Is a No Dues Clearance Certificate Essential Before Final Employee Settlement?

Hi,

I am a new member of this group and would like to know about the No Dues Clearance Certificate. Is this certificate necessary before the full and final settlement of an employee? Also, what are all the points that need to be covered in this?

Thanks,
Sonal

Hi,

This is pertaining to your query "No dues clearance certificate". Please keep the following points in mind:

1. This is given at the discretion of the management.

2. If this is a genuine case wherein the employee has quit and does not owe anything to the organization in terms of monetary/material property of the organization, then the certificate can be issued.

3. Before the final settlement is done, remember to intimate about the employee's resignation (so that finance/accounts start working on the same and they will find out whether the individual owes to the organization in terms of loans/advances/imprest showing against his name, etc.).

4. After you receive the information that there are no dues, then you can issue the letter (on the letterhead duly signed by the authorized signatory).

5. In terms of the company property like a mobile handset/vehicle, etc., this shall be the admin department's duty to monitor and get the same back from the employee.

6. Only after everything has been returned, then the letter can be issued.

Hope that my message is clear and that you have understood the same.

Best Regards,

Sadashiv :)

Dear Sonal,

I strongly believe in the No Dues Clearance Certificate.

The objective of this certificate is to ascertain that at the time of leaving, an employee/executive does not owe any property belonging to the company that was provided to him/her during the course of employment with the company. This may be in terms of assets or cash.

Since every process in an industry or establishment starts from the HR department and finally ends with the HR department, in such a scenario, it becomes the duty of the HR department to ensure the safe return of company property to the company before the full and final settlement of dues in respect of the individual under relieving.

In the proforma for no dues, the HR department should send the format through the concerned individual detailing the date of relieving of the employee from the company to the concerned HOD.

The HOD, by putting his/her signature on the format, forwards the request to all HODs about the relieving of the individual from the company on a specific date and also if anything is due from the individual.

This format, duly signed by every department, reconciles the handing over and taking over of all company property, such as:

1. Books issued to the individual from the library for enhancement and updating of skills.
2. Tools, computer, printer, typewriter issued to the individual for use in the office.
3. Company bag, mobile phone, car, TV set, fax machine, furniture provided by the company for use by the individual at his/her residence, provided by the Administration department.
4. Dues/recoveries against company loans, advances, TA bill settlement, and any other financial dues to the company or to the individual by the accounts department.
5. Leave status by the time office.

When this information is available with the HR department, it becomes very easy to calculate and settle the dues considering NDC issued by other departments.

It is irrespective of the size of the organization to follow this practice. For every structured organization, I strongly believe this procedure is required for smooth functioning.

Regards,

Anil Anand