What is a Relieving Letter
You should ask for a relieving letter from a new employee to confirm (i) his official employment period, (ii) that he has has officially resigned, and (ii) that he has completing formalities before leaving his last organization including completing notice period and clearing dues, if any.
You should also issue relieving letter to any employee who resigns to formally communicate that he has been relieved of his duties and should clear all the dues, if any.
A formal process of asking for and issuing relieving letter makes your HR process of your nascent startup more robust and predictable.
First, relieving letter will help you filter out candidates with chequered employment history. You may not want to hire an employee with doubtful employment status at his organization(s). For some new hires, there could be some reasonable cases of conflict with past employers – you could consider that on a case-by-case basis.
Second, a formal process of issuing a relieving letter helps you ensure that an employee doesn’t suddenly stop showing up. Making a resigning employee serve a notice period of 30 days will help transition his duties to some other employee and avoid business disruptions. You also get some time to hire a replacement.
Is Relieving Letter Compulsory?
To comply with Shops and Establishments Act of most states in India, you should issue relieving letter to any employee who resigns.
What is difference between Relieving Letter and Experience Letter?
Both Reliving Letter and Experience Letter are official documents confirming employment status of an employee. Hence, format for both the letters are quite similar. However, their purpose vary a little. A Relieving Letter is issued to an employee who has resigned from your company, as a formal process for his full and final settlement with the company. An Experience Letter is issued to an employee who might still be working with your company or who might has resigned long ago. An employee may need an Experience Letter to apply for loans or to demonstrate his employment with your company to a new employer, long after he has quit your company.
Relieving Letter Format
______________ (Name of the employee)
______________ (Address of the employee)
This is with reference to your resignation dated ___________ from the position of _________________ (position of the employee).
Your resignation has been accepted by the Management, and you are relieved from the services of the Company with immediate effect.
We want to state on records that you had served the company from 12th February 2018 till ________.
An amount of Rs _________ towards full and final settlement of all dues to you is paid vide cheque _______ Dated ________ drawn on ________.
We wish you all the best for your future endeavors.
_________________________ (the Company Name)