• No full and final settlement after 8 months since resignation

I was working with a software company for 3 years. I resigned the company 8 months ago. I received the Relieving letter and Experience letter. The HR told me that full and final settlement would be done after 2 months according to company policy. But it's almost 8 months and no settlement has been done. They say full and final settlement of previous employees are still pending and they will be considered first. Every time the hr gives some funny reason as if it's my concern that the previous cases are pending. Can I send a notice to the company legally ? Is the company ignoring any law by delaying the fnf settlement.
Asked 3 years ago in Labour from Pune, Maharashtra
Dear Sir,

Withholding of terminal benefits (payments due at the time of full and final settlement) by the company (employer) is illegal as well as unjustified. In case of delay, an employee can legally claim an appropriate interest upon the delayed payments. It may be noted that there can be no such “policy” in terms of which the company can withhold your terminal benefits even for 2 months. In case any such “policy” exists, then that “policy” by itself is illegal and unenforceable in law. It may further be noted that pendency of clearance of payments of previous employees is no reason, much less a valid reason, to withhold your payments to which you are legally entitled too. You can, therefore, take a legal action against the company by sending a legal notice through a lawyer followed by a civil suit for recovery.

You may also like to know that Hon’ble Supreme Court of India in catena of cases has repeatedly emphasised the position that terminal benefits are no longer matters of any bounty to be distributed by an employer. Terminal benefits are valuable rights acquired by an employee and are, in fact, property in the hands of an employer. It has also been repeatedly held by the Hon’ble Courts that any delay in settlement and disbursement thereof has to be viewed seriously and dealt with severely by imposing penalty in the form of payment of interest. [For your reading - State of Kerala vs M. Padmanabhan Nair [(1985) I LLJ 530 SC]

Hope the query stands satisfied. For any further clarification / query please call / contact the undersigned.

Thanks & regards,
Anuj Aggarwal, Adv.
483, Block – II, Lawyers Chamber,
Delhi High Court, New Delhi – 110003
Mob – 09891403206
Email – adv_anuj@yahoo.com
Anuj Aggarwal
Advocate, New Delhi
2 Answers
2 Consultations
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