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Ashok Desai (Sr. HR)     14 November 2013

Query regarding relieving letter and continuity bonus

Hello,

 

I work as a HR in a co. Around a year ago, one of our employee who was on probation for 6 months, left without serving the notice period. Actually, we have a policy that every employee has to serve the probation period of 6 months and post probation, if the performance is found satisfactory than he/she will be made permanent or if the performance is not found satisfactory than probation period could either be extended or employment will end. 

In this employee case, we told him at the end of his probation period that your performance is not upto mark and we are extending your probation period for another 3 months, he did not accept it and he left the company from next day without even serving any notice period.  We also keep 2000k as continuity bonus for a year. and this amount is entirely released to employee once he/she completes one year with the company. This is explained during offer letter round and is mentioned in appointment letter as well and employee signs it as well. 

Now, all most after a year, he sends email and is asking for experience letter and the continuity bonus and we explained him that since he did not complete the one year so he/she is not eligible for bonus and also since he did not serve notice period, we cannot give him reliving letter, since he did not complete the job before leaving and just left like this.

 

He is threating us to take this matter in labour court. Just wanted to ask, where do we stand, are our policies correct or is employee correct? Basically, the employee has signed the appointment letter which has all these clauses, so if he/she signs it and does not follow, do employer is to be blamed. please suggest.
 

 



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 2 Replies

Ashok Desai (Sr. HR)     14 November 2013

Did you mean NOT pay him in the below sentence, correct?

"you need pay him any such bonus since he has not completed one year in the company."

 

Thanks for the advice, appreciated.

Kumar Doab (FIN)     14 November 2013

 

Hope you will take the discussion positively.

 

 

This is an interesting thread. We are trying to discuss the matter from another perspective.

HR should be unbiased and must adopt a balanced approach, should always advice the employer and employee properly, and should not act in haste.

 

The employer’s are known to set the policies and KRA’s for HR personnel also.

If there are faults in the policies of the employer set for HR to peruse then HR should prompt the employer and must not enforce decisions that may boomerang.

 

However majority of the matters can be resolved by applying sense and prudence and may not warrant a legal approach.

 

Neither Agreement nor and appointment letter can override the standing orders.

 

The notice period in case of this employee during probation period may not be necessarily applicable. If the notice period is not applicable then notice pay may not be adjusted in FNF statement.

 

Notice period is part of service conditions and is stated in standing orders applicable to the company, statue, appointment letter, service conditions, contract of employment………………………….and is also stated in Shops and Commercial Act…………..applicable to such establishments.

 

The notice period during period of probation has been discussed in many threads a e.g;

 

https://www.lawyersclubindia.com/forum/Whether-notice-period-has-to-be-given-during-probation-91808.asp#.UoSg3nCAqWM

 

 https://www.lawyersclubindia.com/forum/Notice-period-92146.asp#.UoTD33CAqWM

 

https://www.lawyersclubindia.com/experts/Different-notice-period-for-employee-and-employer-during-probation-432151.asp#.UoTGvHCAqWM

 

You may find these relevant.

 

1. Do you have a transparent system of appraisal and appraisal forms/formats? Do you keep the process of appraisal and policy guidelines in the knowledge domain of the employee?

 

During the period of probation the employee is to be coached, mentored, guided, trained and supported to deliver as per expectations of the employer. If company has not informed him ever in writing during the entire period of probation on expectations/areas of improvement and after the expiry of the probation period just called him and informed him verbally regarding the extension then style and function of company is not proper, transparent and appreciable too.

 

If you have provided him the copy of the appraisal done by the officials of the company with him and have issued letter extending the probation period then you have properly informed him on the merits and reason for extension of period of probation.

 

The verbal news was a rude shock to the employee.

This employee has taken the decision by not agreeing to accept the extension in probation period.

His decision may not be necessarily unwise.

 

This employee has replied verbally to your verbal communication:

-- by telling you that he is not accepting the extension.

-- and that he has decided to separate.

 

Separation is prerogative and pleasure of both employer and employee. Resignation can be without permission or notice.

 

The employee should certainly have resigned in writing. He might have submitted resignation by post, subsequently.

