Employee Final Settlement - terminated due to serious and offensive conduct issues - possible issue we have come across in our company

Dear All,

Greetings! I would like to seek suggestions on a possible issue we have encountered in our company. One of the employees was terminated due to serious and offensive conduct issues. The employee's final settlement, including salary and PF, is currently on hold. Can I please request the experts' suggestions on how to resolve this issue?

Thank you.

If an employee has been terminated, you can withhold his salary. PF can't be withheld - governed by the Indian government - please sign his PF form and hand it off to him.

Hope this helps.

You have provided insufficient information. Please provide us with complete details and specify what advice or clarification you are asking for.

Hi,

I am working as an HR executive and I need clarification regarding employees' F&F. One employee is going to retire on 01.02.2015, but he has an outstanding loan amount of 80000/- from the employee. On what basis do we need to collect the balance amount? Please guide me.

Regards,
Prashant
9341123033

Dear Prashant,

At the time of disbursement of the loan, your office should have calculated the installments in such a manner that the loan is repaid much before his retirement. You will not be able to recover out of PF and gratuity as these amounts cannot be attached. Thus, out of earned leave dues, you can recover the loan. Still, if you cannot recover fully, then firstly get a demand draft in favor of the company and if that is not possible, a check in favor of the company with a forwarding letter that against the repayment of outstanding dues he has enclosed the check. After the gratuity amount or PF amount has been deposited and encashed by him, that amount is attachable.

Thanks,
Sushil

Dear Mr. Prashant & Mr. Sushil K Luthra,

Even after the retirement benefits have been paid and deposited by the ex-employee, they do not lose their character and hence cannot be attached.

You may find the discussion and judgments attached in the following thread useful: http://www.lawyersclubindia.com/forum/P-f-gratuity-90740.asp#.VMXdzNKUcqN

It shall be better if the loan is recovered from the employee by cheque as suggested above or from other payouts or through a recovery suit in accordance with the provisions of the law.

Dear Anitha Poojari,

If terminated, the FnF dues and service certificate have to be supplied on the last day in office along with the termination order. Declining to attest PF forms and withholding PF is an offense, and the punishment may involve jail time.

As rightly suggested, don't block and disburse all FnF payouts and supply all documents.

Dear Ddoaba,
May I cite the relevant legal position regarding attachment of PF and gratuity after it reaches the hands of beneficiary through Kerala High Court decision following Apex Court decision below:
Kerala High Court
P.O. Madhavan Nambiar vs Syndicate Bank on 20 June, 1991
Equivalent citations: AIR 1991 Ker 367
“From the aforesaid passage it is clear that when once the amount is received by the employee on his retirement, attachment is possible and lawful land the exemption provided in Section 60(1)(k) will not be available. To the same effect is the decision of the Supreme Court in Union of India v. Radha Kissen, AIR 1969 SC 762 and the Full Bench decision of the Madras High Court in Joseph v. Official Assignee AIR 1956 Mad 283. In that view of the matter, the execution court was right in ordering attachment of the money lying in deposit in the name of the 2nd judgment-debtor towards the decree-debt”.
Thanks and regards
Sushil

Hi,

I would like to get a suggestion on a possible issue we have come across in our company. One of the employees was terminated due to serious and offensive conduct issues. The employee's final settlement is on hold (salary + PF). Can I please get the experts' suggestion to close the issue?

Thank you for the response given towards the above issue.

SaswatBanarjee: My question was to know how best can the situation be handled since the issue is sensitive. Inline with this, I would also like to know if we can hold back the employees' exit documents and also get a written agreement saying there would be no claims made by the employee over his salary and exit documents or any alternative suggestion for this.

Thank you.

Dear all,

Thank you for your valuable suggestion.

Regards,
Prashant