Is a Relieving Letter Mandatory in India, or Just a Good Practice?

Hi Rinku,

I've been reading a lot about relieving letters from the employee side. But from a legal point of view, must a company issue a relieving letter? Is it mandatory by Indian Law? Thanks in advance for your feedback.

Thanks to all for your valuable feedback. My summary and final thoughts below:

Although not legally required, a relieving letter may be viewed as a general part of the employee/employer relationship. A company should carefully craft the process by which a relieving letter is generated, including any specific terms. These should be provided to the employee upon hiring so that there is no confusion upon exit/termination.

Hi Rinku,

A relieving letter may not be mandatory under Indian law. However, for HR records and statutory obligations, we must continue with the process of issuing a relieving letter.

From the Employer's Perspective:
1) Payroll processing for a resigned employee.
2) Record-keeping for the employment history of an employee within the organization.

From the Employee's Perspective:
1) Facilitating future career opportunities.
2) Maintaining a record of their career growth.

I hope this information is helpful, and dear Sr., please correct me if I am mistaken in any way.

Regards,
Sai Prasad

Thank you, Sai Prasad...

But let me play "Devil's Advocate" from a company point of view...

Employer Point of View:

1) Email from the manager to the accounts department solves the issue of the payroll run. Internal communication.

2) The email serves as a record. Again, internal communication.

General:

1) If the employee is leaving on bad terms, why should the employer care?

2) If the employee is on good terms and you issue a letter, and another is on bad terms, the latter would come back and argue that the company is inconsistent.

3) If the company issues an experience letter when an employee leaves and has satisfied any leaving rules, isn't the relieving letter redundant?

4) If legally not obligated to generate a relieving letter, then why even do it as statutory obligations may be handled through other internal means.

Regards, Rinku

Dear Rinku,

Mr. Sai Prasad has explained the situation well. Good employers, irrespective of whether the employee has left on good or bad terms, issue relieving and experience letters to their ex-employees. For them, it is just like providing good working conditions, good office equipment/facilities, etc., to their employees - whether or not it is mandated by law. On the other hand, there are employers bent on exploiting their human resources in the worst possible manner with utter disregard for human rights, dignity, or natural justice.

In the instant case, the choice is entirely left to you and your company, depending on their principles and policies. Hope this clarifies the matter.

Warm regards.

Dear Raj Kumar,

I am dealing with Directors from the States who do not understand the concept of relieving letters and experience letters here in India. I have been reading a lot on the forum, and there are many issues surrounding relieving letters. Many companies do not want to issue them or hold back issuing them.

Great Forum!!

Regards,
Rinku

Hi Rinku,

I subscribe to the opinion of Mr. Raj Kumar. It is the duty of a good employer to issue a relieving letter and also make the Full and Final settlement of an employee before he leaves the company. A smooth exit process also goes a long way in creating goodwill for the company in the job market (brand building).

I would just like to add that these days most companies insist on a copy of the relieving letter from the candidate when he/she joins an organization. If you have the process of issuing a relieving letter in place and explain the importance of the document to your employees well, they will have a fear in their mind that if they leave the organization on a bad note, they might face problems in their next job.

There will always be a breed of employees who will not care about documentation or professional ethics. We have to take a different approach to retain them or ensure a smooth exit process.

I hope this makes sense to you.

All industrial establishments that come under the purview of the Industrial Establishment Standing Orders Act are legally bound to issue a service certificate, which includes the relieving date as well.

Thank you!

Hi Rinku,

Just think, if an appointment letter is a must for an employee to introduce him/her into the company for internal purposes or record, as well as for the knowledge of outsiders, why not a relieving letter also? Do you want that for outsiders he/she should be allowed to pose as an employee of the company forever even if he/she has left the company? Can some such employee not take undue advantage of the company name and goodwill even after having severed his/her relationship with the company?

If a formal relieving letter is not considered necessary, the company may also not need to issue any formal appointment letters. Then why are appointment letters issued?

It is always a two-way affair, not a one-way affair for the company as well as for the employee - in and out! Ethically also, it is a must, whether the employee is being relieved in good terms or in bad terms. Every detailed bit is neither available nor possible to be found in law.

P S Dhingra

Hi,

I've been reading a lot about relieving letters from the employee side. But from a legal point of view, must a company issue a relieving letter? Is it mandatory by Indian Law?

Thanks in advance for your feedback,

Rinku

It is, though not mentioned in any law, a must to send a relieving letter as it creates confusion in a later stage.

In addition to the points, as pointed out by our friends, there is a possibility of a claim of gratuity, etc., from an employee whose service may be treated as continuous as he or she is not getting relieved officially. Moreover, what hampers a HR Manager from issuing a relieving letter to a resigned employee or a notice to a non-reporting employee?

Under Section 60 of the Factories Act, 1948, there is a restriction on double employment, which states that "no worker shall be allowed to work in any factory on any day on which he has already been working in any other factory."

Therefore, at least in a "Factory," we must insist on a relieving letter so that we do not contravene the above provision of the law.

K. LAKSHMINARAYANA RAO

As a responsible management, once you receive a resignation letter, you are expected to acknowledge it and provide a relieving order.

Please note the corrected spelling and grammar in the text above. Remember to maintain professionalism when handling resignations in the workplace.

Hi,

The issue of a relieving letter must be viewed in the context of the contract for employment. It is important that the new employer enters into a fresh contract of employment with the candidate, and the only proof that he is not under contract elsewhere is the relieving letter, which actually terminates the previous contract of employment.

While it is common now for employers to take on a new recruit even without a relieving letter, let me share a very clear case that happened in the banking industry a few years back. A young man left a PSU bank to join a private bank, which took him on without a relieving letter due to urgency. A few months later, they received a call from the PSU bank, informing them that this guy was under suspension for fraud and was to be dismissed. When they found out he had joined the new bank, they were very upset. Later, the private bank got reprimanded by the RBI officially as they had allowed the man to join when his original contract of employment was still valid.

I feel that a relieving letter is a must to indicate the termination of the contract of employment.

Job Xavier
Trinity Academy, Mumbai
98923 29188

Hi all, I came out of my previous company without resigning properly, where I was in a probation period of 3 months. I have now joined a new and better company. My new company is asking for a relieving letter for verification purposes. When I contacted the old company, they said it is not possible since they have closed my employment in an absconding case. I left the company in Nov '11 and went back asking for the relieving letter by Feb '12.

Please let me know how to get the relieving letter from the company officially or legally. My intention to leave the company was not to waste time there as I was not interested in the job.

Regards, Porsche.

I have received the relieving letter from the employer (India). The letter reads:

"This is to certify that Ms. XXX, to whom the notice of separation was given on the 6th of dd/mm/yy, has been relieved of all her responsibilities at XXXX company, with effect from dd/mm/yy."

Question Regarding Relieving Letter

My question is, will this relieving letter be considered a termination letter? If yes, please explain the reason. If no, please explain the reason. On the same note, I would like to mention that I have not received any prior notice or warning from the employer before receiving this letter. I am not understanding how to present this letter to the employers and how they will treat it, as the term "notice of separation" is unclear to me. Please help.

Regards

The letter given by management will serve as a termination letter. The very wording itself indicates that you were given notice of separation, and after the period, you have been relieved of all duties with the company. Were you on probation or a contract with the organization?

Notice of separation has negative connotations in my mind. Other learned forum members can comment on this aspect.