Internal Management Correspondence Cannot Override Terms Of Employee's Signed Salary Restructuring Letter: Delhi High Court
The Delhi High Court has held that internal management correspondence cannot override the express terms of a signed salary restructuring letter, while dismissing a former employee's appeal seeking recovery of alleged deferred salary and compensation bonus from her erstwhile employer.
Justice Neena Bansal Krishna upheld dismissal of the recovery suit filed by the former employee, holding that she failed to establish any legally enforceable promise by the company to repay the reduced portion of her salary or pay a compensation bonus.
The bench referred to a letter issued by the Defendant Company, which was signed by the Appellant, which was “completely silent” on any deferment of salary or on any obligation undertaken by the Defendant Company to repay the reduced component of salary at a future date.
Appellant had placed reliance upon the e-mail addressed by the CEO of the Defendant Company to the Vice President HR, which uses the terminology "deferred salary".
However, the Court noted, the said e-mail was an “internal management communication”, not addressed to or signed by the Appellant.
Briefly put, Appellant had joined the respondent company in 1993 and resigned in July 2004. She claimed that during the financial year 2002-03, the company, citing financial difficulties, had deferred a portion of the salaries of senior employees on the assurance that the deferred amount would be repaid from April 1, 2003, along with a bonus equivalent to one month's salary.
She sought recovery of Rs.3.10 lakh towards the alleged deferred salary and bonus, besides interest and terminal dues.
The company, however, contended that there had been no deferment of salary, but only a temporary restructuring of remuneration necessitated by business constraints.
It argued that there was no agreement promising repayment of the reduced salary and that the employee had accepted the restructuring without protest.
The High Court observed that the only contemporaneous document communicated to and signed by the employee was the salary restructuring letter which expressly described the arrangement as a "re-structure" and an "interim measure", without containing any promise that the reduced salary would be repaid in the future.
It further noted that there was no formal written agreement, board resolution or contemporaneous document recording any obligation on the company's part to repay the reduced component of salary at a later date.
The appellant also admitted during cross-examination that she had not objected in writing to the restructuring, nor could she produce any document showing that any other employee had received payment of the alleged deferred salary.
As such, the Court dismissed the appeal.
Appearance: Mr. S.C. Anand Advocate for Appellant; Ms. Venancio D'Costa and Ms. Gauri Goel, Advocates for Respondent
Case title: Anju Dhawan v. M/S. Aithent Technologies Pvt. Ltd.
Case no.: RFA 648/2024