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Ours is a small manufacturing company with a workforce of 50 employees. One of our old employees (with more than 5 years of service) wants to resign and then rejoin with a new appointment. His contention is that he needs money. This employee is the most experienced in his role, which required sustained training. Although we have doubts about him leaving our company, we have not been able to determine the truth.
We want to support him at face value but also want to safeguard the company's interests. How can we bring out the truth when he is not sharing his inner thoughts even during regular communication?
What actions should we take to prevent him from leaving the company after receiving his dues? Your guidance on this matter would be greatly appreciated.
Thanks and Regards,
Chetna
From India, New Delhi
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Ours is a small manufacturing company with a workforce of 50 employees. One of our old employees (with more than 5 years of service) wants to resign and then rejoin with a new appointment. His contention is that he needs money. This employee is the most experienced in his role, which required sustained training. Although we have doubts about him leaving our company, we have not been able to determine the truth.
We want to support him at face value but also want to safeguard the company's interests. How can we bring out the truth when he is not sharing his inner thoughts even during regular communication?
What actions should we take to prevent him from leaving the company after receiving his dues? Your guidance on this matter would be greatly appreciated.
Thanks and Regards,
Chetna
From India, New Delhi
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He needs money - Is it the only reason for him to resign? If you truly wanted to retain him, announce an incentive program for all the employees whose tenure is good. You could also talk to the management about considering a good hike for employees whom you think would be critical to running a few important tasks. Simply pleasing him with a hike or a bonus may demotivate other employees, so it's better to consider all the employees rather than just focusing on him alone.
Why does he want to join you back? Doesn't he have any other opportunities elsewhere with his experience and knowledge? Is he targeting his gratuity? If so, I don't think it is that significant. Does your company offer any other benefits compared to your competitors? Just think about this, and you would understand.
No employee would be willing to give you the exact reason for moving out. Please do not expect anyone to disclose it, and you cannot expect that from the employee. Paying the employee does not give you the right to interfere in his decisions if he does not permit you to do so.
Thanks,
Priya
From India, Madras
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41Why does he want to join you back? Doesn't he have any other opportunities elsewhere with his experience and knowledge? Is he targeting his gratuity? If so, I don't think it is that significant. Does your company offer any other benefits compared to your competitors? Just think about this, and you would understand.
No employee would be willing to give you the exact reason for moving out. Please do not expect anyone to disclose it, and you cannot expect that from the employee. Paying the employee does not give you the right to interfere in his decisions if he does not permit you to do so.
Thanks,
Priya
From India, Madras
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Thanks for your quick reply. Kindly suggest whether:
Is it legal to have him sign a bond for his continuation with the company?
Is it a common practice to use PF and gratuity in the said manner?
The market scenario is not great, and there is groupism and regionalism associated with this case. We are already paying the best in the industry with many benefits like uniforms, meals, and other employee benefit schemes.
Your valued feedback is greatly appreciated.
Regards
From India, New Delhi
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Is it legal to have him sign a bond for his continuation with the company?
Is it a common practice to use PF and gratuity in the said manner?
The market scenario is not great, and there is groupism and regionalism associated with this case. We are already paying the best in the industry with many benefits like uniforms, meals, and other employee benefit schemes.
Your valued feedback is greatly appreciated.
Regards
From India, New Delhi
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Chetana7426,
What are the qualifications of the employee, their age, years of service with you, salary, current designation, role, responsibilities, and any other designation? Please share more inputs to help in decision-making.
From India, Pune
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What are the qualifications of the employee, their age, years of service with you, salary, current designation, role, responsibilities, and any other designation? Please share more inputs to help in decision-making.
From India, Pune
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He may be offered loan, interest free or min interest rate, from the company at to meet his requirement.
From India, Mumbai
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From India, Mumbai
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The company is considering offering him an interest-free loan. The employee in question has just finished paying off his earlier loan. It has been our company policy to support our workers, as most of them come from rural backgrounds and may not be educated enough.
However, sometimes it seems that they have taken this support for granted and show resentment by not working efficiently if it is denied (though this is only the case in a few instances). The employee in question is a graduate and has been working with a simple design software. His salary is quite generous compared to his responsibilities and the market. We have been developing and supporting him throughout his five years with us, and he has been performing well during this time.
Recently, a few of his friends have left the company and joined elsewhere. His performance over the past six months has not been satisfactory, possibly due to family issues. Could a bond or legal note be created when providing him with a loan? How can the company's interests be safeguarded in resolving this matter?
Regards
From India, New Delhi
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However, sometimes it seems that they have taken this support for granted and show resentment by not working efficiently if it is denied (though this is only the case in a few instances). The employee in question is a graduate and has been working with a simple design software. His salary is quite generous compared to his responsibilities and the market. We have been developing and supporting him throughout his five years with us, and he has been performing well during this time.
