PF payment to an ex-employee
I run a gifting company (Proprietorship)
Established in 2007 in New Delhi.
Never had more than 5 employees at any point of time throughout existence.
I moved to Mumbai in 2011 (because of marriage). I continued my Delhi office until August 2013. I was forced to shut down the office in Delhi and set up in Mumbai because business was not doing well and operational costs of running the Delhi office were too high.
I informed my employees a month before I took this decision. One of the employees, Mr X, has now sent me a legal notice demanding 3 months salary and PF payment.
Mr X was hired in 2007 at a salary of Rs.8000 per month. When I informed him of my decision to shut the Delhi office, he quit in 10 days. He was then earning Rs.22000 per month (August 2013). I settled all his dues before he left.
He has today sent me a legal notice claiming 3 months salary (which he claims I promised as a notice period) and PF payment.
I am confused if I have to pay him anything. Please guide me.
Asked 3 years ago in Business Law from Mumbai, Maharashtra
Thank you Sandeep - appreciate your advise.
You're right - I haven't made any deductions from his salary towards PF.
About the notice period, fortunately/unfortunately, there is no documentation towards an employment agreement/contract or resignation or relieving letter. All communication has been oral. How does this affect me?
And yes, I will now reply to his advocate based on your advise. Since I am in a different city than his advocate, what is the best form of communication you advise? (speed post / registered post etc)
Asked 3 years ago
As employee strength was just five, it was not necessary for you to register for PF Account. I assume that you have not deducted money from his salary towards PF. In such case you need not worry about PF claim.
With regard to the payment in lieu of 3 months Notice period, one need to review the clauses of the employment agreement, resignation letter, relieving letter and other related communication relating to his exit carefully to come to the conclusion.
You have to reply to his legal notice rebutting all his claims.
Send Legal reply through R.P.A.D.