Navigating Employee Final Settlements: How Do You Ensure a Smooth Process?

How do we make full and final settlements of employees?

To make full and final settlements of employees, HR typically follows a process that involves ensuring all outstanding dues, benefits, and obligations are settled with the departing employee. This process includes calculating and paying any remaining salary, benefits such as unused vacation days or bonuses, and settling any financial liabilities on both sides. HR also needs to collect company assets like laptops or access cards from the employee and ensure all necessary paperwork, including tax forms and exit interviews, are completed. It's essential to handle these settlements promptly and accurately to maintain positive employee relations and comply with legal requirements.

Full and Final Settlement of Employees

The full and final settlement of employees typically includes clearing dues such as unpaid salary, leave encashment, gratuity (if applicable), bonus, and any other reimbursements. It is processed after an employee resigns or is terminated, and the timeline for this can vary but is usually within 30 days. It also involves ensuring all company property is returned and any loans or advances are settled.

If any employee has mutually signed a confidential and service agreement not to leave the organization within the next two years and has deposited a sum of money by check in favor of the company, but then leaves the job without completing the exit formalities, such as the notice period and asset handover, thereby breaching the agreement, please suggest how we can recover the pending dues in this case.

The query is not clear as to whether the opinion is sought on behalf of the employee or management. Assuming it to be management, the first step is to block all and any payment due to the employee. Secondly, tabulate all the claims against the employee. Understand that regarding the amount for the unexpired period of the service agreement, only a proportionate amount vis-a-vis the whole period is to be reckoned. After tabulating recovery and payments due, send a recovery notice. Thereafter, you can seek the help of a local lawyer and initiate recovery proceedings in the local civil court.