As Manoj has said, it is company specific rule. These rules are designed so as to get credit for the amount that company disburses to the exited employee. However, this is nothing but narrow mindedness. Come what may few companies insist on getting credit, be it from their suppliers or employees who quit the company.
While proposing to reduce the TAT for the FnF, you may do it on the following counts:
a) With the onset of the computerisation on usage of HRMS in the companies, TAT for FnF should have been reduced. But then if it takes 45 days to clear the dues of exited employee, then this shows that computerisation or investment in hi-fi IT systems means nothing to the employees. We are still in good old days of personnel management.
b) Delay in clearance of FnF dues erodes the brand image of the company. On the one hand we talk about being employee-friendly but sooner the employees puts in papers, we treat him/her as outcast. Employees, whether current ones or former ones, are the brand ambassadors of the company. What they talk about the company in the job market matters lot. To maintain our brand image, or to promote positive talk about us, timely clearance of the employee's dues is important.
c) Rather than fixing the time limit of 30 or 45 days, it is better to clear the dues along with the monthly salary. At whatever date employee quits the company, what is wrong to credit his/her salary along with the monthly salary? Payment of gratuity, if applicable can also be paid along with the monthly salary. As such employees give sufficient notice before they quit. Even then also why do we need 45 days for clearance of the dues?
d) Last but not the least, withholding the salary of the exited employee is illegal under the provisions of Factory Act or Shops and Establishment Act. Why we should wait for objections from Labour Officer? Suppose if some employee were to make complaint to Labour Office, then we will not have any valid reason to give. For further queries, feel free to contact me
Thanks, Dinesh Divekar 13th June 2017 From India, Bangalore