Recently, a few of his friends have left the company and joined elsewhere. His performance over the past six months has not been satisfactory, possibly due to family issues. Could a bond or legal note be created when providing him with a loan? How can the company's interests be safeguarded in resolving this matter?
Regards
From India, New Delhi
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An undertaking should be taken from him that loan money will be adjusted against his gratuity/salary in case he is unable to liquidate prior to leaving the company or retiring. Furthermore, he can be appraised to improve efficiency post loan sanction, helping to solve his financial problems.
From India, Mumbai
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From India, Mumbai
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Subject: Re: Employee Wants to Resign and Then Rejoin to Encash His PF and Gratuity Dues
Financial worries may cause problems in performance. Provide him with financial support (loan) and start deducting a monthly installment against the financial help. This will help him realize that you have assisted him. Also, issue him an expectation letter where you can mention his best performance required for the company. I hope this will enhance his performance.
SDP
From India, Kolhapur
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Financial worries may cause problems in performance. Provide him with financial support (loan) and start deducting a monthly installment against the financial help. This will help him realize that you have assisted him. Also, issue him an expectation letter where you can mention his best performance required for the company. I hope this will enhance his performance.
SDP
From India, Kolhapur
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It is usually observed that employees in financial problems approach with a loan request. In this case, a request for PF withdrawal indicates the employee is either planning to join your direct competitor or start out on his own and towards this is trying to circumvent the possibility of the organization delaying his PF transfer/withdrawal as the case may be. The best option would be to counsel the employee to understand his real issue and offer him an interest-free loan with agreed deduction from salary and other dues accrued.
From India, Mumbai
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From India, Mumbai
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Dear friends, as rightly said, an employer has to extend financial help to such a needy employee, but if the intention of the employee is to leave the company, one cannot stop him. Of course, the inner view of the employee can be known through indirect inquiry from coworkers close to him. Allowing resignation and rejoining of an employee is not a healthy practice for the organization. Sanctioning a 'Special loan' and adopting recovery methods can be beneficial. This practical view has been experienced and may be helpful to some extent.
Best wishes,
Eswararao Ivaturi
From United States, Cupertino
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Best wishes,
Eswararao Ivaturi
From United States, Cupertino
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Chetan,
I assume your company has already made a certain decision.
However, to have a comprehensive discussion, I will provide a different perspective.
1. An employee resigning will be eligible to withdraw his PF after 2 months. He can't apply for it immediately as the department needs to verify that he is not going to work elsewhere. I am not sure if this is a rule or a general practice followed by the department.
2. If he rejoins, you must inform the PF department about his return. Unless he has already withdrawn his PF (which could take up to 6 months), you will have to assign the same number. If a different number is provided, you must request the transfer of his existing balance from the previous account. Once this is done, his PF withdrawal will cease.
3. How long of a salary gap is he willing to endure? It seems someone may have misled him regarding using PF and gratuity to meet his financial obligations, requirements, or even for investment elsewhere.
4. Providing a loan is an option, but there are risks associated with this approach. The employee may abscond with the outstanding loan amount. Additionally, please note that as per the Payment of Wages Act, a loan cannot exceed 4 months' salary (referred to as an advance in the act).
Granting loans should not become a routine practice. Breaking such a habit can be challenging.
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I have corrected the spelling, grammar, and punctuation errors in the text while ensuring proper paragraph formatting and line breaks. The original meaning and tone of the message have been preserved.
From India, Mumbai
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I assume your company has already made a certain decision.
However, to have a comprehensive discussion, I will provide a different perspective.
1. An employee resigning will be eligible to withdraw his PF after 2 months. He can't apply for it immediately as the department needs to verify that he is not going to work elsewhere. I am not sure if this is a rule or a general practice followed by the department.
2. If he rejoins, you must inform the PF department about his return. Unless he has already withdrawn his PF (which could take up to 6 months), you will have to assign the same number. If a different number is provided, you must request the transfer of his existing balance from the previous account. Once this is done, his PF withdrawal will cease.
3. How long of a salary gap is he willing to endure? It seems someone may have misled him regarding using PF and gratuity to meet his financial obligations, requirements, or even for investment elsewhere.
4. Providing a loan is an option, but there are risks associated with this approach. The employee may abscond with the outstanding loan amount. Additionally, please note that as per the Payment of Wages Act, a loan cannot exceed 4 months' salary (referred to as an advance in the act).
Granting loans should not become a routine practice. Breaking such a habit can be challenging.
---
I have corrected the spelling, grammar, and punctuation errors in the text while ensuring proper paragraph formatting and line breaks. The original meaning and tone of the message have been preserved.
From India, Mumbai
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Early PF withdrawal won’t be easy.pdf
Employee Benefits.doc