Hi all,
I have a question regarding FNF (Full and Final) settlement policies.
I left my previous company over 45 days ago, but my FNF is still not cleared. The company is stating that some clients I was handling have not made their payments, and therefore my dues are being held back. They mentioned in my KRA letter that if clients default, my payment may be withheld.
I wanted to check—is it legally or ethically acceptable for a company to hold an employee’s FNF due to pending client payments? Once I’ve left the organization, am I responsible to get the payments?
Would appreciate any insights or guidance on how to proceed in such a situation.
Thanks in advance!
From India
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I have a question regarding FNF (Full and Final) settlement policies.
I left my previous company over 45 days ago, but my FNF is still not cleared. The company is stating that some clients I was handling have not made their payments, and therefore my dues are being held back. They mentioned in my KRA letter that if clients default, my payment may be withheld.
I wanted to check—is it legally or ethically acceptable for a company to hold an employee’s FNF due to pending client payments? Once I’ve left the organization, am I responsible to get the payments?
Would appreciate any insights or guidance on how to proceed in such a situation.
Thanks in advance!
From India
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In this situation, it's crucial to understand the legal aspects and your rights as an employee. Here are some practical steps to consider:
1. Review Employment Contract: Check your employment contract or company policy regarding FNF settlements. Look for clauses related to client payments affecting your dues.
2. Consult HR or Legal: Reach out to HR or legal department for clarification on the company's stance. Seek information on the legality of withholding your FNF in such circumstances.
3. Labor Laws: If necessary, refer to relevant labor laws or regulations that govern FNF settlements. These laws may outline the employer's obligations and your rights as an employee.
4. Negotiation: If the company's actions seem unfair or unjust, consider negotiating with the management. Present your case professionally and seek a resolution through dialogue.
5. Escalation: If internal discussions do not yield results, consider escalating the matter to higher authorities within the company or seek guidance from labor authorities or legal counsel.
Remember, FNF settlements are crucial for both parties, and it's essential to ensure fair treatment based on legal requirements and company policies.
From India, Gurugram
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461. Review Employment Contract: Check your employment contract or company policy regarding FNF settlements. Look for clauses related to client payments affecting your dues.
2. Consult HR or Legal: Reach out to HR or legal department for clarification on the company's stance. Seek information on the legality of withholding your FNF in such circumstances.
3. Labor Laws: If necessary, refer to relevant labor laws or regulations that govern FNF settlements. These laws may outline the employer's obligations and your rights as an employee.
4. Negotiation: If the company's actions seem unfair or unjust, consider negotiating with the management. Present your case professionally and seek a resolution through dialogue.
5. Escalation: If internal discussions do not yield results, consider escalating the matter to higher authorities within the company or seek guidance from labor authorities or legal counsel.
Remember, FNF settlements are crucial for both parties, and it's essential to ensure fair treatment based on legal requirements and company policies.
From India, Gurugram
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Legality of the offer and contract of employment will depend on the employee category with regard to his functions, duties and responsibilities. If you were given managerial powers, like, authority to supervise subordinates, authority to sanction leaves of subordinates, authority to appraise performance of subordinates or authority to initiate disciplinary action against your subordinates, then you will come under the managerial category. Then you are bound by the contract of employment. On the other hand, if you did not have any of these rights or supervisory powers, then you would fall under the scope of workman under Industrial Disputes Act and then you will get the protection of the ID Act. In case your dues are not paid, you can approach the authority concerned and recover it.
But the main issue is with the Act (Payment of Wages Act, 1936) which says that the dues payable to an employee who has left the establishment should be paid within 48 hours. The issue is that the Act covers only those employees whose wages are not more than Rs 24000. Obviously, most of the employees would be above this limit. If your salary exceeds Rs 24000, then you may not be able to approach the Inspector under the Payment of Wages Act. At the same time, if you were a workman as described above, you can approach the Conciliation officer under ID Act, and initiate recovery under section 33 of the Act. it is again a lengthy process.
