Navigating Employment Challenges: Relieving Letter, Background Verification, and Full and Final Sett

What are the consequences if we hire a person who did not receive the relieving letter from their previous employer? We are unaware if the individual is on leave from their previous employer during the period they are working with us.

What are the consequences if we hire a person who did not receive the relieving letter from the previous employer?

Possibilities:

1) He might have misappropriated the previous company's assets or property.
2) He might have committed a criminal offense with the previous employer.
3) He might have outstanding loans or debts from the previous employer.
4) He might have absconded from his duties or services.
5) He might have taken leave to explore and evaluate your company, and he may prefer to return to his previous company if he does not like your company's culture, job profile, etc.

Dear Veeresh Mathad,

While appreciating the input from Prashant, which provides the standard HR reply/reasons, the time has come for us to think beyond what we have learned or what we have been doing so far.

Despite accepting the "Hire and Fire" concept in employment, which favors the employers, we are still bound by the British legacy of government services and documents such as Relieving Letters, which have no bearing on the "Hire and Fire" philosophy.

There is no law that mandates accepting a Relieving Letter from the previous company before hiring a person. If such a law exists, I would appreciate enlightenment on this aspect.

Addressing the question of what happens if the person has committed fraud, theft, etc., with the previous company, it is essential to recognize that our country has a robust and fair Legal System and Law Enforcement System designed to handle such matters. An employer is neither a judge nor a policeman, and the law does not hold them accountable as an accomplice if an ex-employee has committed wrongdoing.

It is crucial for us, as HR professionals, to act more professionally and reduce the replacement time, rather than conforming to the status quo.

For those who may be hesitant, as a precautionary measure, one can request a declaration from the employee regarding their resignation, potentially in the form of an affidavit or even an Indemnity Bond on non-judicial stamp paper of appropriate value.

Note: The opinions expressed above are applicable to companies in the private sector only.

Warm regards.

Dear All,

I would like to add to the above discussion that, as has been mentioned numerous times on the forum before, sometimes management unjustly treats employees (whether the accusations are true or false, even without proof). In such circumstances, should we dismiss a person who could potentially be a key player in the new venture?

Therefore, it is suggested that the background of the new employee be thoroughly verified. As previously mentioned, an affidavit could be obtained with a clause stating that if at any point during their tenure with the company, any statement is found to be false, the management will have the authority to terminate their services without notice or inquiry.

Thanks,
V K Gupta

I would like to add my view.

In many cases, I have seen that employers harass departing employees by not paying their Full and Final (F&F) dues, not issuing service letters, and not providing relieving or clearance letters. When hiring a permanent employee, it is important to have them declare that they do not hold employment in any other organization. Nowadays, employers conduct background verifications of new employees, which helps identify any issues for the employer to take appropriate action.

We need to change our perspective and move away from the traditional belief that the employer is always right.

Hello Veereshmathad,

Further to what Raj Kumar mentioned about the options available to you as HR, please also confirm with the prospective employee the reason(s) for not being able to submit the documents. Usually, such aspects can be assessed during face-to-face interviews by observing the body language to determine whether the individual is being genuine or providing false reasons.

Additionally, there are methods to investigate if a specific company pressures its employees for the full and final documents. It would be advisable to cross-check and make a decision based on Raj Kumar's suggestion. A sworn affidavit is now an accepted method for handling such situations, as it is observed across various industries.

Regards,
TS

Dear All,

I resigned from my job on 4th August 2013 (with one month's notice given on 4th July) as my husband was posted to another location. On 8th July, I was asked to return the company assets, without which I could not perform my duties as it was a field job. Our head office is in Gurgaon, and I requested the admin officer to arrange a ticket for me to return the assets in person. He booked the ticket for 19th July. During this period, I did not visit the field assuming that since I was asked to return the assets, I was no longer employed by the company. However, on 16th July, my immediate boss questioned me about not visiting the field. I explained that I thought I should not visit the field since I was instructed to return the assets. When he appeared unaware, I pointed out that he was also CCed in the email and should have been aware. Following his instructions, I resumed field visits from 17th July and worked until 31st July.

Now, when I am requesting my Full and Final settlement, I am being told to collect outstanding payments from our clients. However, none of our clients are willing to make advance payments as they are uncertain about the new person replacing me and had previously made advance payments due to my good work. The company states that if I fail to collect these payments, they will not process my Full and Final settlement. In this situation, what should I do? If I resort to the labor court, I may not receive a relieving certificate or experience letter. Moreover, the overall environment in the company seems negative, with several employees either resigning or being asked to leave in the past few months, still awaiting their Full and Final settlements.

