F&F Settlement Dilemma: Do We Owe Payment After Immediate Termination for Non-Performance?

Respected Professionals,

F&F Settlement in Case of Termination

I want to know regarding the full and final (F&F) settlement in the case of termination. We terminated an employee immediately due to non-performance. He was still on probation, but even after warnings, his performance did not improve. While processing his full and final settlement, we found that he did not fill out his timesheets for the single day he was in the organization (this is one of our policies to fill timesheets timely).

So, in this case, is the company bound to pay his full and final amount? Also, I would like to know what the mail content could be to inform him about the same.

Waiting for a prompt response.

Performance Expectations and Termination

The newly appointed employee did not perform to the expectations of the company. For this underperformance, your company has terminated the employee. However, the question arises as to whether you had communicated in writing what the performance expectations were and if he accepted this official notice.

Justification for Withholding Dues

Secondly, if the employee did not meet your performance requirements, then you have already imposed a punishment. However, there can only be one punishment for one misconduct. "Termination from employment" is the most severe punishment. So, where is the justification for withholding the employee's dues? Why consider giving an additional punishment for the same misconduct? This goes against the principles of natural justice.

Timesheet Completion and Responsibility

If the employee failed to fill in the timesheets, when was this discovered and by whom? Did the employee's reporting manager or supervisor bring this to the authorities' attention? If the timesheets were not completed on time, was an official warning issued to the employee in question? If not, who is at fault? Is it the defaulting employee or his seniors?

In summary, I recommend that you pay the employee his dues up to his last working day and close the matter. Regardless of the type of misconduct, every employee is entitled to receive their salaries and wages until their last working day.

Thanks,

Dinesh Divekar

During probation, if the employee is covered under the definition of "workman" under Section 2(s) of the Industrial Disputes Act, 1947, and has completed 240 days, they are entitled to be paid retrenchment compensation simultaneously with the act of termination. Employers must comply with this legal requirement. I hope that when you terminated his services, he had not completed 240 days in your organization.

Regards, S. K. Mittal
[Phone Number Removed For Privacy-Reasons]

Denial of F&F Benefits for Not Filling Timesheets

The denial of F&F benefits for not filling out the timesheet is not proper and justified. Filling the timesheet is meant to indicate the amount of time spent on each job assigned. It is not the only job the employee was assigned. Therefore, you need to either construct his timesheet or presume, in general, that he has worked on all the days and pay accordingly. The principle of 'no work, no pay' is not applicable here unless you can show that the employee has not done any work, as is evident from his timesheet.

Before drawing a conclusion, you need to seek the views of the concerned employee. You can write, stating that while considering F&F settlement, it is noticed that the time logs are empty and there is no account of the work done since [date]. In the absence of such details, it is not possible to consider the payment of any compensation or benefit.

Dear Madam, you will appreciate that the subject of an employee's termination is to be handled carefully.

Termination During Probationary Period

Simple termination during the probationary period is subject to the notice period stipulation in the appointment letter as well as following the due process of law, particularly if the termination is due to any misconduct or performance issue, as in your case.

It is not clear from your post whether you paid due attention to both. There is an impression that perhaps you acted hastily in the termination process.

Termination Practices

Normally, a probationer is terminated for any reason whatsoever on the last day of the probation period to avoid legal complications. Another HR practice is to obtain his/her resignation, allowing them to leave without any blemish on their career.

You mentioned that you had warned the probationary employee about unsatisfactory performance. I hope you did so in writing and also for not maintaining the timesheets.

Full and Final Settlement

Regarding his Full and Final (F&F) settlement, you should proceed to pay all his dues if he has worked for the full period. For his alleged non-submission of the timesheets, he cannot be solely blamed as there are also laxities on your part.

It would have been legitimate to withhold the F&F settlement if the employee's conduct had caused any monetary losses, which does not seem to be the case here.

Regards,

Vinayak Nagarkar HR and Employee Relations Consultant

Mr. Vinayak and Mr. Divekar have clearly and concisely addressed the query.

Non-filling of timesheets

Non-filling of timesheets is not a significant issue to withhold F & F.

Monitoring and cautioning

Non-submission of the daily timesheet should have been monitored, and the employee cautioned by the immediate supervisor or superior.

Appointment letter and probation period

A lot depends on your appointment letter and the terms of the accepted probation period norms.

I do hope the company has followed the norms of notice and counseling during probation and, still seeing no improvement, terminated him.

Organizational responsibility

Individual employees make mistakes, but the organization, with its own checks and counterchecks, is expected to be more correct and complete in its responsibilities.

HR practices and withholding F & F

Paying F & F will be a good HR practice and will elevate the company's reputation as one that honors its responsibilities towards employees. Withholding should be only as a last resort with absolutely documented reasons that are justifiable in a court of law.

In all fairness and professional ethics, and legally, you are bound to carry out the full and final settlement of the account and pay the dues as per the terms of the appointment/contract/agreement, including any applicable compensation.

Best Wishes,

Syed Arshad H. Rizvi

A good query, Nidhi, and a valuable contribution by the team. I share the same view as already expressed above. In all fairness and ethics, an employee on probation or otherwise cannot be deprived of fair treatment, and their full and final settlement cannot be withheld. Of course, for reasons of non-performance, a probationary employee may be terminated immediately. Not filling out a day's timesheet does not justify any reason to withhold the final settlement.

Regards,
Brijesh Jadhav

Please refer to the appointment letter of that employee (ensure the employee has also signed it). The clause regarding termination is mentioned in the appointment letter. Generally, the employee is placed on probation for 6 months or one year. This will serve as evidence in case of any dispute, as the employee has given their consent to these terms.

Hi Nidhiji, what are the conditions prior to the issuance of the appointment letter? Have you covered the points mentioned above? In case of underperformance, the recruit will be terminated without any Full and Final (F and F) benefits. Did he agree to this?

According to labor laws, he is entitled to receive Full and Final (F n F) benefits after being terminated by the company itself. The failure to fill in the day work slips should not be a reason for denying him his Full and Final dues; it is solely an internal matter for your company's administration.

Can the company simply state, "He has not fulfilled his duties by not completing the day work sheets, therefore we are not obligated to provide payment"? This statement is not accurate. Please ensure all Full and Final dues are settled promptly to avoid any further issues.

Kindly clear all Full and Final dues and provide the necessary relief.

Thank you.