Navigating Employee Severance and Compensation: Legal Insights and Considerations

If we ask an employee to submit a resignation (instead of termination) and would like to offer compensation to her, such as one month's additional pay (in addition to one month's notice pay), how do we communicate the payment of the additional amount so that the employee receives the benefit, the company's interests are safeguarded, and the employee also receives a clear title upon leaving the company?

Furthermore, regarding the additional payment, do we have to make deductions towards PF and ESI, etc.? This is a sensitive issue.

Dear,

Even in resignation, nothing prevents the employer from paying one month's pay and retrenchment compensation of 15 days for every year worked. Just add one additional paragraph in the relieving letter.

With Regards

Legal Consultants
[HR]

Can the employee go for legal recourse after submitting unconditional resignation (after receiving layoff amount as notice period)? If yes, how can the company safeguard its interests?

Hi,

We are free to pay any amount to outgoing employees on their final settlement as ex-gratia. We can't go beyond the standing order or company policy at any cost. However, we can pay ex-gratia for any amount. No statutory deductions will be applicable towards ex-gratia.

Best Regards,
Saroj Deka

Dear,

When the retrenchment compensation is received, you cannot reopen it unless you are able to prove it is a forced resignation.

With Regards,

Email: rajanassociates@eth.net
Mobile: 9025792684.

There is nothing to worry. It depends on how you convince the employee and take resignation from him on his own, paying compensation. Saying one month's salary is an ideal solution if you feel that you need to compensate him in some way. However, sometimes if you pay for one month, he may ask for two months. So, don't tell him in advance; just disclose your decision at the time of his relieving. This is because if you have not mentioned it in your offer/appointment letter, then he can't claim it. You will show this amount as part of the salary for a particular month so that it will attract PF & ESI. If you mention it as another payment, then it will not.

PK MiSHRA