You cannot deduct Rs 40 k from employee salary
2) employee only gave a reference
3) file case of cheating under section 420 against recruitment agency
Recovery of financial loss by an employee?
One employee, asked our organization to pay Rs.40,000/- to a recruitment agency for 20 candidates selection and recruitment for our organization, saying his friend works there. Our company paid, and within 15 days, that employee resigned the job and the recruitment company is not giving any candidates at all. Our company is deciding to deduct that amount in his salary. Can we do? Or how we can recover it?
Asked 1 year ago in Business Law
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11 Answers
We sat with the employee and told him, that we haven’t worked with this agency, and since you say your friend works there, we told him, we will hold you responsible for the money, for which he accepted. infact, he went to meet with the agency after this meeting and asked us to transfer the amount. When he has accepted he is responsible, can’t we ask him pay for the loss? If so, please advise in what way?
Asked 1 year ago
Ask employee to give in writing that Rs 40 k paid to recruitment agency be adjusted against his salary
If he has given you any written undertaking to do so then you can deduct otherwise you can’t. The process is to file recovery suit
You can deduct. Is there any written communication with this regard with your employee ?
Legally the employee is not liable to make the good the loss suffered, you have remedy against the recruitment agency. Issue a lawyer's notice seeking refund with interest. File a complaint in District Consumer Commission under new Consumer Protection Act, 2019. Your get refund with interest, cost of complaint, compensation for mental harassment and lawyer's fee.
You have to taking in writing such conditions and make him responsible for this act. and ask him to get refund 40K from that company otherwise you can give his full n final settlement in cash and take his signature as received whole amount and immediately take 40K there N then.
Please obtain a letter from that employee admitting his fault and asking you to recover the loss from his salary. Once done, you may very well do so.
The company has not paid the employee but the amount the company paid is to a recruiting agency, then the employee cannot be held liable for this mishap.
How can the company go ahead with the suggestion made by an employee.
The company is not an individual, it is an entity hence it cannot take such decisions without analysing the factors.
If someone has cheated the company then the company can take action against the cheater as per due process of law.
The employee cannot be penalised for a third party's crime.
Deduction of salary from the employee's settlement would become an offence on the side of the company and the employee can sue the company for this.
The employee is not an authority, hence it is the fault of the company to take any decision to pay a third party without verifying the facts or details.
The company has taken a decision in a hasty manner but when the problem arises it is looking for someone to be blamed of making the employee a scapegoat.
The employee has neither entered into an agreement nor had witnessed any agreement nor stood guarantee for the agreement between the company and the third party.
It will back fire and your company may get into more troubles if you take any action agaisnt the employee in this regard, instead look for some legal ways to recover the amount
Dear client,
If the employee requested the payment to the recruitment agency and represented that his friend works there, then it is reasonable for the company to rely on that representation and make the payment. However, since the employee resigned after 15 days and the recruitment agency did not provide any candidates, it is appropriate for the company to take action to recover the payment made to the recruitment agency.
If the employee has agreed to be responsible for the payment, then the company may have a legal basis to recover the amount paid to the recruitment agency. You should consult with a lawyer who specializes in employment law to understand the legal options available to you in your specific circumstances.
In addition to legal action, you may also consider negotiating with the employee to reach a settlement for the repayment of the amount paid to the recruitment agency. This could include discussing a repayment plan or other mutually agreeable terms.
It is important to note that any action taken by the company should be based on a careful analysis of the facts and legal considerations, to ensure that the company does not engage in any illegal or unethical practices.
He has an option to repudiate that he didn't introduce you to the agency. If he agrees to pay 40k, then take an undertaking in writing. If you recover from his salary without putting him on notice, then he has an option to to sue you.
Regards
G.Rajaganapathy
