Why Does My New Company Insist on a 45-Day FNF Process? Seeking Your Insights

Dear Colleagues,

I was with a firm as HR Head, and we used to clear dues in 30 days, with the FNF letter being given on the last working day itself. The new company insists on a 45-day period, which I find illogical. Can you provide me with some recommendations as to why we have to follow the 45-day rule?

Dear Neha,

The policies and procedures differ from company to company. Some companies clearances within 7 days, while others take 45 days to complete formalities or to follow the TAT scheduled by them.

Thank you.

Dear Neha,

As Manoj has said, it is a company-specific rule. These rules are designed to ensure credit for the amount the company disburses to the exited employee. However, this is nothing but narrow-mindedness. Come what may, a few companies insist on getting credit, whether from their suppliers or employees who quit the company.

Proposing to reduce the TAT for the FnF

While proposing to reduce the TAT for the FnF, you may do it on the following counts:

a) With the onset of computerization and the usage of HRMS in companies, the TAT for FnF should have been reduced. But if it takes 45 days to clear the dues of an exited employee, then this shows that computerization or investment in hi-fi IT systems means nothing to the employees. We are still in the good old days of personnel management.

b) Delay in clearance of FnF dues erodes the brand image of the company. On the one hand, we talk about being employee-friendly, but as soon as an employee puts in their papers, we treat him/her as an outcast. Employees, whether current or former, are the brand ambassadors of the company. What they talk about the company in the job market matters a lot. To maintain our brand image, or to promote positive talk about us, timely clearance of the employee's dues is important.

c) Rather than fixing the time limit of 30 or 45 days, it is better to clear the dues along with the monthly salary. At whatever date an employee quits the company, what is wrong with crediting his/her salary along with the monthly salary? Payment of gratuity, if applicable, can also be paid along with the monthly salary. As employees give sufficient notice before they quit, why do we need 45 days for the clearance of the dues?

d) Last but not least, withholding the salary of the exited employee is illegal under the provisions of the Factory Act or Shops and Establishment Act. Why should we wait for objections from the Labour Officer? Suppose an employee were to make a complaint to the Labour Office, then we will not have any valid reason to give. For further queries, feel free to [contact me](https://drive.google.com/file/d/0BwFZpLigNaA5TnVXck53a1RycU0/view?usp=sharing).

Thanks,

Dinesh Divekar

I know of few companies that provide the Full and Final (FNF) cheque along with the relieving letter on the last working day of the departing employee. These employees often become brand ambassadors for such companies due to their positive experiences and good practices.

Mr. Dinesh Divekar has rightly said that it can be done with a monthly salary. To add on, not only the HR department but also the finance department, which ultimately takes care of payables, needs to be in sync with the requirements of HR and work towards smooth functioning. Delays not only attract litigation but also spoil the company's image. The dedication towards this requires direction from top management, who are ultimately responsible for overall functioning and brand building.

Regards,
Harpreet Walia