Final settlement and certificate of service:what the employee signs on exit

The deadline: one week or two

Under Article 88, the employer must pay the employee's wages and other entitlements within one week of the end date if the employer ended the employment, and within two weeks if the employee did.

These are maximums, not targets. Paying late is a breach on its own, even if the amounts are correct.

The employer can deduct what the employee owes from these entitlements, such as unpaid advance instalments or company property not returned, as long as each deduction is documented and not estimated.

What the settlement contains

The final settlement is a statement of several items, not a single figure. Any item left out can come back later as a claim:

1. 01Pay for days actually worked up to the end date.
2. 02End-of-service gratuity, calculated on the last wage and at the share set by the reason the employment ended.
3. 03Cash for unused annual leave. This is a separate entitlement, paid alongside the gratuity.
4. 04Payment in place of notice, if the contract was ended without notice.
5. 05Any allowances or entitlements the contract gives for the period worked.
6. 06A deduction for what the employee owes in advances or company property, listed item by item.

The release and when it fails

A release is the employee's confirmation that they have received their entitlements. It is only worth something if it lists each item, not a single total, because a release covering a right that was never explained to the employee carries no weight.

If the employee signs for a total without being shown how the gratuity was calculated or how many leave days were paid, the release can be challenged, and the employer may have to pay the difference.

A signed, dated statement showing each item, its amount, and how it was calculated protects the employer better than a general release, however carefully it is worded.

The certificate of service

Under Article 64, the employer must give the employee a certificate of service on request and free of charge. It states their start date, end date, profession, and last wage.

The certificate cannot include anything that harms the employee's reputation or their chances of finding work. It confirms their service. It is not a performance review.

The same article requires the employer to return any certificates and documents the employee handed over. This is often forgotten, and it is a common cause of complaints.

Why exit day goes wrong

Settlements go wrong when the data is pulled together on the last day. The leave balance is worked out in a rush, advance instalments are estimated, and the wage is taken from the last payroll instead of the contract.

If the start date, recorded wage, leave balance, and advance balances are kept up to date every day, there is nothing to pull together. The settlement uses the same data as every monthly payroll.

Then the exit can be closed in a day, instead of staying open for weeks and turning into a claim.