Non-payment of salary to the employees by their employers is very common in India, especially when they fire employees. However, very few employees have little legal knowledge and are aware of their rights under the Indian Constitution and statutes, so they can't file a case against their employer.
As per the Contract Labour Act, under Section 21, the employer will be responsible for payment for his/her every employee. According to the provisions of the Model Act, "Where any worker is required to work on any day above nine hours and forty-eight hours in a week, he shall be entitled to wages at the rate of twice his ordinary rate of wages or such higher amount as may be prescribed."
If the employer doesn't follow any provisions of the Act or rules, they will have to pay around Rs. 2 Lakhs. Meanwhile, the Minimum Wages Act, 1948 and the Payment of Wages Act, 1936 are the two crucial legislations that govern and regulate wages paid to the employee by the employer. While the former Act is known to fix the minimum wage in a guaranteed amount to all workers, the latter guarantees payment on time.
On the other hand, Section 33C of the Industrial Disputes Act works to recover money that is due and will be paid to the employee. As per this, an employee can apply for non-payment to the respective government. Being satisfied, the appropriate government will issue a certificate for due payment.
A copy of the employment contract. A copy of the bank statement will be shown as evidence of non-payment of salary, the appointment letter, and the details of all additional benefits and perks.
Meanwhile, if the employer does not reply to this notice and does not pay the dues, the following steps can be taken.
The employee can go to the labour commissioner and share the commissioner's issue while giving all the documents attached to the complaint file. While he must solve the problem, if he fails, the employee can go to the labour court for the non-payment issue. Notably, the Labour Court will get three months to decide it.
On the other hand, an executive employee or having a managerial post can file a suit in a civil court for non-payment of salary. However, the 2016 Insolvency and Bankruptcy Code refer to employees as operational creditors, and they can file an application in the NCLT for the recovery of the due payment.
The applicant should be an employee of the company, and the minimum amount of due payment should be Rs. 1 Lakh, whereas the maximum unpaid salary should be Rs. 1 crore. NCLT will get 14 days to accept or reject this, whereas the resolution process could have finished within 180 days.