Navigating Final Settlements: What Should You Expect When Leaving a Job?

Hi all,

I am requesting some information on what final settlements/benefits an employee should expect during their resignation/removal from an organization. What should the company's duties be concerning the release of the employee (relieving certificate/experience certificate), transfer of PF, and other benefits (unavailed leave), etc.?

Regards

Dear Syp,

The following is usually followed during separation:

i) Notice pay in case of termination/ Retrenchment benefit (under ID Act, 1947, if applicable)/ Notice pay to be paid to the Employer in case of Resignation without serving the Notice Period by the employee.

ii) If PF is present, then Form 13 is to be issued by the New Employer (not the Present Employer). If the person is not in employment in case of termination, he/she can apply for voluntary withdrawal of PF by submitting Form 19.

iii) Accumulated Leave encashment

iv) Gratuity if applicable

v) Release-cum-Resignation acceptance letter (can be given separately also). Full and Final Settlement Letter

vi) Experience Certificate if asked by the employee.

vii) Request for the release of personal documents held by the company (if any) like Employment Exchange Card, Passport, etc.

Yes, and obviously, the salary due should also be paid. I have mentioned it here because all due adjustments are done by the following method by the Company:

a) Salary due

b) Leave Pay due

c) Gratuity due.

Revert back for further queries.

Regards,

SC

Hi Swastik,

In addition, there is one more document which is very essential apart from all. That is a 'NO DUES CERTIFICATE' or 'CLEARANCE CERTIFICATE' from all the departments stating that there are no company documents or any other company material/property is lying with the employee. Also, depending on the position of the employee leaving, the handing over and taking over document is also necessary sometimes.

Regards,
PRADEEP :)

Hi SC,

It is not the release cum resignation acceptance letter; a 'No Dues Certificate' is something that will be certified by all departments, such as Accounts, HR, Stores, Purchase, Library, etc., along with the department boss stating that there are no dues against the name of the leaving employee. This has nothing to do with the acceptance letter.

Regards, PRADEEP

A final settlement flow chart will be something like this:

a) Receiving of Resignation letter from the employee through the departmental head giving the exact date of relieving.

b) Issuing Acceptance Letter and asking the individual to clear all his dues, return tools and files given to him for use.

c) On receiving the No Dues Form signed by each department (e.g. stores, admin, finance, IT, etc.) to initiate the final settlement calculation.

d) Keep in mind the notice period required and served.

e) The calculation will include prorated salary for the particular month, unpaid dues if any as per company policy, leave encashment if permissible, and deduct statutory dues, debits as mentioned in the No dues form, and IT as applicable.

f) Settlements are always to be paid through an A/C Payee Cheque or by crediting his bank account.

g) Issue a Service Certificate.

h) Do not forget to host a farewell get-together too.

Dear Pradeep,

The Release Letter, along with the Full and Final Settlement Letter, is only issued after you receive the no-due certificate. This No-due certificate is an internal document between you and your employer and cannot be demanded by your current employer.

Regards,
SC

Sir,

I would really be thankful if you could mention a few sources where I can find the legal rules and details that an HR should know.

Regards,
VINAY

Dear Vinay,

You have to refer to the following labor laws while full and final settlement takes place:

1. Company Employment Standing Order, which is approved by the concerned Labour Commissioner.
2. Payment of Wages Act, 1936.
3. Industrial Disputes Act, 1947.
4. PF Act, 1952.
5. ESI Act, 1948.
6. Gratuity Act, 1972.
7. Bonus Act, 1965.

These are the main laws under which the company has to make full and final settlement.

Regards,
Sidheshwar

Dear Syp,

Upon submission of the resignation letter, the employee should obtain No Dues/clearance from Finance/Payroll, Admin, IT (Software Co) / Maintenance (if Manufacturing Co), Library, and submit one copy to HR during the notice period itself. The No Dues must include information about leave balance (Accumulated Leave encashment) certified by HR. This will enable HR to prepare the release letter, relieving letter, or resignation acceptance letter.

PF Withdrawal, Superannuation (if applicable), and Gratuity (if applicable) forms can be collected before the employee leaves the organization.

Regards,
Praveeb

To: The Concerned Department Heads
Dt: [Insert Date]

The following employee has resigned and is seeking relieving services. Kindly provide the employee's details in the format below:

Name of the Employee: Mr. [Insert Name]
Emp. No.: [Insert Employee Number]
Designation: [Insert Designation]
Location: [Insert Location]
Department: [Insert Department]
D.O.J: [Insert Date of Joining]
D.O. Resignation: [Insert Date of Resignation]
D.O. Relieving: [Insert Date of Relieving]

CLEARANCE FORM

| Dept. | Dues if any | Signature/Name of H.O.D |
| Own Dept. | | |
| Stores | | |
| Mess & Canteen | | |
| Fin. & Accts. | | |
| H. R. Dept. | | |
| Others | | |

Note: If the space provided is insufficient, please attach a separate sheet.

____________________ ________________________________
(Signature of Employee) Signature of HR Head

Hi all Members,

In my office, my senior is asking me to prepare a flowchart for the resignation process. If anyone has a relevant flowchart, please send it to me.

Thanks,
Vjdj

Hi,

If anybody reads the blog now, this is my question: I left my first company in October last year. In my current company, I am asked to provide details of my previous employment salary, tax paid, etc., and they require either Form-16 or Form 12B from my previous employer. Since I joined in the middle of the financial year, there is no question of Form-16, but what about Form 12B? Will I receive it along with the final settlement documents from my previous employer?

Kindly assist. Thanks in advance!