Now, please advise me on the following:

1. If I do not have an experience certificate or relieving letter from this company, does it imply that I have:
- Misappropriated the previous company's assets/property.
- Committed a criminal offense against the previous employer.
- Taken a loan/debt from the previous employer.
- Abandoned my duties/services.
- Taken leave to join and assess a new company.

Kindly guide me on the best course of action to obtain my Full and Final settlement (comprising reimbursement for May, June, and July - totaling around 70,000 INR) and how I can withdraw my Provident Fund if my boss refuses to sign the withdrawal form.

Thank you.

Dear Anonymous,

I understand your problem and empathize with your predicament.

The reasons cited, viz.

"..... Now please tell me that if I am not having any experience certificate/ relieving letter from this company, does that mean that I have:

- Done any misappropriation of previous Company's Asset / Property.
- Done criminal offense with the previous employer.
- Taken any loan / debt from the previous employer.
- Absconding from duties / services.
- Taken leave to join & check a new company."

These are exactly that cited by any HR for producing a relieving letter. Although every practicing HR worth his salt knows that these reasons are only in theory and rarely seen in practice. After being in contact with thousands of candidates; I have come across only a few who belonged to the last category, but then checking a new company out before committing oneself is not a serious crime.

This, quite often, is built into the procedures, which again are legacy systems. Being aware of how companies are working these days when the matter regarding an employee trying to leave the company comes up; which again are formulated by HRs of companies who are too subservient either due to fear or greed; or lack of expertise or keeping up with times. The idea is to make an example of the employee quitting, so as to pose an effective shield against attrition.

Such practices are despicable, not only because they are against the spirit of progressive HRM but also make HR appear ridiculous and redundant; as these portray HR as dogmatic, static, and rooted to systems and procedures which are counter-productive. HR should always be pragmatic and dynamic and keep its practices abreast with the times.

As we have already discussed earlier, why a relieving letter is an unnecessary document that only brings inefficiency and delays. Why should the placement or induction of a new employee depend on the inefficiency and bad attitude of the previous organization?

There are several perfectly acceptable alternatives to a Relieving Letter which a good contemporary company should be perfectly willing to accept. A prospective employee should not be penalized, nor a Company be put on hold, just because the ex-employers are inefficient, vengeful or lack concern for its employees.

Hope that, although this does not provide any specific solution for your problem, will still comfort you.

Warm regards.

Dear all,

Since my entire service was with the state govt, of course, which was my own choice though I belong to the erstwhile new breed of management graduates of the 1970s, I was quite unfortunate in being deprived of the chances of changing employments at will as well as analyzing the profiles of such fleeting birds. However, the first glimpse of the various answers posted to the query by Veereshmathad gives me a spontaneous urge to participate despite my lack of professional experience in this regard. My only counter question is to the questioner himself. Why do you prefer such an experienced person for the job? Other things remaining the same, if experience is the deciding criterion, I am not able to understand why there is such a botheration about formal relieving orders from the previous employer when it is known that during his authorized leave period the individual accepted your offer of employment and joined your services.

In this regard, I would say that Prashanth has generalized the issue and pointed out the reasons quite academically. Rajkumar, as a seasoned HR man, has indeed made some soul-search and come out with certain preemptive suggestions. M/s. Gupta, Abedeen, and Tajsateesh have either elaborated or complemented his views. However, the tell-tale episode of 'anonymous' adds piquancy to the discussion. Her resignation is of course due to some personal reasons. But it can be easily inferred that her lamentation is not just for the terminal monetary things and something more like future employment based on her previous experience which is neither unrealistic nor unjustified. It is discernible that after the advent of globalization, there is a remarkable shift in employee loyalty - loyalty to the organization has shifted to loyalty to the profession. So, things like head-hunting and increased rates of attrition based on job dissatisfaction would be on the increase.

Dear Simren,

If you are a 'workman' as defined under the ID Act, 1947, you can file a claim under section 33C(2) for the recovery of the amounts due before the Labour Court. If not, the only remedy available is through civil proceedings.

Thank you.

Hiring a candidate without a relieving letter can be both safe and risky for your organization. There are a few cases in which an employee is unable to submit relieving letters:

1. FnF process from the previous employer is not completed.
2. A candidate is trying to deceive.

In any case, if you are not sure of the credibility of the candidate you are hiring, you can contact their previous HRs or check other documents for background verification.

You can also implement HROne into your system, a complete HCM suite to resolve all your problems related to relieving letters. Whether you need a checklist for documents that need to be verified (in case a relieving letter is not provided) before the time of joining a new candidate, or you need to generate a relieving letter for an employee who is leaving.