Navigating Travel Expenses for Terminated Employees: Are We Obligated to Pay for Final Settlement?

Query on Travel Expenses for Terminated Employee

I am posting one query here; please check and provide confirmed replies. We have terminated an employee with a proper one-month notice. We are very ethically interested in paying all the salary as well. However, the issue arises as the candidate is living and working outside of our state, Rajasthan, since the candidate was working from home. Now, the candidate is requesting a travel ticket or travel expenses to come to our office for full and final settlement. This settlement will include handing over all company properties, signing exit formalities, and releasing all dues or salary.

So, please guide me: do we need to pay travel expenses to the terminated candidate? She is no longer working for us and is coming to collect her salary. Please provide guidance considering all labor laws and state laws.

Regards

Full and Final Settlement Process

Prepare the full and final settlement and send it to the residential address of the employee as an advanced stamped receipt, along with a photocopy of the cheque that you are offering as full and final settlement on a 1 rupee revenue stamp.

Upon receipt of the stamped receipt, you may deposit the cheque into the bank account of the terminated employee or send the settlement cheque to the residential address. You may prepare the receipt as follows or in any way you prefer.

Receipt Format

Received the sum of Rs. XXXX/- (Rupees: XXXXXXX) from M/s. ______ at address _________ by cheque no. _______ dated _____, drawn on Bank name and branch in my favor towards full and final settlement of my account. In view of this settlement, I hereby confirm that I have no further claim of whatsoever nature against the Company, including reinstatement.

Full and Final Settlement Process

Prepare the full and final settlement and send it to the residential address of the employee as an advance stamped receipt along with a photocopy of the cheque that you are offering as the full and final settlement on a 1 rupee revenue stamp. Upon receipt of the stamped receipt, you may deposit the cheque into the bank account of the terminated employee or send the settlement cheque to the residential address.

You may prepare the receipt as follows or in any other way you prefer:

Receipt Format

Received the sum of Rs. XXXX/- (Rupees: XXXXXXX) from M/s. ____ at the address ________ by cheque no. _______ dated ______ drawn on Bank name & branch in my favor towards full and final settlement of my account. In view of this settlement, I hereby confirm that I have no further claims of any nature against the Company, including reinstatement or reemployment.

I Accept,

Signature on revenue stamp (If the amount is > Rs. 5000) - This part is for payment purposes for which you need not pay any traveling expenses.

Regarding handing over charges and/or submitting company documents, records, etc., you need to send your representative to the employee's residence to collect the same if you do not wish to provide traveling expenses. Since this is a termination case, the employee will definitely insist on the same. Why would he spend money to hand over your documents that are in his possession? The decision is yours.

Thanks & Regards,

You may send the full and final statement through mail to his personal email ID, and payment may be sent through NEFT or bank transfer. One more thing you can do is to first send him the F&F statement via email to his email ID and request acknowledgement by accepting the statement. Then, you can proceed to deposit the F&F amount into his account by cheque or NEFT.

In my opinion, even if the employee is terminated, he has to hand over company property before the FFS is made. In such a case, he has to spend for his onward and return travel.

On the other hand, if you feel that the property and documents are very important and has to be retrieved, you may opt to reimburse his travel expenses. If his FFS is higher than the property owned by him, he'll cover the excess spending himself.

Regards, M.V. Kannan

You can send F&F with a cheque through registered AD and put acknowledgment (Postcard revert back from the employee) as proof and bank credit statement too.

You mentioned that she was working in another state, outside of Rajasthan. Why not email her all the F&F details and request her to attend at your place at a predefined time, requiring her to bring along all the company belongings handed over to her from time to time?

In my opinion, the organization should be generous enough to pay for her travel expenses to and from the location since she is traveling from another state, especially considering that she is a female employee. This gesture, apart from establishing a professional practice, can enhance the sense of belongingness between employees and management.