Dear Colleagues, I was with a firm as HR Head and we used to clear dues in 30 days and the FNF letter was given on the last working day itself.
The new company insists on 45 day period which I find no logic. Can you give me some recommendations as to why we have to follow the 45-day rule

From India, Pune
Dinesh Divekar
Business Mentor, Consultant And Trainer
Sr. Hr Executive
Consultant-labour Laws
+1 Other

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Dear Neha, The policy and procedures differs from company to company. Some companies do clearance with in 7 days and some take 45 days to complete formalities or to follow TAT scheduled by them.

Dinesh Divekar

Dear Neha,

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.


Dinesh Divekar

From India, Bangalore

I know few companies which give the FNF cheque as well as the relieving letter on the last working day of the exited employee. Those employees become a brand ambassadors for such companies and their good practices
From India, Delhi

Mr Dinesh Divekar has rightly said. it can be done with monthly salary. to add on, not only HR department, the finance department who ultimately takes care of payable need to be sync with requirements of HR and work towards smooth functioning. delays not only attracts litigation but spoils the build up image of the company as well. the dedication towards this requires a direction from top management who ultimately is responsible for overall functioning and brand building.
Harpreet Walia

From India, New Delhi
Can a company take more than 100 days to give F&F payments?
From India, Ernakulam

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