Dear mentors,
Greeting of the day.
One of employee in our organization who is 48 year old is asking us to issue him a letter mentioning his retirement age in the organization will be 65 as he has applied for home loan and he will get some concession benefit on loan interest.
Being a private firm we are not having any such retirement policy in the organization.
There are few who are working even after age of 65 but that all mutually. We have not frame any such policy.
This employee has worked for 8 years in our organization then left organization Now last year he joined back again but we are not much happy with his performance .
Please suggest what to do in this case. What will happen if we provide him this letter. Will we become to liable to retirement clause after giving this letter.
Warm Regards
From India, Mumbai
13Greeting of the day.
One of employee in our organization who is 48 year old is asking us to issue him a letter mentioning his retirement age in the organization will be 65 as he has applied for home loan and he will get some concession benefit on loan interest.
Being a private firm we are not having any such retirement policy in the organization.
There are few who are working even after age of 65 but that all mutually. We have not frame any such policy.
This employee has worked for 8 years in our organization then left organization Now last year he joined back again but we are not much happy with his performance .
Please suggest what to do in this case. What will happen if we provide him this letter. Will we become to liable to retirement clause after giving this letter.
Warm Regards
From India, Mumbai
Thank you so much mam, will do this.
But want to know for my knowledge if we give any letter to any employee then will company have some liability towards employee. Will we be able to terminate employee in future based on their poor performance.
From India, Mumbai
But want to know for my knowledge if we give any letter to any employee then will company have some liability towards employee. Will we be able to terminate employee in future based on their poor performance.
From India, Mumbai
an employer can assure of the past records of employee, and secure of his benefits, but how he can assure of his future?
resignation from the job, or termination from job ...... in both the situations such letters would get questioned by the loan providing authority.
if the employer offer any such letter in writing, then he is bound to accept all the willful malpractice of the employee (if any) and can not terminate him up to the age of 65
resignation from the job, or termination from job ...... in both the situations such letters would get questioned by the loan providing authority.
if the employer offer any such letter in writing, then he is bound to accept all the willful malpractice of the employee (if any) and can not terminate him up to the age of 65
Thank U So Much mam/Sir, This was very helpful. This is what I wanted to know. Regards
From India, Mumbai
From India, Mumbai
After going through the initial query, answers by the resource person and the response of the poster based on the rationale behind the answers, I have a different perception.
In the first place, it is evident that the establishment has not fixed the age of superannuation for its employees so far which is not uncommon. There is no legal compulsion,if any as of now to fix the age of superannuation for industrial/private employment.
Secondly, uncertainty being the inevitable aspect of existence as well as employment, the employer can not predict or assure the future course of employment of his present employee as rightly pointed out by the respondent member.
Thirdly, the employee might have taken the cue from the existing practice of continued employment beyond 65 years of age on mutual terms and asked for a certificate to the effect of declaring the normal age of his retirement as 65 for the purpose of home loan.
Fourthly, it is the discretion of the employer to give a certificate or letter as asked for or mentioning the actual fact that there is no age of retirement fixed so far. I am quite unable to think that such a certificate or letter, as the case be, will be an undertaking or binding on the part of the employer in case of default by the employee due to premature termination of his employment for whatsoever reason. By giving such a letter or certificate, the employer will never become a surety or guarantor in respect of the proposed home loan. Nor will it create such a legal obligation on the part of the employer not to terminate the employee's services till the age of sixty five on the ground of any misconduct.
Finally, this query appears to me emanating from the poster's hesitation based on the employee's past service and present performance only.
From India, Salem
In the first place, it is evident that the establishment has not fixed the age of superannuation for its employees so far which is not uncommon. There is no legal compulsion,if any as of now to fix the age of superannuation for industrial/private employment.
Secondly, uncertainty being the inevitable aspect of existence as well as employment, the employer can not predict or assure the future course of employment of his present employee as rightly pointed out by the respondent member.
Thirdly, the employee might have taken the cue from the existing practice of continued employment beyond 65 years of age on mutual terms and asked for a certificate to the effect of declaring the normal age of his retirement as 65 for the purpose of home loan.
Fourthly, it is the discretion of the employer to give a certificate or letter as asked for or mentioning the actual fact that there is no age of retirement fixed so far. I am quite unable to think that such a certificate or letter, as the case be, will be an undertaking or binding on the part of the employer in case of default by the employee due to premature termination of his employment for whatsoever reason. By giving such a letter or certificate, the employer will never become a surety or guarantor in respect of the proposed home loan. Nor will it create such a legal obligation on the part of the employer not to terminate the employee's services till the age of sixty five on the ground of any misconduct.
Finally, this query appears to me emanating from the poster's hesitation based on the employee's past service and present performance only.
From India, Salem
Unless an employee has made request in "writing" for any such certificate, its not wise to jump into an endless debate.
if the employee has made an application to confirm the same, then employer can put remarks on his "request letter" with seal, that would be sufficient, to resolve his purpose.
issuing any certificate for "future" is unwanted for any establishment, except the offer letter for new employees.
if the employee has made an application to confirm the same, then employer can put remarks on his "request letter" with seal, that would be sufficient, to resolve his purpose.
issuing any certificate for "future" is unwanted for any establishment, except the offer letter for new employees.
