Lawfarm Team
in Contracts Law Civil Law Arbitration and Mediation Labour Law
Asked May 26, 2016

Company not cooperating, I want my service certificate

  • 1 Answer
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I resigned from an organization a year ago, however I wasn't able to complete my FnF formalities, now I need the service certificate and the organization is asking me to pay 60000rs which I cannot pay, as its a huge amount. I worked for the company for 2 and a half years and company is denying to give the service certificate, though I have expressed that I want to get this settled at the earliest HR department is not helping at all. I want to know if there is a way to get this settled as soon as possible?

Answer 1

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Arushi Malik

There is no specific law framed by the government relating to FnF (full and final settlement) dues to be made to the employee/worker/officer that is not covered under any of the labour laws. The procedure for full and final settlement is fairly simple and as per the appointment contract.[1] As far as the period of settlement is concerned, going strictly by the rules, the final settlement needs to happen on an employee’s last working day at the organisation. However, as clearances take time, it is prevalent policy to do so within 30-45 days after the employee has left. For gratuity, the stipulation is 30 days after leaving the company, while bonuses must be paid within the specified accounting year. A common point of contention is the notice period. Even so, it is clear according to the law. Whichever party does not live up to the commitments in the contract will have to compensate the other.[2]

As it is clear, you should have completed your formalities at the time of resignation and whichever party does not live up to the contract will have to compensate the other. The amount of compensation has not been decided by any law, but by your contract. If you feel the compensation amount is too much then you should discuss it with the HR of your previous organisation and try and settle it amicably with them. Since, I am not aware of your contract details; you should look into your contact for an arbitration or mediation clause. If there is a clause for settling the disputes through arbitration or mediation then you can take recourse of that method as well to resolve your problem. Therefore, I do not think there is any other way to ensure their cooperation other than talking to them or through arbitration/mediation, if there is such a clause in your contract. [1] Usually following components are used to decide the sum:

>Unpaid salary and arrears, which is calculated as the number of days for which salary is to be paid multiplied by the gross salary divided by 26 (paid days in a month).

>Unpaid bonus

>Payment for non-availed leaves, which is calculated as the number of days of non-availed leave multiplied by basic salary divided by 26.

Apart from the usual components the following might be applicable:

>Gratuity, if four years and 240 days have been completed

>Pension, as long as the employee has completed at least 6 months of service with the existing employer and 10 years of pensionable service on providing a scheme certificate after retirement (58 years) age.

 

Sources:

Rituparna Chakraborty, “The Parting Cheque”, The Money Today, February 2013, available at http://www.businesstoday.in/moneytoday/cover-story/settling-final-salary-notice-period-before-leaving-a-job/story/192007.html (last visited on May 23, 2016)

 

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