FIITJEE, aka Forum For Indian Institute of Technology Joint Entrance Examination, has reportedly held back the salaries of its employees for a second month in a row. Reports claim that only half of the salary from January was paid just last week and it is believed this is due to cash-flow problems that the firm is experiencing.
However, in an email by the company’s Founder and Managing Director, Dinesh Kumar Goel the reason is not lack of money but that they want to give employees a “wakeup call” to work harder.
This has resulted in a lot of backlash against him with experts weighing in on how legal this move is.
What Is The FIITJEE Salary Issue?
The Matrix Venture Partners-backed company over the course of two emails at the beginning of March revealed that there is no immediate liquidity crisis and this is more a lesson for the employees to be better at their jobs.
As per a Moneycontrol report, an email sent on 3rd March Goel said “When you don’t follow us and don’t do your duty properly at the centers then we can’t run the centers efficiently enough. Coming to the office without clear goals will not take you anywhere. Salary is not a matter of right, it needs to be earned by doing what is expected of you to do.”
A FIITJEE spokesperson told Moneycontrol “The only concern is that because of consistent domination in results of various competitive exams and huge appreciation from the student community, our business team is becoming overconfident & entering into a comfort zone.
Rather, they should have converted the appreciation received by students & the great work done by our teachers into more business, and the wake-up call is only for them.”
They further said that the hold-up of salaries was only because some employees had not yet submitted some information needed for the current appraisal process. According to the spokesperson “We are doing appraisals of centres on the basis of a system being known to every Managing Partner (Centre Head) and all employees for the last 15 years. We have various systems to protect the interests of the students and affect society in a positive way.
These appraisals are part of these checks and balances. There is delay on the part of centres (read Managing Partners & employees) in submitting the required information and therefore, due salaries are yet to be processed.”
“There is no delay on part of corporate operations. As soon as the centres complete their appraisal-related work, due salaries will start getting released. We are urging centres to submit the required information as soon as possible,” the spokesperson said.
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In another report by Moneycontrol, it was said that Goel in a 27th February email boasted about how successful FIITJEE became in its initial days in Delhi despite “a fee that was five times that of the nearest and a great competitor.”
The FIITJEE founder further added “Our various interventions and strategic advice at the corporate level have not been implemented in true spirit even after several years…
I want you to work with renewed focus and vigour in a very strategic, sustained and persistent manner in raising the level of performance of your center so that we are able to fulfil our commitment towards our investors & shareholders. It is imperative that no center can remain non-performing.”
In one email, Goel also brought up the Aakash Institute’s franchisees and questioned employees on why they became profitable and not FIITJEE writing “Every one of our staff must be aware that most of the Aakash Insitute’s Franchisees were profitable (until the Aakash institute was acquired by Byju’s).
Why were they profitable while our centers were burning money received against future services to students, FIITJEE reserve cash, and the investors money? Please do a deep analysis as a center team together, and you will get the answers.”
Rituparna Chakraborty, Co-founder of staffing firm TeamLease Services, speaking with Moneycontrol said “You have to sometimes make choices which are not popular in nature. But even then you don’t do something which is so brazenly wrong.”
T Sundar Ramanathan, Advocate-on-Record and Co-founder of Sarvada Legal called out the part where Goel stated that salary is not a right and said that employees are fully entitled to their salaries considering they are working in return for it.
Chakraborty also clarified that “Until there is gross misconduct or somebody has run away with money, you have to pay salaries as long as a person is employed” and the move could backfire demotivating the employees.
Achyuth Ajithkumar, partner at Traya Law and Advocate-on-Record, Supreme Court of India also commented on this saying “Let’s say in the service contract, there are certain clauses that require employees or their managers to submit documents on their performance to decide the variable pay, even then the fixed pay part should not be impacted.”
Chakraborty also spoke about how although companies can certainly be dissatisfied with employee performance, however, the solution to that is a Performance Improvement Plan (PIP) and not withholding salary.
Speaking with Moneycontrol she said “When an employee doesn’t perform, you give them a performance improvement plan. You give them that feedback, sufficient notice and answer in terms of what you want them to achieve in what period but even during the period, you cannot stop salaries.
After that, if the person is not improving you can ask the person to leave. It (salary suspension as a wakeup call) is the most bizarre thing.”
Image Credits: Google Images
Feature image designed by Saudamini Seth
Sources: Moneycontrol, The Wire, The Financial Express
Find the blogger: @chirali_08
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