Notice Period and Termination Practices
There is no concept of a notice period when someone's services are terminated by the management. Termination can be on grounds of inadequate performance or lack of discipline. However, if termination is for right-sizing the organization to meet business objectives, it should be a fair (though not mandatory) practice to give one month's notice to enable an employee to find an alternative job.
Issuing a Relieving Letter
There is no bar on issuing a relieving letter, although the organization can mention in the relieving letter that the employee's services were terminated with effect from dd/mm/yyyy on XYZ grounds. Mature organizations, however, prefer not to mention the termination in the relieving letter, with the intention of not imposing a lifetime bar on an individual's employment. Additionally, mature organizations seldom invoke the termination clause; they prefer to ask an employee to resign, which is a better option to deal with non-performers. However, a non-performer may hesitate to resign, being fully aware of their market worth. In such cases, the organization has no option but to terminate the services.
Full and Final Settlement
Regarding the full and final settlement, it must be done in all cases of termination or forced resignation since the wages due for the period already served cannot be denied to an employee who obtains a clearance certificate from all sources before exiting. When an employee does not owe anything to the organization, there is no logic in not settling their accounts within a specified period (say, 2-3 months).
Any separation must be done with goodwill, a cardinal principle in all human relationships.