Receipt in full and final settlement

Definition

A final settlement statement is a written document in which you set out the sums paid to an employee upon the termination of their employment contract (resignation, dismissal, retirement, expiry of contract, etc.).

Whatever the reason, you must provide the employee with a detailed summary of the sums paid upon their departure, in the form of a final settlement statement.

The final settlement statement drawn up and issued upon the expiry of the employment contract specifies the period during which the employee may challenge the amounts shown therein.

Clarification on the period for contesting the receipt

This receipt may be contested by the employee within 6 months of its signing. A challenge by registered letter or by referring the matter to the inspector or a judge is possible if the employer is ‘notified’ within the 6-month period.

If the employee does not contest it within the 6-month period, the final settlement statement becomes a discharge for the sums mentioned therein. This means that the employee cannot take legal action against you to claim these sums or dispute their amount.

The employee may contest the ‘final settlement’ receipt by sending you a registered letter with acknowledgement of receipt.

To challenge this receipt, the employee may also take legal action. However, this is very risky.

In such a situation, you must receive the summons to appear before the conciliation board within that same six-month period.

If this is not the case, the referral to the conciliation board will not have the effect of a challenge, even if the employee has taken the matter to court within the six-month period. As the employer has not been informed within the time limit for challenging the receipt, the receipt becomes a discharge.

The inclusion of a lump-sum amount does not have a discharging effect.

It is important to set out in detail on the receipt for settlement in full the various components of remuneration and compensation: salary, overtime pay, notice pay, redundancy pay, compensation for unused holiday entitlement, financial compensation under the non-competition clause, etc.).

Only the sums covered by the receipt, whether relating to the performance of the contract or to its termination, will be covered by the discharging effect.

A receipt for final settlement which mentions only a single lump sum, without a detailed breakdown of the sums paid, does not have a discharging effect. The same applies if the receipt for settlement in full refers, for details of the sums paid, to the payslip attached to it.

The attached payslip does not in itself constitute a receipt for settlement of all accounts.

The breakdown of the sums paid must be set out in detail on the receipt for settlement in full in order for it to have discharging effect if it is not contested within six months of the employee’s signature.