I fully endorse the opinion of Umakanthan Sir. In the absence of any Standing Orders or any HR policy which describes the retirement age or extension of retirement age or even the employment of persons above certain age, the employer can give such letters to individual employees and by giving such letter the employer will never be under an obligation to employ him till he reaches the retirement age so mentioned. Suppose that the company has a standing order or service rules and according to that service rules, the retirement age is 60 or even 65 years. Is it that the company cannot terminate an employee before his attaining the age of superannuation just because there is a service rules which are binding on employer and employee? No. The employer can terminate the contract of employment. The rules only say that under normal circumstances the employment shall continue till the employee reaches the age of 60/ 65 , as the case may be. Similarly, the letter to the bank also says that he can be in service till 65. There is no guarantee that the employee will be in service till that age. Even a provision regarding retirement age in the certified Standing Orders or Service Rules of the company can be amended at a later stage if the employees and the employer agree. You can not say that based on a retirement age of 65 you had taken a housing loan and you cannot make it 60. If there is reached an understanding that the retirement age should be reduced considering the business exigencies, naturally, you will have to agree to it. Therefore, I would say that there is nothing wrong or illegal in giving such letter. The letter only says that as on date the retirement age is 65 and there is no undertaking by the employer that he will be in service till that date.
Madhu.T.K
From India, Kannur
Madhu.T.K
From India, Kannur
Dear Sir Umakanthan & Madhu Mam,
Thanks to both of you for sharing your experience and opinion in this regard.
Further I wish to share the specific line employee has mentioned in his application
" Kindly issue me a letter mentioning that my retirement age would be 65".
Also he has asked if we are rejecting that also we should write on the application he has given to us.
That is why we are hesitating in giving the certificate to him because there is no grantee to it that he would be retained for another 12 months.
Our management is very helpful & we help to all extend to our employees.If by issuing such letter he can get some monitory benefit in long term we wont mind giving it to him, but as I have shared my concern that company security comes first for an HR and thus I need to be sure before releasing any letter.
Please suggest.
Regards
From India, Mumbai
Thanks to both of you for sharing your experience and opinion in this regard.
Further I wish to share the specific line employee has mentioned in his application
" Kindly issue me a letter mentioning that my retirement age would be 65".
Also he has asked if we are rejecting that also we should write on the application he has given to us.
That is why we are hesitating in giving the certificate to him because there is no grantee to it that he would be retained for another 12 months.
Our management is very helpful & we help to all extend to our employees.If by issuing such letter he can get some monitory benefit in long term we wont mind giving it to him, but as I have shared my concern that company security comes first for an HR and thus I need to be sure before releasing any letter.
Please suggest.
Regards
From India, Mumbai
Dear friend,
Your further response after carefully considering the replies of Mr.Madhu and mine is very much appreciated. Our views are not only purely based on the legal consequences of a letter or a certificate to be issued by an employer factually confirming a particular condition of employment in respect of an employee in service as on date for the lawful purpose of availing a loan from a legal entity but also on the aspect of positive HR practice.
Home loan being a long term loan, the bank or housing finance agency normally requires such particulars in respect of salaried people for the purpose of deciding the recovery period of the loan. May be hence such a request from the employee in alternative terms. It can not be a valid or logical reason for your outright hesitation or refusal. You can simply mention in the certificate or letter that there is no age of superannuation fixed for your employees as on date.
When you are not incurring any legal or moral liability in the issuance of such a letter or certificate, guarantee of employment is a question out of context. When every business enterprise has its own unpredictable life-span, where is the guarantee for the employment of its human resources?
When you are not sanctioning or recommending the loan or standing as a surety to the loan, the interest of security or the standing of the Company is not at all invoved in this matter.
From India, Salem
Your further response after carefully considering the replies of Mr.Madhu and mine is very much appreciated. Our views are not only purely based on the legal consequences of a letter or a certificate to be issued by an employer factually confirming a particular condition of employment in respect of an employee in service as on date for the lawful purpose of availing a loan from a legal entity but also on the aspect of positive HR practice.
Home loan being a long term loan, the bank or housing finance agency normally requires such particulars in respect of salaried people for the purpose of deciding the recovery period of the loan. May be hence such a request from the employee in alternative terms. It can not be a valid or logical reason for your outright hesitation or refusal. You can simply mention in the certificate or letter that there is no age of superannuation fixed for your employees as on date.
When you are not incurring any legal or moral liability in the issuance of such a letter or certificate, guarantee of employment is a question out of context. When every business enterprise has its own unpredictable life-span, where is the guarantee for the employment of its human resources?
When you are not sanctioning or recommending the loan or standing as a surety to the loan, the interest of security or the standing of the Company is not at all invoved in this matter.
From India, Salem
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