How Should I Handle FNF Disputes When Management Refuses to Release Payments?

Hello HR folks, I have one query related to FNF.

Employee Issues with FNF Release

Our company has two employees who have resigned, but management is not ready to release their FNF for some reason. Please see the employee descriptions below:

1. The first employee resigned and served a 60-day notice period but was unable to provide a proper handover. At his end, a number of things are pending. He was adamant about getting the release, so management granted him permission with the condition that he support those specific projects when needed. One client fined the company around 3-4 lakhs for project delays caused by him. However, that employee did not support and is now requesting FNF. Management is unwilling to release his FNF. He is now following up on the FNF on a regular basis.

2. The second employee was asked to resign due to his poor performance. He completed the exit process correctly. Now, he is following up on FNF, and management is refusing to release his FNF, claiming that he did not perform. He worked in sales and was unable to generate revenue for the company, resulting in the refusal to process his FNF. Management wants both of them to be served with a legal notice for the company's financial loss.

Seeking Advice on FNF Resolution

Both ex-employees are following up on the FNF. Please advise me on what I should do in both of these situations. Is it possible for an employee to take action against the company for FNF? What steps should I take to resolve this problem?

Dear Jyoti Kotwal,

Comments on each case are as below:

Case 1: - The employee, after submitting their resignation, had a 60-day notice period. If there was a shortfall in their work, then what was their manager doing? Why was the employee not served a warning letter? As long as the employee is on the company's payroll, they are expected to serve diligently and faithfully. In case of any lapses, they should have been served a show-cause notice. However, the management allowed the employee to separate without addressing these issues. If the employee now asks for their rightful dues, what is wrong with that? While there may have been a lapse on the part of the employee, the manager and the management itself also bear responsibility.

Case 2: - Every employee is entitled to receive their salary and wages until their last working day. Under which law or act does the management intend to withhold the employee's salary? The management has already terminated the employee for underperformance, which is the highest form of punishment. There should not be any additional punishment. Indian jurisprudence stipulates only one punishment for one offense. No law allows for multiple penalties. It is advisable for the management to promptly release the employee's salary.

Thanks,

Dinesh Divekar

Salary Payment Obligations

If these employees were not under a managerial role, then you should pay the salary immediately. Failing to do so, they can approach legally. On the other hand, if they were in a managerial capacity, you can hold it but must inform them why the salary and other benefits payable are being kept on hold.

Legal Action for Gratuity

If the F&F includes gratuity payable, both categories of employees can file a suit for the recovery of the amount if the payment is delayed beyond 30 days of their exit.