How Should We Handle Full and Final Settlements for Non-Performing Employees?

If an employee is terminated due to any reason, in our case, it's non-performance, should the Full and Final settlement reason include the Date of Joining as April 26th, 2021, and the Date of Leaving (terminated on) as December 6th, 2021 (Total of 7 months)? Or can we issue a regular Full and Final settlement letter like we do for all other employees who resign after serving the notice period?

Performance Improvement and Resignation

It is not clear whether the organization has given the employee a reasonable opportunity to improve their performance-related issues. Even after providing such an opportunity, if the concerned employee has not been able to improve their performance level, it may be better to ask for their resignation. This can be beneficial for both the employer and the employee.

Full and Final Settlement

The Full and Final settlement should be conducted according to the organization's policy without depriving the employee. There is no need to serve the notice period if the employee was previously given time to improve their performance level.

Regards, S K Bandyopadhyay (WB, Howrah) CEO - USD HR Solutions [Phone Number Removed For Privacy-Reasons] [Email Removed For Privacy Reasons] www.usdhrs.in

Dear Colleague,

As rightly guided by our colleagues:

Performance Improvement Opportunities

- Kindly ensure you have given all reasonable opportunities to the employee to improve performance. Provide adequate time for the employee to explain his/her side regarding the performance challenges. If you have done so within the mentioned time period, it is not correct to refer to a "performance gap."

Concluding Services on Performance Grounds

If you have supported/provided every opportunity and have sufficient records to prove this, then if you decide to conclude the services based on performance grounds, consider it a win-win situation:

- Issue a separate letter outlining the performance gaps and state that the employee will be relieved from service on these grounds.
- However, in the full and final settlement (F&F) and relieving order, refrain from mentioning anything that could adversely impact the employee's future employment. Conduct a standard relieving process as documented in a separate letter to protect the management's interests.

Handling Full and Final Settlement Cheques

A former employee has stated that he will collect his Full and Final (FNF) cheque when he is available. What if three months pass and the cheque expires? Will it be the company's responsibility to reissue a new cheque? The former employee can't find one hour in his schedule to attend the FNF process.

Dear Colleague, keep that expired cheque for your records. Prepare a fresh cheque. If all dues are collected from the employee, then send the cheque by registered post or complete the F&F by online credit. There ends the job. Keep records for your reference and for any litigation later; you may produce this. The company will have thousands of other jobs than to follow someone for their F&F. In case the previous bank account was closed or if the cheque is also returned undelivered, then deposit the same to the Labour Authority who has jurisdiction under the Payment of Wages Act with details of the employee and other particulars in a clear letter. There ends our job as required by law.

Sayali,

This is 2021. Why are you making a cheque and asking him to collect it? You are asking why he can't take an hour to come and settle it, but to me, it looks like you are specifically harassing him. You want him to take time off from his current (new) employment, then travel (whatever time it takes him) to come and collect his FNF.

Either he is not bothered with your amount, or he does not have the time.

What stops you from:

a. Couriering the cheque (with proof of delivery obtained)

b. Asking him for his bank details (which you should actually already have) and remitting the money via NEFT/RTGS?

In either case, you can always send a WhatsApp or email to him informing him of the action taken and letting him know that since he has not come, this is the basis of FNF and it's the final settlement.

It would be a simple thing to do.