Exit Formalities: Should They Differ for Resignation and Termination? Seeking Advice

Respected Seniors, my query is, if an employee submits a resignation, then only EXIT formalities are to be conducted. But if an organization terminates an employee, should EXIT formalities be conducted or not? Additionally, when should the terminated employee's full and final settlement be paid? Please help me in this regard.

Regards,
Tiku

When an employee is terminated, they must be paid for the notice period. Full settlement should be completed after the notice period is fulfilled.

When an employee submits their resignation, they are required to work through the notice period, and end-of-service benefits should be provided according to labor law.

Exit formalities are applicable for terminated employees.

Regards,
[Name Removed For Privacy Reasons]

In case of termination, the company needs to be extra cautious as one wrong decision may land the company in trouble. Yes, in case of termination, the employee is entitled to all the exit formalities. But you failed to mention why the employee has been terminated.

There will be a separate procedure for an employee who has been terminated because of any misconduct and the employee who has been terminated without conducting misconduct. I am replying assuming both conditions.

1st Condition - Termination Due to Misconduct:

After conducting a proper inquiry of the misconduct in a domestic enquiry, the punishment of dismissal may be awarded. In such a case, the company need not give him any retrenchment compensation. On the contrary, the company may forfeit his Gratuity to the extent the monetary loss is caused to the company due to his misconduct. But if after adjusting that amount some money is left, the same has to be paid to the employee. His PF must be cleared, and no deduction from it can be made. All other dues have to be cleared.

2nd Condition - Termination Not Due to Misconduct:

If the employee has been terminated for any reason other than punishment resulting from misconduct, the company will have to pay him the retrenchment compensation as per the statutory norms. His leave encashment, gratuity, notice pay, any other dues, and PF MUST be cleared forthwith. Keep in mind that any failure may land the company in the loop of labor laws.

In case of any other clarification, please feel free to call me.

Regards.

Resignation is a form of termination from the job initiated by the employee. The employer is responsible for the full and final settlement and exit formalities as outlined in the employment contract, regardless of whether the termination is initiated by the employee or the employer.

Thank you.

When an employee is terminated on disciplinary grounds or resigns, the exit procedures must be followed. This includes payment for unutilized leave, etc. However, fines and damages could be recovered before releasing the final payment.

Regards, Zafar Deen

I need your assistance with the same issue. Please let me know a suitable time to call you, or you can contact me at [Phone Number Removed For Privacy Reasons].

Regards,
Ruchi Tyagi

Resignation is a voluntary act on the part of the employee, and termination is a company-initiated one. As per the NDA (Non-Disclosure Agreement), most companies have incorporated the clause of either party paying the other. For example, the company has to pay the employee if it terminates him/her, or the employee pays the notice period amount to the company for leaving earlier than the agreed period. If an employee is terminated as per disciplinary proceedings, the company is not liable to pay the employee for termination or release.

It's better for the employee to refer to the signed copy of the Offer Letter in which the HR Head would have signed. This would help the employee to legally fight any aberration to the clauses mentioned therein.

Regards,
Jean Walter

Termination and Resignation: Organizational Impacts

Termination and resignation are not beneficial for any organization. In the case of resignation, the employee will complete the notice period. For termination, the company will pay all dues if the employee is eligible. However, in both cases, it is essential to complete all formalities.

Regards,
Sameer K Ghosh

Exit Interviews and Formalities for Terminated Employees

An exit interview is generally conducted to gather feedback from employees who have resigned, with the aim of using this data to improve HR policies. In cases where an employee is terminated for reasons such as inefficiency or misconduct, there is no need for an exit formality since disciplinary action has been taken, culminating in the termination decision.

For terminated employees, the full and final (F&F) settlement is typically processed on the same day for two primary reasons: Firstly, the management aims to conclude the relationship on the day of termination itself. Secondly, any delays in settling the dues may result in disputes from the terminated employee.

Regards,
Harindra Kumar G

The purpose of an exit interview is to understand how an employee feels or felt about the organization during their employment. The feedback provided by the employee can help the employer assess their performance and identify any issues or areas that require attention. Therefore, even when an employee is terminated, conducting an "exit" interview can uncover important points that demand the employer's immediate attention.

When terminating an employee (assuming all procedures have been followed), any legitimate dues owed to them MUST BE PAID IMMEDIATELY.

Regards,
Balaji