How Long Can a Listed Company Delay Full and Final Settlement After Resignation?

Please tell me the maximum time a limited company listed on the stock exchange can take for full and final settlement. Can salary be held for the month during which the employee has served the full month and is relieved in the next month until the full and final settlement? Please advise.

Regards

You appear to work in Bombay, thus you are governed by the Bombay Shops and Establishment Act. Under the Act, provisions of the Payment of Wages Act are incorporated in it. As per Section 5 of the latter Act, upon termination, wages are payable before the second working day of termination.

Thanks,
Sushil

Payment of Wages Act and Time Limits

For all items other than wages, you are governed by the limit specified in the Payment of Wages Act, which provides for a 30-day time limit. However, if your salary is above ₹18,000 per month, then you are not covered by the act. So, for payments other than the actual wages, the company is not subject to any directly enforceable time limit.

I have always had doubts about the legality of moves by the company to hold back payments of salary during the notice period and paying it when the employee completes his notice period. Again, if you are outside the limits set in the Payment of Wages Act, the requirement that all wages and salaries have to be paid within seven days of the end of the month does not apply. I suspect if you were to go to court, the law would rule in your favor. However, that is not a practical solution. So, you can do nothing but wait for the end of your notice period and collect your salary for the notice days.

At no point in time can an employer withhold the salary of an employee who has already completed the work. However, if any deductions are to be made, they must be carried out during the F & F stage. This is why there is a checklist called the NDC (No Dues Certificate), where the employee is cleared after thorough scrutiny from each department, provided there is a proper relieving process.

In cases of unauthorized absence or leaving the company without prior intimation, the company must send a letter informing the employee of their absence and proceed to close their F & F without delay.

Finally, when it comes to EL encashment, Bonus (if applicable), etc., any outstanding dues can be deducted and the employee's exit formalities can be completed.

I hope this clarifies the process for you partially.

Regards,
Sathish G