You can pay them 15 days salary for each year of service, subject to certain minimum amount and certain maximum amount, which ever is less or more.
Compensation for teachers and servants
Greetings to Team Kaanoon, We had a small school in Bangalore, which we have shutdown this academic year due to less number of students and financial issues. Now comes the time of settling the teachers who have been with us for many years and also the servants who also have served for many years. The question is how do we settle / compensate them. We do not want to issue them a work experience letter as we did not give them an offer letter at the time of them joining the school, and someone told us that if we give them the experience letter, they can go to the labour court taking that and also our financial resources are constrained. Can we give them an experience letter stating that the school is shut so they cannot claim anything. How do we go about this and how much compensation is actually to be paid. Kindly advise.
Asked 10 years ago in Labour
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5 Answers
Either pay them 15 days salary for each completed year of service or 15 days salary for each left over year of servie, fixing certain minimum & maximum amount. You may also add the clause 'which ever is less or more' as per your financial constraints.
1. Was the school run by a charitable institution or was it run based on commercial objective,
2. Your issuing or not issuing appointment/experience letter does not matter at all in their claiming lawful compensation/dues which an employee is supposed to get in case an organisation is closed since it will not be difficult for them to prove in the appropriate court that you ran a school as commercial venture, if it is not run by a charitable organisation,
3. Settle the matter very amicably with the teachers & other employees since, if any of them lodges complaint at appropriate fora, you shall face numerous problems regarding payment of PF, Gratuity (depending on the service period), minimum salary etc,
4. Take extreme care on the matter.
Thanks for the reply Sir. The school was run by a charitable institution, a public charitable trust managed the school. I request the advocates to please clarify this doubt of mine - We do not want to issue them a work experience letter as we did not give them an offer letter at the time of them joining the school, and someone told us that if we give them the experience letter, they can go to the labour court taking that. Is this true, can the work experience letter land us into trouble?
Asked 10 years ago
Another question of mine and this time it is for Mr. Shashidhar S. Sastry. Sir you have mentioned in your reply - "We can pay them 15 days salary for each year of service, subject to certain minimum amount and certain maximum amount." What is this certain minimum amount and certain maximum amount, please clarify.
Asked 10 years ago
1. You have opene a school for which you have engaged employees as teachers &/or support staff,
2. You have not issued applointment letter to them,
3. Do not they have enough evidence in support of their claim as your employee?
4. So, otherwise also they can take you to Court claiming them to be employees,
5. You can issue them experience certificate to settle the matter amicably & in the said certificate you can tactfully mention their services as Voluntary.
That minimum amount may start from Rs.5000/- to 15000/- and maximum amount may be Rs.35000/- to 60000/- and it depends on the number of years of service, cadre in which served etc.. You can issue experience letter stating that the service was voluntary.