Companies requesting the registrar to take action against the company that is not paying the due salary if the opposite party is a company.

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