Former Employee Requests PF Withdrawal After a Year: Should We Demand Notice Period Dues First?

I require your kind advice on this matter. We had an employee working for about four years, who quit more than a year ago in 2012 because he got a better job opportunity. He served only 25 days' notice against a notice period of two months. After receiving that particular month's salary, he stopped coming to the organization as he wanted to join another organization early and was not willing to serve the complete notice period. He held a senior position and did not even return to us for final settlement.

Now, after more than a year, he contacts HR asking for PF withdrawal. Although we have no issue with processing his PF, can we request him to settle his dues with the organization first? He left without notice and still owes payment for his remaining notice period, which he did not clear. Let him pay the organization the remaining dues, especially since he did not leave on proper terms.

Please advise.

Hi Meenu, I can understand that such situations are challenging to handle. However, after analyzing the situation, I find it best to follow this practice:

1. First, determine what is due from the person. It is important that dues are cleared from both sides.

2. I didn't understand your statement - "He had served only a 25-day notice against a notice of 2 months, and then after receiving that particular month's salary, stopped coming to the organization". Usually, if a person resigns, they do not receive a salary in between and get it only as Full and Final settlement.

3. Nonetheless, as you mentioned your notice period clause is 2 months (60 days). The person served only 25 days, i.e., 60-25 = 35 days are still to be served. Now, depending on your company's policy, you can either:

a. Deduct the salary of 35 days in the Full and Final settlement (or ask him to pay you).

b. Deduct the leaves to his credit from the 35 days and deduct the salary only for the balance of the notice. For example, if the person still had 10 leaves to his credit, deduct those from the notice. So ideally, he's to serve you for 35 - 10 = 25 more days, deduct salary for those days.

4. I am sure since the Full and Final settlement was not given, he might not have collected his relieving and experience letter as well.

5. I am not sure if PF can be claimed or not as there is a specific time period in which one has to claim it, which I am unsure of. However, since you sought advice on how to process the salary payment or due clearance, I have tried to advise the best I can.

Hope this helps.

The suggestions given by you have always been very knowledgeable and helpful . Just to add to the information, the employee can claim his PF within a period of 3 years, after which it is used for development purposes (which means we will not be able to claim it from the government thereafter).

Please ask for clearance of the balance dues from him, and then you can issue a relieving letter and clear his EPF form, etc.

PF Withdrawal and Employee Dues

PF is an amount deposited into the account of an employee. No employer can prevent the employee from making a withdrawal. However, in cases where the employee owes money to the employer, the employer may request a post-dated check to clear the outstanding amount.

Please let me know if you need any further assistance.

Thank you so much for your kind advice, Ankita. Yes, I understand your point. I have another question in a different context and situation. Let's say an employee works for a month in the organization and absconds from the organization without any charge/handover. Then, after six months, the employee comes back and claims their settlement.

Legal Obligations for Absconding Employees

Legally, how long are we, as HR, supposed to keep records and full and final (F&F) details of an absconding employee? What if an employee comes back after one year? Please suggest.

Thank you so much for your kind advice. Yes, I understand your point. I have another question in a different context and situation. Let's say if an employee works for a month in the organization and absconds from the organization without any charge/handover and then comes after six months and claims for his settlement. Legally, how long are we supposed to keep records/F and F details of an absconding employee? What if an employee comes after one year? Please suggest.

Thank you so much for your kind advice. Yes, I understand your point. I have another question in a different context and situation. Let's say if an employee works for a month in the organization and absconds from the organization without any charge/handover and then comes after six months and claims for his settlement.

Legal Record Keeping for Absconding Employees

Legally, how long are we supposed to keep records and full and final details of an absconding employee? What if an employee comes after one year? Please suggest.

Regards.

I have another question in a different context and situation. Let's say if an employee works for a month in the organization and absconds without any charge/handover, then comes back after six months to claim his settlement.

Legally, how long are we supposed to keep records/F&F details of an absconding employee? What if an employee comes after one year?

Absconding is an issue, and the way to handle it depends on the tenure the person has served with you. For example, there are a few people who come to your place for a few days or a week and then vanish. What can be done? You surely don't want to hire them back. That is it.