In any case, non payment of wages/ salary on account of non payment of bill amount by the customers of the company is not acceptable. It is accepted norms that a contract of employment extending beyond the termination of the contract is void. In this case, holding salary by enforcing a clause in the contract that the employee is responsible for the amounts due from his clients is actually extending the contract after termination of the same. Hence it is illegal.
From India, Kannur
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But the main issue is with the Act (Payment of Wages Act, 1936) which says that the dues payable to an employee who has left the establishment should be paid within 48 hours. The issue is that the Act covers only those employees whose wages are not more than Rs 24000. Obviously, most of the employees would be above this limit. If your salary exceeds Rs 24000, then you may not be able to approach the Inspector under the Payment of Wages Act. At the same time, if you were a workman as described above, you can approach the Conciliation officer under ID Act, and initiate recovery under section 33 of the Act. it is again a lengthy process.
In any case, non payment of wages/ salary on account of non payment of bill amount by the customers of the company is not acceptable. It is accepted norms that a contract of employment extending beyond the termination of the contract is void. In this case, holding salary by enforcing a clause in the contract that the employee is responsible for the amounts due from his clients is actually extending the contract after termination of the same. Hence it is illegal.
From India, Kannur
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Looking at your situation, it seems that you're caught in an unfortunate position. However, as the reply has rightly pointed out, withholding of Full and Final settlement due to non-payment by clients is neither legally nor ethically acceptable. This is especially true after the termination of your contract.
Pay close attention to your role in the company. If you were a manager with certain authorities, you're bound by the contract of employment. However, if you were a workman, you have some protections under the Industrial Disputes Act. If your dues haven't been paid, you can approach the relevant authority.
Remember that the Payment of Wages Act, 1936 mandates that dues payable to an employee who has left the establishment should be paid within 48 hours. But this is applicable only if your wages do not exceed Rs 24,000. If it does, you may not be able to approach the Inspector under this Act. If you were a workman, you can approach the Conciliation Officer under the ID Act and initiate recovery under Section 33 of the Act. However, keep in mind that this is a lengthy process.
A clause in the contract that makes the employee responsible for amounts due from clients, extending the contract beyond its termination, is illegal.
Here are some steps you can take to address this:
1. Review your employment contract: Go through all the clauses carefully, especially those related to payments and dues.
2. Consult a legal expert: If you're unsure about the legality of any clause, seek professional legal advice.
3. Approach the relevant authority: If you were classified as a workman, you can approach the Conciliation Officer under the Industrial Disputes Act.
4. Maintain communication: Keep in touch with your former employer and express your concerns clearly and formally.
5. Document everything: Keep a record of all your interactions with the company regarding this issue.
I hope this information helps you navigate your situation. Good luck!
From India, Gurugram
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Pay close attention to your role in the company. If you were a manager with certain authorities, you're bound by the contract of employment. However, if you were a workman, you have some protections under the Industrial Disputes Act. If your dues haven't been paid, you can approach the relevant authority.
Remember that the Payment of Wages Act, 1936 mandates that dues payable to an employee who has left the establishment should be paid within 48 hours. But this is applicable only if your wages do not exceed Rs 24,000. If it does, you may not be able to approach the Inspector under this Act. If you were a workman, you can approach the Conciliation Officer under the ID Act and initiate recovery under Section 33 of the Act. However, keep in mind that this is a lengthy process.
A clause in the contract that makes the employee responsible for amounts due from clients, extending the contract beyond its termination, is illegal.
Here are some steps you can take to address this:
1. Review your employment contract: Go through all the clauses carefully, especially those related to payments and dues.
2. Consult a legal expert: If you're unsure about the legality of any clause, seek professional legal advice.
3. Approach the relevant authority: If you were classified as a workman, you can approach the Conciliation Officer under the Industrial Disputes Act.
4. Maintain communication: Keep in touch with your former employer and express your concerns clearly and formally.
5. Document everything: Keep a record of all your interactions with the company regarding this issue.
I hope this information helps you navigate your situation. Good luck!
From India, Gurugram
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(Fact Checked)-Your explanation is accurate and well-detailed, especially the part about the Payment of Wages Act, 1936 and the illegality of extending a contract post-termination. Great job! (1 Acknowledge point)