The Discontinuance of Service Letter is a critical document in Indian employment law, used when an organization needs to formally terminate an employee's services. This document can be issued in various circumstances, including voluntary resignations, performance-based terminations, redundancy, or organizational restructuring. It must comply with Indian labor laws, including the Industrial Disputes Act 1947, state-specific Shops and Establishments Acts, and other relevant employment regulations. The letter typically includes essential information such as the effective date of termination, notice period details, final settlement calculations, and post-employment obligations. A properly drafted Discontinuance of Service Letter helps organizations maintain legal compliance, avoid potential disputes, and ensure a clear record of employment termination terms.
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1. Letter Header: Company letterhead, date, reference number, and addressee details including employee name, ID, designation, and department
2. Subject Line: Clear indication that this is a Discontinuance of Service letter
3. Opening Statement: Reference to relevant previous communication (if any) and clear statement of service discontinuation
4. Effective Date: Clear mention of the last working day and whether notice period applies
5. Reason for Discontinuance: Brief, professional statement of the reason for service discontinuation
6. Final Settlement Details: Information about salary, benefits, and other dues to be settled
7. Company Property Return: List of company assets to be returned and deadline for return
8. Confidentiality Reminder: Reminder of continuing obligations regarding confidentiality and proprietary information
9. Exit Process: Information about exit formalities and clearance procedures
10. Closing: Professional closing with contact information for queries and signature block
1. Non-Compete Reminder: Include when employee is bound by non-compete agreements that continue post-employment
2. Severance Package: Include when additional compensation or benefits are being offered
3. Performance Issues: Include when termination is due to performance issues, documenting key points
4. Appeal Rights: Include when organizational policy allows for appeals against termination
5. Reference Policy: Include when specifying company policy on providing references
6. Rehire Eligibility: Include when specifying whether employee is eligible for future employment
7. Legal Compliance Statement: Include specific references to labor law compliance when termination is under specific statutory provisions
1. Final Settlement Calculation: Detailed breakdown of final payment including salary, leave encashment, gratuity, and other dues
2. Asset Return Checklist: List of company property to be returned with current status
3. Benefits Summary: Summary of benefits status including insurance, PF, and other benefits
4. Exit Interview Form: Standard form for exit interview process
5. Clearance Form: Departmental clearance checklist for various departments like IT, Finance, HR
6. Full and Final Settlement Form: Document detailing all financial settlements and employee acknowledgment
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