No Due Certificate Dilemma: Should I Sign When My Dues Are Unpaid?

I request the experts to clarify the use of a No Due Certificate. A company from Ahmedabad is asking me to sign a No Due Certificate, whereas they have not yet cleared my dues/receivables.

Understanding the No Due Certificate

As simple as that. You do not sign a No Due Certificate if dues are not fully paid. When an employee is separating from the organization, it is customary to settle all dues. There can be a mistake by anyone. Hence, many follow the practice that the organization prepares the full and final dues sheet and asks the departing employee to sign in token of acceptance of the calculation. If an employee finds that some dues are not paid, he/she can as well point that out to the employer, and the employer will rework the calculation. But in no case can one sign a paper to which he/she does not agree.

Regards, Vibhakar Ramtirthkar

Types of No-Dues Certificates

1. Dues to be paid by you to the company. Generally, a no-dues certificate is given by the employee through self-certification, stating that no physical damage or loss was caused to the company by the employee during their tenure with the company. Providing this certificate is harmless to the employee.

2. Dues to be paid by the company to you. A no-dues certificate issued by the company management to its employees clearly states that there is no outstanding payment to be made in terms of salary or other emoluments. The company management does not require the employee's signature for this certificate.

I have some doubts about some people asking these types of questions. It is easily understandable to the employee themselves or can be asked to the management about this. No problem, but it is a waste of precious time. Sorry, go ahead, please.

You can sign a no-dues certificate but mention on it - advance acknowledgment subject to clearance of dues.

Warm Regards,

Bharat Gera
HR Consultant

The director is not transferring my receivables and says (in an email) that I have to furnish a NO DUES DECLARATION first. Is it legal? I am at a loss.

Please provide guidance on the appropriate steps to take to recover the receivables promptly.

For details, I am attaching herewith the screenshots of the emails.

OK, sir, please send the no dues certificate they asked you for. Could you also let me know the format they requested so we can provide it accordingly? Thank you.

Communication with the Director

I have gone through the emails, and I would like to mention that your communication to the Director sounds impolite. I have already advised that there is no harm in signing an advance "no dues" receipt with a rider 'subject to payment of dues.'

Advance Receipts for PF and Insurance Claims

If you withdraw PF, you have to give an advance receipt. Even insurance claims receipts are signed in advance. If they do not intend to pay, they will not pay. But if they are committing to pay subject to signing the receipt, so be it.

Warm Regards, Bharat Gera HR Consultant