How to do Full and Final settlement after furlough period in COVID times

Dear Community ,

WOULD YOU PLS steal the limelight ON MY below query ?

here I would like to have your valuable suggestion for the Win - Win situation for the employee and company .
case 1, we have put an employee on Furlough during the Covid , Since March till today we have put him on the same but now management /HOD decided not to call him back on the basis of his last performance , here contract says one month notice period … please share the process for FNFL SETTLEMENT IN THIS COVID PERIOD WITH NEW FORMAL LETTER PLEASE .

Regards ,


Hi Vineeta,

You can simply call him and inform him that due to business constraint post covid, currently the position you are working is redundant, thus we would like to part ways. Your dues (if any) will be cleared in 15 days time. You are required to submit the company assets & documents if any.

There is NO NOTICE PERIOD on either side.

But you should pay him Gratuity (if eligible) & other company benefits if any.


Hey Ankit ,

thanks for your inputs on the same , but please share while following this way ,will not get involved in any legal compliances later on .

regards ,


Hi Vineeta,

Such sudden removal from service on the alleged poor performance after a long period of furlough which is nothing but illegal lay off does not seem to me as either ethical or legal. On the moral side of the coin, it is certainly a bad HR practice without any humane consideration; on the legal side, it would tantamount to illegal retrenchment as it is violative of sec.25-F of the ID Act,1947 if the victim happens to be a workman as defined u/s 2(s) of the Act. Even otherwise if he happens to be a superior cadre employee, such an automatic termination clause in the contract of employment would be unconscionable and hence void as per the ratio decidendi of the judgment of the Apex Court in CENTRAL INLAND WATERTRANSPORT CORPORATION Vs BROJONATH GANGULY [ 1986 SCR(2) 278 ]. Therefore, try to settle the matter amicably by initiating a dialogue with the unfortunate employee and convince him for a settlement with retrenchment compensation as per the IDA,1947 OR some other reasonable sum which can sustain him till he finds an alternative job.


Furloughed employees will have employee rights and their general benefits. Decide where do you stand. Fair or unfair labour practise.

Case 1: For win-win situation look at these things…240 days, employee monitor-review feedback system of his performance. any document pertaining to promise of his job.

Case 2 : shake hand and say bye
Many times it is the managment that decides the nature of handling any employee grievance and not the rules and acts that are in force

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