Full-and-final settlement or relieving letter withheld

Section 17(2) of the Code on Wages, 2019 says that where an employee has been removed or dismissed, retrenched, has resigned, or became unemployed because the establishment closed, the wages payable must be paid within two working days of the removal, dismissal, retrenchment or resignation. The Code defines "employee" widely. Whether a particular senior or managerial role is covered can be checked with an advocate.

The two-day rule applies to "wages" as the Code defines them. Some items in a full-and-final settlement, such as gratuity, fall outside that definition and have their own timelines. Whether items like leave encashment or a contractual bonus count as wages for this purpose depends on the facts and how the Code's definition applies. This is still being argued.

A "relieving letter" or "experience letter" is mostly a matter of contract and company policy. For some establishments, standing orders under the Industrial Relations Code, 2020 may require the employer to give a service certificate when employment ends. Whether they apply depends on the size and type of the establishment and on whether the person is a "worker" under that Code. Disputes over notice periods, notice pay or recovery of company property often explain why an employer holds back a letter. Whether holding it back is lawful depends on the contract and the facts.

The authority that hears wage claims is appointed by the "appropriate government", so the office and procedure differ from state to state.

1. HR or management, in writing. A written request for an itemised full-and-final statement, the payment date, and the relieving or service document creates a record.
2. Labour department. A claim for unpaid final wages can be filed with the authority under the Code on Wages. The state government appoints authorities for most private employers. The central government appoints them for central-sphere establishments.
3. Labour department or conciliation officer about a service certificate or a dispute under standing orders, for "workers" in covered establishments.
4. EPFO grievance portal (epfigms.gov.in (opens in new tab)) if PF shown on your payslips wasn't deposited.
5. Civil court. Some employees, especially in senior roles, sue for dues or for a document under the contract.