Now Your Company Can’t Hold Your Salary, Know Your Rights


For a very long time, we are told that an employee is asset for any Company. For a Company to grow and succeed, it requires keeping its Employees satisfied with all amenities, perks and salaries. But, is this TRUE?????

There are employees who get pissed off in several ways in their offices, be it mental harassment, sexual harassment, misanthropic attitude of other employees, or/and issues related to salary.

Today we will discuss on the most debated topic among any class of Employee i.e. “SALARY”.

In today’s era, if one would ask, what you would prefer among name, fame and money; then 70% of population would go with money. And it’s because money is hard to get amongst three.

Now a days, in many Companies a trend is going viral, called ‘Employee Turnover’. Employee turnover refers to the number or percentage of workers who leave an organization and are replaced by new employees. Measuring employee turnover can be helpful to employers that want to estimate the cost-to-hire for budget purposes. For a Company to be at its best, Employee turnover rate must be very low. But, is it right to hold salary of employee just for the sake of Company? Surprisingly, companies are holding salary for 3 months to 6 months, and in some cases even for a year. This creates a lot of muddle for an Employee.

Earlier, very little number of employees used to file case against their employers in civil courts, because this process used to take a lot of time and effort. So, in 2016 Government passed a new law i.e. “INSOLVENCY AND BANKRUPTCY CODE, 2016”.

INSOLVENCY AND BANKRUPTCY CODE is a Code, not any Act. It is a compilation of many other laws to create a single law for all those people who have been facing monetary troubles for a very long time. This Code was introduced with a motive to resolve cases quickly with best possible solution. It works in a time-bound procedure of 180 days which can be further extended up to 90 days.

Who can file Petition?

  1. Financial Creditors i.e. any person to whom a financial debt is owed.
  2. Operational Creditors i.e. any person to whom an operational debt is owed.
  3. Corporate Creditors i.e. Company Voluntary declares insolvency

In which category do employees fall?

Employees are treated as operational creditors under IBC.

An operational debt is defined under section 5(21) of the IBC to mean:

a claim in respect of the provisions of goods or services including employment or a debt in respect of the repayment of dues arising under any law for the time being in force and payable to the Central Government, any State Government or any local authority”

When can a petition be filed?

A petition can be filed as soon as there exists a default of Rs. 1, 00,000/- or more.

 How does it works?

Debt involving goods or services is referred to as Operational Creditors Category. At first step a demand notice is issued demanding the Corporate Debtor to pay unpaid amount within 10 days from the date of delivery of the notice. If, neither dispute nor amount has been received, and no proof of payment has been submitted by the Corporate Debtor within said days, then an application can be filed in NCLT for initiation of insolvency process after expiry of said period.

Once the case is admitted by the NCLT an Insolvency Professional is appointed and the power of Board vests in the Insolvency Professional.  IP prepares a Resolution Plan within 180 days after considering the realizable value from the assets of the Corporate Debtor and the amount that can be recovered for payment of dues of the Creditors. The resolution plan is then presented before the authorities, where the plan is either accepted or rejected. If it is rejected, then the company goes into liquidation.


So, now it’s time for transformation, from liability to an asset. And no more getting stuck into long and tedious procedure of Courts. Insolvency and Bankruptcy Code is a sure shot option.


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