What To Write For Claiming Full And Final Settlement From Employment

1st June- What to write for claiming Full and Final settlement from employment

Full and final settlement from employment – Meaning

When the employment of the employee terminates, it is time to get all the dues settled from the company. This whole process of money recovery from the employer is considered as the full and final settlement from employment.

The dues are the salary of the employee – it may be of one month or more than one month’s salary. The settlement may be carried out at the last day of the employment of the employer or at a later decided date.


Elements used to compute the final settlement

  • Unpaid salary including all (leave travel) allowances;
  • Arrears of salary (calculation – number of days for which salary is to be paid multiplied by the gross salary divided by 26);
  • Unpaid bonus;
  • Payment for unused leaves (calculation – number of days of unused leaves multiplied by gross salary divided by 26);
  • Gratuity (if the employee worked for more than 4 years and 240 days);
  • Pension (minimum 6 months of service with the current employer alongwith 10 years of pensionable service);
  • Deductions including profession tax, provident fund, income tax.


Period of settlement

Settlement process should commence atleast by the last working day of the employer because it would take around 30-45 days in the crediting of amount.

For gratuity, it may take upto 30 days alongwith bonus according to the specified year.


The basic steps to go for settlement

  1. Get all the formalities and clearances from all the departments (as per company policy);
  2. Keep a copy of all such clearances;
  3. If dues are still not credited, write to the HR department;
  4. If they do not respond in a few days, write to the HR manager;
  5. If still no response, forward the mail to the CEO and other top management people of the company;
  6. Last resort is the suit for money recovery under service law. Talk to an advocate.


Contents of the Letter to HR

  1. The letter should be addressed to HR alongwith the company name.
  2. Mention the subject “Full & Final Settlement of Dues”.
  3. State that you have not received the final salary dues and allowances and request for the same.
  4. Ending with regards, don’t forget to mention your name and address.


Important Things to Remember

  • The number “26” refers to the paid days in a month;
  • To show the 10 years of pensionable service, provide a scheme certificate after retirement (58 years of age);
  • Illegal termination of employment will definitely award you a lot of money. So if the termination notice was not on time or compensation is not adequate, you can claim all of them;
  • Conditions of illegal termination would also depend upon the terms and conditions of the employment contract.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s