When an Employee Gets Severance Pay, What Should Their Official Relieving Date Be?

Hi, I am in need of some clarity on what should be the relieving date of an employee who is being given severance pay of one month. This employee was terminated on 31 July and is being given a one-month severance pay. Will his relieving date be 31 July or 30 August? Thank you for your help.

Severance Pay and Employee Exit Date

The severance pay is compensation for termination. It is not remuneration for services rendered. Therefore, the date of relieving and exit date should be 31st July only. From 1st August onwards, he is not an employee of your establishment, and there will be no legal relationship between the employer and the employee. No PF or ESI is deductible from severance pay since the amount is not remuneration for work. Therefore, putting the date of 31st July as the exit date will in no way affect the PF/ESI.

Hello, will you clarify whether the ex-employee was stopped from work effective 31st July 2024 (being the last working day) or 30th August 2024? Did he attend duty (not allowed to report) after 31st July? If not, then he will be treated as "relieved after the close of office hours on 31st July 2024."

31st July was the last working day. Thanks for the explanation.

The last date of this ex-employee will be 31.7.24. As the company wants to end by 31/7/24, for this reason, the company is paying up to 30.8.24 in lieu of notice. He should not be allowed to work after 31st July. If he is still in service after 31/07/24, pay for the days his services were taken through a miscellaneous bill. He should be treated as "relieved after the close of office hours on 31.7.2024."

Hi, You terminated him on 31.07.2024, and as a result, you provided him with compensation. The relationship between the employee and employer ends on 31.07.2024 itself. If you indicate any other date, there will be no validity to the termination, and the employee will have every right to return to duty.

I'm not clear regarding the said 'severance pay' of one month that Roshini stated in the post dated 2.8.24. Does it represent 'the notice pay of one month' or the 'compensation for termination'? I understand both are different, apart from the FnF settlement, of course.