Employee Exit Policy Template to Simplify the Exit Process for HR

A ready-to-use Employee Exit Policy covering resignation, notice period, absconding, and final settlement, plus a free downloadable PDF.

Download Employee Exit Policy Template

Employee Exit Policy (PDF)

Table of Contents

What is an Employee Exit Policy?
Standard Employee Exit Policy Format
Quick, Actionable Tips
FAQs

What is an Employee Exit Policy?

Employee exit covers what happens when someone leaves an organization, whether that's through resignation, retirement, or termination. An employee exit policy keeps that transition smooth by laying out the formal steps for clearances, documentation, and final settlement. It helps keep things professional, heads off disputes, and keeps the organization compliant with both company and legal requirements.

This page walks through the key pieces of an effective employee exit policy, what it's for, and how it keeps offboarding respectful and transparent.

Standard Employee Exit Policy Format

This exit policy makes sure the organization handles every employee exit fairly, transparently, and respectfully, whether it's a resignation, retirement, contract completion, or termination.

Here's a sample template you can adapt for your own organization. Letting someone leave with dignity says a lot about an organization's professionalism and integrity, which is exactly why this policy matters as part of the culture here:

Purpose

This exit policy exists to set out a structured, transparent process for employees leaving the organization. It's meant to cut down on miscommunication, keep documentation in order, and maintain professionalism at every stage of the exit process.

Employees and managers are expected to handle every separation in line with applicable labor law, while holding to the company's values of fairness, confidentiality, and respect.

Scope

This policy applies to every employee, regardless of role, designation, department, employment type (permanent, contractual, or trainee), or work location.

Eligibility

An employee's separation from the company can be either voluntary or involuntary.

Voluntary separation includes:

Resignation
Retirement
Completion or non-renewal of the employment contract

Involuntary separation includes:

Termination due to performance issues, policy violations, or disciplinary reasons
Termination initiated by the company without specific cause, where lawful and applicable. Employers must give formal written notice when initiating a termination, to stay legally compliant and keep communication clear.
Failing to report to work without notice for a set number of days, treated as job abandonment

Procedure for Resignation

Employees who want to resign should follow these steps through the HRMS portal:

Log in to the HRMS account.
Select the "Exit" tab.
Fill in the required Correspondence Information and Relieving Information.
Click Submit to complete the resignation request.

For trainees or consultants, the resignation notice should match the notice period stated in their offer letter. The company treats the final day of that notice period as the contract end date.

Employees should also let their L1 Manager and HR representative know whether they intend to serve the full notice period, or discuss any exceptions where applicable.

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

Once the full and final settlement process is complete, HR issues an Experience and Relieving Letter within 60 days of the employee's last working day.

Adjustment of Leave Against Notice Period

The notice period gives an employee time to wrap up ongoing assignments, hand over responsibilities, and leave the company on a smooth note. Employees are generally expected to work through the full notice period.

That said, the company may allow an employee to be released early. A few rules apply:

Only the Chief People Officer (CPO) can approve a waiver of the notice period. L1 or L2 Managers can't grant this.
Any waiver request needs endorsement from the Practice Head/Function Head and the AVP of HR, or someone more senior.
Employees who want to buy out part of their notice period can do so, subject to approval from the CPO and the Practice Head/Function Head.

The buyout amount is calculated as:

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

Exit Process

These are the steps for an employee's last working day:

Submit the General Release and Waiver Letter (GRL) through the HRMS portal.
Get 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), so the final settlement gets processed on time.

Absconding Process

If an employee is absent from work without prior approval, this process applies:

The L1 Manager tries to reach the employee. If they remain unreachable after seven consecutive days of absence, the manager informs HR by email.
HR contacts the employee using their registered company contact details.
If there's no response, HR sends an Absconding Letter and Email (1) to the employee's official email ID.
If there's still no reply within 3 days, a second absconding letter and email (2) go out.
If the employee remains unresponsive, HR starts the exit process on the HRMS portal. The last active working day becomes the official exit date.

The L1 Manager stays copied on all communication about the absconding process.

The absconding employee needs to return all company assets to IT, or arrange a company courier pickup, with the courier cost deducted from the final settlement.

The company processes the full and final settlement and issues the experience letter within 60 days of the employee returning all company assets.

No compensation or benefits apply if the employee doesn't serve the mandatory notice period.

Any recovery amount due must be cleared before the employee receives their relieving letter.

Not meeting these requirements may lead to legal action, as per company policy.

Notice Period

For an employee serving their notice period, these rules apply:

Only resignation dates submitted through the HRMS portal count as valid.
Every employee must serve their full notice period as stated in their appointment letter.
HR and HRMS finalize the last working day in consultation with the employee's manager.
Before the final working day, the employee must transfer all job responsibilities and knowledge to a designated team member, confirmed in writing by the L1 Manager.
Privilege Leave or any other accumulated leave can't be adjusted against the notice period.
Employees may take casual or sick leave during the notice period if needed, but doing so extends the notice period by two additional days for every day of leave taken.
Employees who leave without completing their notice period will have their gross salary deducted for the days not served, taken from their final settlement.

Exit Formalities

These are the formalities to complete on the last working day:

HR conducts an exit interview with the departing employee to gather their feedback on their experience.
The employee completes and submits the exit questionnaire, scanned and emailed to HR.
The employee gets clearances from IT, Finance, and Admin.
Once every clearance is approved on HRMS, the employee returns all company assets to the respective departments and submits their ID card to HR.
The company pays the employee's final regular salary for the last working month on the standard payday.
The Full and Final Settlement (FnF), covering any remaining dues like leave encashment, reimbursements, or adjustments, gets processed within 60 days of all required clearances and documents being submitted.

Quick, Actionable Tips

The purpose and scope of the employee exit policy.
Which employees are covered under this policy.
What employees and their HR/managers are responsible for during the exit process.
The provisions and procedures for an employee's separation from the organization.

FAQs

What Is an Employee Exit?

It's the formal process that kicks in when someone leaves an organization, whether through resignation, retirement, contract completion, or termination. That covers completing clearances, returning company assets, and settling dues, so the separation stays smooth and transparent.

What Is an Employee Exit Policy?

Sometimes called an employee separation policy, it's a structured framework for how the organization handles separations. It lays out the steps, documentation, and responsibilities involved in offboarding, so the process stays fair, consistent, and compliant with both company and legal standards.

What Is the Exit Procedure for Employees?

It covers submitting a resignation through the HRMS, getting clearances from every department, returning company property, taking part in an exit interview, and completing the full and final settlement. All of that helps both sides close out the employment relationship professionally and on good terms.