Dear Jareena,
Nowadays, the HR scenario has drastically changed. Gone are the days of simply trusting anybody's certificate. Furthermore, an individual's performance depends on many factors, including the environment they were brought up in, which essentially shapes them. It is a complex phenomenon. I have seen many individuals who were underperformers in one company (X Company) and turned out to be meritorious performers in another company (Y Company) after just a couple of years.
Since the employee has worked with your organization, it is only fair that they are entitled to a certificate reflecting their employment. Now, it is up to your management whether they are generous enough to part ways with a clear heart or not. It is a common practice for employers to issue certificates and wish every employee a bright future unless the employee has been charged with misconduct.
Regards,
Arun Dixit