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Employee Exit Policy Template to Simplify the Exit Process for HR

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Employee exit refers to the process that occurs when an employee leaves an organization, whether through resignation, retirement, or termination of employment. To manage this transition smoothly, an employee exit policy outlines the formal steps for clearances, documentation, and final settlements. It helps maintain professionalism, prevent disputes, and ensure compliance with company and legal requirements.

This article explains the key components of an effective employee exit policy, its purpose, and how it ensures a respectful and transparent offboarding process.

In this Policy, You Will Find:

• The purpose and scope of the employee exit policy.
• The eligibility criteria for employees are covered under this policy.
• The roles and responsibilities of employees and their HR/managers during the exit process.
• The provisions and procedures for employee separation from the organization.

Employee Exit Policy Template

This exit policy ensures that the organization handles all employee exits in a fair, transparent, and respectful manner. This policy covers exits through resignation, retirement, contract completion, and termination.

The company believes that allowing employees to leave with dignity reflects its commitment to professionalism and integrity. In this regard, this policy is an important part of our organizational culture and strength.

Purpose

The purpose of this exit policy for employees is to outline a structured and transparent process. It aims to minimize miscommunication, ensure proper documentation, and maintain professionalism during all stages of the employee exit process.

All employees and managers must handle separations in accordance with applicable labor laws while upholding the company’s values of fairness, confidentiality, and respect.

Scope

This exit policy applies to all employees, irrespective of their role, designation, department, employment type (permanent, contractual, or trainee), or work location.

Eligibility

An employee’s separation from the company may occur either voluntarily or involuntarily.

Voluntary separation includes:

• Resignation
• Retirement
• Completion or non-renewal of the employment contract

Involuntary separation includes:

• Termination of employment due to performance issues, policy violations, or disciplinary reasons
• Termination initiated by the company without specific cause (where applicable and lawful)
• Failure to report to work without notice for a predetermined number of days (considered as job abandonment)

Procedure for Resignation

Employees who wish to resign from the company. must follow the steps outlined below in this exit policy through the HRMS portal:

1. Log in to the HRMS account.
2. Select the “Exit” tab.
3. Fill in the required “Correspondence Information” and “Relieving Information.”
4. Click “Submit” to complete the resignation request.

For trainees or consultants, the resignation notice must align with the notice period stated in their offer letter. The company will consider the final day of the notice period as the contract end date.

The employee must also inform their L1 Manager and HR representative about their intent to serve the full notice period or discuss any exceptions, if applicable.

Once the L1 Manager accepts the resignation, the employee will receive a confirmation email on their official company ID.

After the full and final settlement process is completed, the HR Department will issue an Experience and Relieving Letter within 60 days from the last working day.

Adjustment of Leave Against Notice Period

The notice period allows an employee to complete ongoing assignments, hand over responsibilities, and ensure a smooth transition before leaving the company. Employees are generally expected to work through this entire duration.

However, the company may permit an employee to be released early from their notice period. The following rules apply:

• Only the Chief People Officer (CPO) is authorized to approve a waiver of the notice period. L1 or L2 Managers cannot grant such approvals.
• Any waiver request must be endorsed by the Practice Head/Function Head and the AVP of HR (or a higher-level official).
• Employees who wish to buy out a portion of their notice period may do so, subject to approval from the CPO and the Practice Head/Function Head.
• The buyout amount will be calculated as:

(Employee’s Monthly Basic/Gross Salary ÷ 30) × Remaining Notice Days

Exit Process

The following steps outline the exit policy for employees leaving organization on their last working day:

• Submit the General Release and Waiver Letter (GRL) through the HRMS portal.
• Obtain No Dues Clearance (NDC) from the L1 Manager on the HRMS system.
• Return all company assets to the IT department.
• Submit and get investment proofs approved on the HRMS platform before the Last Working Day (LWD) to ensure timely processing of the final settlement.

Absconding Process

If an employee is absent from work without prior approval, the following absconding process will apply at organization:

• The L1 Manager will attempt to contact the employee. If the employee remains unreachable after seven consecutive days of absence, the manager must inform HR via email.
• The HR team will contact the employee using their registered company contact details.
  • If there is no response, the HR department will send Absconding Letter and Email (1) to the employee’s official email ID.
  • Should there be no reply within 3 days, an absconding letter and email (2) will be sent.
• If the employee remains unresponsive, HR will initiate the exit process on the HRMS portal. The last active working day will be considered the official date of exit.
• All communications regarding the absconding process will include the L1 Manager in copy.
• The absconding employee must return all company assets to IT or opt for a company-arranged courier pickup, with the courier cost deducted from the final settlement.
• The company will process the full and final settlement and issue the experience letter within 60 days after the employee returns all company assets.
• No compensation or benefits will be applicable if the employee fails to serve the mandatory notice period.
• If any recovery amount is due, the employee must clear it before receiving the relieving letter.
• Failure to comply with these requirements may result in legal action, as per company policy.

Notice Period

If the employee is on the notice period, the following rules apply as per the company’s exit policy:

• Only resignation dates submitted through the HRMS portal count as valid.
• All employees must serve their full notice period as stated in their appointment letter.
• HR/HRMS will finalize the last working day in consultation with the employee’s manager.
• Before the final working day, the existing employee must transfer all job responsibilities and knowledge to a designated team member, as confirmed in writing by the L1 Manager.
• Privilege Leave(s) or any other accumulated leave cannot be adjusted against the notice period.
• Employees may take casual or sick leave during the notice period if required. However, such leaves will result in an extension of the notice period, with two additional days added for each day of leave taken.
• Employees who leave the organization without completing their notice period will have their gross salary deducted for the days not served from their final settlement. This ensures fair adjustment for the portion of the notice period not fulfilled.

Exit Formalities

This section explains the formalities employees must complete on their last working day, as stated in the company’s exit policy:

• The HR team will conduct an exit interview with the departing employee to gather their feedback and understanding of their experience.
• The employee must complete and submit the exit questionnaire (scanned and emailed to HR).
• The employee must obtain clearances from the IT, Finance, and Admin departments.
• Once all clearances are approved on HRMS, the employee must return all company assets to the respective departments and submit their ID card to the HR department.
• The company will pay the employee’s final regular salary (for the last working month) on the standard payday.
• The Full and Final Settlement (FnF), which includes any remaining dues such as leave encashment, reimbursements, or adjustments, will be processed within 60 days from the date all required clearances and documents are submitted.

FAQs

1. What is an Employee Exit?

An employee exit refers to the formal process that occurs when an employee leaves an organization, whether through resignation, retirement, contract completion, or termination of employment. It involves completing necessary clearances, returning company assets, and settling dues to ensure a smooth and transparent separation.

2. What is an Employee Exit Policy?

An employee exit policy, also known as the employee separation policy, is a structured framework that defines how the organization manages employee separations. It outlines the steps, documentation, and responsibilities involved in offboarding, ensuring the process is fair, consistent, and compliant with company and legal standards.

3. What is the Exit Procedure for Employees?

The exit policy for employees includes submitting a resignation through the HRMS, obtaining departmental clearances, returning company property, participating in an exit interview, and completing a full and final settlement. This process helps both the employee and the company close the employment relationship on professional and mutually respectful terms.

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