New to HR in a BPO? Need Help with Employee Termination and Final Settlements

Hi,

I am a fresher in HR, working as an HR executive in a startup BPO for the past 2 months. I have the following queries. Please help me out:

1) Can we terminate a permanent employee or a confirmed employee if they are not performing?

2) In the full and final settlement, if an employee resigns without serving a notice period, do we have the right to deduct their basic salary for one month or gross salary for one month? When should we pay them their FNF? Is it after 45 days from the date of resignation or 45 days after the completion of the notice period?

3) When should we provide the employee with a relieving letter?

Thank you.

You cannot terminate the service of an employee without giving him an opportunity to be heard. Non-performance is an acceptable ground sufficient for termination, but it should not happen in a day or week. Before initiating such a step, he should be given a warning letter and provided an opportunity to improve his performance. Otherwise, his termination will be challenged as victimization, for which he may be reinstated if the Labour department intervenes.

Salary for the purpose of notice pay shall depend upon the policy of the company. In the absence of any Standing Orders in this regard, the statutory salary, i.e., the Basic salary and the dearness allowance, shall be taken as salary for both termination wages as well as notice pay from the employee.

An employee whose service has been terminated is entitled to receive full and final settlement of salary due within the close of the second working day following the day of his termination. The same shall apply to cases of resignation also. Therefore, the date of relieving is very important. If he has been in the notice period, the same should be treated as preparing his full and final settlement, and extending settlement for a further period of 45 days is unfair and illegal unless otherwise agreed upon by virtue of standing orders.

The relieving order should invariably be given on the date on which he is relieved.

Regards,

Madhu.T.K

Thanks, Madhu, for your reply. When I was working in "HCL BPO" five years ago, I resigned on 1st Feb '07. My notice period ended on 15th Feb, but I received my FNF and relieving letter on 15th April.

That may be the practice of the so-called firm. I cannot comment on any particular firm's policy but only interpret what is written in law.

Regards,
Madhu.T.K