Severance Letter for India

Severance Letter Template for India

A formal document issued under Indian employment law that outlines the terms and conditions of an employee's separation from their employer, including the severance package details, final settlement terms, and ongoing obligations. This document complies with various Indian labor laws including the Industrial Disputes Act, 1947, and relevant state-specific regulations. It details the financial compensation, benefits continuation, final settlements, and other separation terms while ensuring compliance with statutory requirements for employment termination in India.

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What is a Severance Letter?

A Severance Letter is a crucial document used in employment termination scenarios in India, whether in the context of voluntary resignation, mutual separation, or company-initiated termination. This document serves as the formal written record of separation terms and conditions, incorporating all elements required under Indian labor laws. The Severance Letter must comply with central legislation such as the Industrial Disputes Act, 1947, Payment of Gratuity Act, 1972, and relevant state-specific labor laws. It typically includes detailed information about the severance package, final settlement calculations, statutory dues, benefit continuations, and post-employment obligations. This document is essential for ensuring legal compliance and providing clarity to both parties regarding the termination arrangement.

What sections should be included in a Severance Letter?

1. Letter Header: Company letterhead, date, and employee's contact details

2. Subject Line: Clear indication that this is a severance letter

3. Separation Details: Last working day, reason for separation (if applicable/appropriate), and reference to any prior discussions or notices

4. Severance Package Components: Detailed breakdown of all payments including basic severance, gratuity, leave encashment, and other benefits

5. Payment Timeline: When and how the severance amount will be paid

6. Company Property: Instructions regarding return of company property and timeline

7. Continuation of Benefits: Details of any benefits that continue post-employment (like health insurance extension)

8. Final Settlement Details: Information about final salary, unpaid expenses, and statutory dues

9. Release and Waiver: Statement regarding full and final settlement and release of claims

10. Confidentiality Reminder: Reminder of ongoing confidentiality obligations

11. Contact Information: HR contact details for queries regarding severance or final settlement

What sections are optional to include in a Severance Letter?

1. Non-Compete/Non-Solicitation Reminder: Include when the employee's contract contains these clauses and they survive termination

2. Outplacement Services: Include when the company is offering career transition support

3. Reference Policy: Include when specifying how future employment verification will be handled

4. COBRA/Health Insurance Extension: Include when offering extended health benefits

5. Stock Options/RSUs: Include when the employee has outstanding equity compensation that needs to be addressed

6. Rehire Eligibility: Include when specifying the employee's status for future employment opportunities

What schedules should be included in a Severance Letter?

1. Severance Calculation Sheet: Detailed breakdown of severance package calculation including all components

2. Benefits Summary: Summary of all benefits and their continuation/termination status

3. Company Property Checklist: List of company assets to be returned

4. Release and Waiver Form: Separate form for employee to sign acknowledging the terms

5. Tax Computation Sheet: Breakdown of tax implications on various components of the severance package

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

India

Publisher

Genie AI

Document Type

Termination Letter

Cost

Free to use
Relevant Industries

Information Technology

Manufacturing

Financial Services

Healthcare

Retail

Telecommunications

Professional Services

Education

Real Estate

Construction

Automotive

Pharmaceuticals

Energy

Media and Entertainment

Relevant Teams

Human Resources

Legal

Finance

Operations

Administration

Compliance

Payroll

Employee Relations

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Chief Operating Officer

Director

Senior Manager

Manager

Deputy Manager

Assistant Manager

Senior Executive

Executive

Associate

Analyst

Specialist

Coordinator

Administrator

Supervisor

Team Leader

Department Head

Project Manager

Regional Manager

Industries
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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