employee taken legal action on company for non paid wages

760 votes

Under Indian labour law, earned wages cannot be withheld merely because the employee failed to complete handover; non-payment of salary for work done can be challenged under the Payment of Wages Act, 1936 or before the Labour Commissioner. The company should immediately review the employment contract for notice period, handover, and recovery clauses, and gather all documents such as appointment letter, emails, project records, and full & final settlement details. While salary already earned is generally payable, if the employee breached contractual obligations and caused quantifiable loss, the company may defend the claim and, if evidence is strong, file a civil claim for damages or counter-claim as per law. The exact remedy will depend on whether the employee qualifies as a “workman” under the Industrial Disputes Act, 1947 or was in a managerial position.

Advocate Sumegh Garg LawRato

823 votes

Since you mentioned the company suffered a loss because the code was not provided, you have grounds to file a counter-claim for damages. The company should not merely defend the non-payment of the one-month salary but should actively highlight the breach of the employment contract. You must state that the salary was withheld as a consequence of the employee's failure to fulfill their contractual obligations.

Advocate Madhav Shankar LawRato