 

2. After the employee has replied to you in office have you issued any communication to him in writing by effective modes of communication e.g redg. post that his FNF statement is attached and he has to tender amounts etc……………….?

 

Did you ask him to visit and handover the charge?

 

3. Did you inform him that subsequent to his verbal communication of resignation in office he has not submitted resignation in writing?

If the employee abstained, absented, absconded did you follow the procedure before effecting termination? Did you terminate the employee?

 

4. Even if the employee stands terminated the employer has to tender the ‘Service Certificate’.

 

After 1Y the employee has asked in writing by email for ‘Experience Certificate’/‘Service Certificate’.

 

It is felt that you have replied in writing denying the ‘Relieving letter’. In administrative language both can be treated differently and as two different documents.

 

You are not aware that as per standing orders the service certificate should be issued to all employees.

 

Probably you are treating the relieving letter as service certificate.

 

 

Model Standing Orders:

 

13.                            Termination of employment: (2)      …………….no probationer … shall be entitled  to any notice or  pay in lieu thereof if his services are terminated…..

        (3)   Where the employment of any workmen is terminated, the wages earned by him and other dues, if any, shall be paid before the expiry of the second working day from the day on which his employment is terminated.

        16.  Certificate on termination of service.--Every permanent  workman shall be entitled to a service certificate at the time of his dismissal, discharge or retirement from service.

 

NOTE. - There is a provision under  this  Act for issuing a service certificate at the time of  dismissal, discharge or retirement and every person is entitled to take such certificate.

17.                            Liability of 17[employer].--The [1][employer] of the establishment shall personally be held responsible for the proper and faithful observance of the standing orders.

 

5. It is agreeable that this employee is not eligible for continuity bonus but he may be eligible for statutory bonus.

 

If eligible you may pay him the statutory bonus.

 

6. Reliving letter signifies that nothing is due towards employee. You may properly inform him the amounts if any he owes to the company and supply him the copy of correct FNF statement and POD vide which it has already been supplied to him.

The day for payment of FNF wages is also last day in office, within next 2 days or max. by usual pay day.

 

7. The private policy, agreement, special agreements of the company signed with employee can not override the standing orders, enactments applicable to the company, statues, law of the land, sense and prudence too.

 

The standing orders applicable to the establishment are inviolable. The employer and establishment is liable for faithful observance of the standing orders.

The enactments applicable to the company can not be violated by employer.

 

 

8. If the employee has written that he may approach a lawful authority/court of law it can not be termed as a threat. Any one who is aggrieved can approach state and court of law.

 

After all Court and State are ‘Parens Patriae’ ::::: Parent to the Nation.

 

As HR personnel you should be able to distinguish between intimation, notice and threat.

 

If intimating someone that the lawful authority or court of law shall be approached, is a threat then the HR personnel, legal cell personnel of the companies that issue notices, legal notices can also be accused of giving threat …………….

 

8. Only a few employees would approach Labor officials, state and some are known to approach police, trade unions, their lawyers, and so on………………..

This employee has for sure consulted and is now properly informed.

 

The matter seems to as simple as that probably this employee is finding it difficult to settle down in his life and career without relieving letter. Probably he has financial constraints too.

 

It is a fact that he has been employee of your establishment. You may issue service certificate quoting name, father’s name, designation, DOB/address as per your record, tenure of service…………………..and other points as stated in ‘Service Card’………………………………….Remember there is a provision of stating commendations but no provision for stinkers in ‘Service Card’………………………….

 

During reference check or BGV also sensible employers and HR personnel restrict themselves and either reply telephonically only or deny to reply and reply by quoting above mentioned points only.

 

Negative comments are onus and responsibility of the person that has issued the comments.

 

Employer can waive off the notice period.

 

It shall be better if the matter is resolved without any heartburn to anyone.

 Call him provide the FNF statement, service certificate/relieving letter, if possible waive off the notice period or ask to pay FNF amounts to company and close the matter without any bad publicity.

 

 

 

9. Once your analysis is that your viewpoint is right and substantiated then you may peruse the decision that is beneficial for all  as per your viewpoint and proceed as deemed fit as your end.

 

 

 

 

 



 

Attached File : 554204690 model standing orders industrial employment standing orders rules.pdf downloaded: 106 times

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