But say a person has worked with you for a considerably longer duration (12+ months or so). Though we would mark him/her as absconded, we may want to at least chat when he/she comes back for his/her F&F.

About Keeping Employee Records

If you have extended an appointment letter to anyone, it is your duty to keep in the file the documents of the person - a copy of residence, photo ID copy, and certifications copy (if needed). These photocopies should be attached to the appointment letter that bears the acceptance signature by the person.

Every data of the person's performance like appraisal results year-on-year, any achievements he got, leave forms, etc., should be filed in duplicate in the records. Ideally, you should be maintaining the records of people who resigned or left for a certain duration (I think for 5 years). I hope this clears your doubts on how long the data should be preserved.

If a person absconds in one month's time, keep the records as I had already mentioned. If the person's salary for the previously worked month was already disbursed and if there are no dues left, I don't think there's anything left. Ideally, a person would not want an experience letter for one month. But if they need a relieving letter, what to do? You can ask him to give a resignation letter. Ensure that it is not backdated. You can hand over the relieving letter dated the current date, and in the letter, you can mention that "The person is relieved of all his/her roles with effective (back date)."

If the person had not taken his salary for the previous period of his work rendered, what to do? He may claim for F&F. As goodwill, I don't think it is very correct to say no on the face of it. You can instead call the person to meet you for this. Ask for the absconding reasons and then justify if that was right. You can explain the company's policy and say there's nothing to be done to give you the claim. All these again depend on the termination policy of your firm.

Honestly, there's no one best practice we can adopt for all as the policies and regulations change from firm to firm and ideally from case to case basis. I always say that as HR, we deal with humans (who are all different) and not robots. So don't just nail the rules. Even if you do, at least be open to listening to them and then explain to them why you can't do it.

Hope this helped.

PF Interest and Withdrawal Policy

The PF department pays interest on the amount in your account for 3 years after the last deposit. Thereafter, the interest is stopped. The money is still yours, and it can be available for withdrawal at any time you want.

Thank you for sharing this information. However, at my previous company, our head office has been following the same norms for PF. I'm sure what you have said is correct, but I will still try to get confirmation from my end because if you are correct, then my previous company is definitely following something wrong.

Besides, do you have any instances where an employee has tried withdrawing after 3 years and was successful in getting it? Please do help me with it.

Kindly do not get me wrong; I am asking for the same so that it can help deepen my knowledge about PF.

I think there are lots of discussions on the same topic. Please have a look at the previous ones through the research button. I have just checked with a client whose factory I am sitting in today for an audit. He confirmed that he has many cases where the person got his PF after applying more than 4 years after leaving.

As I understand from your query, after giving his resignation, he worked for 25 days during the same month. After receiving the salary for the month, he stopped coming to the office without obtaining the Service & Experience Certificate. Now, he is approaching to withdraw PF. Is that correct?

These types of cases are now very common at lower levels. My advice is to please ask him to settle any dues he may have. Then, relieve him and close the chapter. Before relieving him, please advise him on what he did wrong and what not to do in the future, anywhere.

Regards,
Vijay

As much as I dislike such people and would love to see them denied the money, as per the law, you have no option but to sign the PF form and give it. According to the law, a person's PF account cannot be held back or set off/adjusted against any dues. However, nothing requires you to make it easier for him.

So by all means, send a letter reminding him of his dues and handover, etc. Ask him to pay the dues immediately. But don't specifically threaten to hold back PF or to process it only after that. In the end, he can get the money without your PF form also. There are methods introduced for that.

If he sends the form officially by registered post, then you can be held accountable by the PF department for not signing the form, and you should have a good defendable excuse handy.

There is no time limit for withdrawing the PF amount. In fact, many employees keep it lying there, as it attracted more interest than any bank deposit (interest accrual has been discontinued now). Moreover, it is the most secure form of financial holding. It cannot even be attached by any court. This is what makes PF very special - it provides for future events and calamities. In Hindi, it is called Bhavishya Nidhi - funds for future requirements or exigencies. All HRs must make themselves aware of these features of PF.

Warm regards.