Full & Final Acknowledgement Format - XLS Download

Dear Friend,

Now we are going to finalize a contractor, so we need an acknowledgment format. Please, can anyone help?

First, instruct the contractor to bring a letter from his in charge at the shop/site stating that his contract has been/will be closed with effect from (date).

Issue a clearance certificate in which he can obtain No Dues from all the departments in your shop/site.

Ask him to submit a copy of the Muster Roll, Pay sheet, PF & ESI Challans until the date of the last working day.

Prepare an Indemnity in which he will indemnify the company in case of any non-payment/underpayment of wages to the workers engaged by him. The contractor himself will take care of all payments/bonuses/gratuity/F&F Settlement for all workmen-related issues.

Prepare HR Clearance separately. Check that the Identity Cards issued to him are returned completely. In case of any deficiencies, you can raise a debit note for the same at the rate fixed by your management. Please check for the vacation of accommodation by all the workers; any damages can also be debited on his bill, for which you must raise the Debit Note and submit the same to the Billing/Accounts department so that the debit may be effected.

Instruct your Stores/Logistics department to submit a No due certificate after due verification from their records. In case of any recovery, they can also raise a debit note to the contractor.

Then issue them a copy of the Clearance Certificate to the concerned Contractor.

Dear Bhaskar,

I am totally in disagreement with what you had suggested. I am of the strong opinion that in case we are engaging somebody as a contractor, then all the terms and conditions should be enumerated in the contract itself, including the effective date of the contract, validity, payment terms, etc., inclusive of an indemnity clause. However, is it practically viable to hold the contractor accountable for any non-compliance at a later stage as you suggest that all payments, such as Bonus and Gratuity, will be made by the contractor? The contractor is not going to pay anything from their pocket unless and until it is not paid to them by the principal employer. Nonetheless, for the sake of our mental peace, we can obtain an undertaking from the contractor as follows:

Undertaking

Received with thanks from M/s ____ a sum of Rs._________ towards full and final payment as per the terms of the contract dated_________. With the receipt of the above amount, I hereby declare that nothing stands outstanding against M/s__________.

I further undertake that I have made all the compliances under various labor laws as applicable, and in any later stage, if any liability is fastened on M/s_________, I will indemnify the same.

Thank you.

If there is an indemnity bond signed separately with the contractor apart from the contract for performance to indemnify the principal employer from future liabilities, there is no need to obtain an indemnity undertaking at the time of final settlement of the contract. However, where the indemnity is incorporated as part of the main contract for performance and the said contract is terminated after completion of the performance, it is debatable whether the principal employer can invoke indemnity against the contractor for any future liabilities as the contract itself, of which indemnity is a part, became non-existent. In that event, it is advisable to follow the suggestion of Bhaskar. The other procedural precautions suggested by Bhaskar to be followed at the time of final settlement of the contract are, in my view, prudent, as some contractors are a little wily to extract money even after ending the relationship with the principal employer.

B. Saikumar

HR & Labour Law Advisor

Mumbai

Hi Dear,

Please find attached the full and final format that will help you with the Full and Final (F&F) settlement of any employee.

Regards,

Sanjay Patel
Executive-HR