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Hello Guys, I'm going through a strange case, i'm working in a Pharma company and recently one of my employee resigned from the job, now he would like to go on leave whereas we do not allow the leaves for an employee who has resigned the job. Is it a mandatory for not allowing him the leaves or it's a company policy.

When i asked him he cannot avail the leaves he said that leaves are availing from his balance leaves.
Could anyone please pass the information of it.

Thank You.
With Warm Regards.

Anand.
21st July 2017 From India, Kolkata

Dinesh Divekar
Business Mentor, Consultant And Trainer
Kamalkantps
Advocate
Gopinath Varahamurthi
Ass.professor/adm. Officer Ar Sri Krishna
Suresh2511
Labour Consultant
Anand10feb
Officer Hr & Admin
Nandita05
Asst Manager Hr
+1 Other

Hi anand,

This depends on Company's Policies, Some companies allows employees to use their leaves on notice where balance leave can be compensated for notice (can be used for short notice also) ,whereas some companies don't.
Especially EL (earned leave) company will pay only basic in F&F ,on other hand if employee avails the leave in notice (he/she can use full day gross) loss for the company ( but not in huge).

I hope the above info will help you to understand that there is no policy as such for availing leaves on notice.
21st July 2017 From India, Bengaluru
Thank You Nandita,

good information
22nd July 2017 From India, Kolkata
Once an employee resigned, he severed the contract from his side and therefore he cannot avail leave. However, normally the leave policy of the companies provide for encashment of leave in his balance on the date of resignation. If you do not have a policy, then you have to allow leave encashment at the time of leaving the service by the employee as per the Factories Act or the Shops & Estb. Act of your State depending up on the applicability of the Act to your establishment.,

B.Saikumar
HR & Labour Relations Advisor
Navi Mumbai
22nd July 2017 From India, Mumbai
Dear Anand,

Separation from the company and employee leave are two separate issues. Why these were linked is not understood. Withholding leave during notice period could be company specific issue and it does not have legal sanction. No law says that on receipt of letter of resignation from the employee, employer is free to withhold the leave of that employee.

Companies talk lot of about how they are employee-friendly or what engagement activities are conducted in their company. But by designing this kind of policy, it shows that how this talk is superficial. On receipt of letter of resignation making that person persona non grata is nothing but eyewash of the HR practices.

Whether Factory Act or Shops and Establishment Act, either act says that for every 20 days of work, employee becomes eligible to get a day's leave. This rule continues till the last working day of the employee. Therefore, whether to avail of the balance leave or encash it is a choice of employee and if the organisation does not interfere in the personal choice the better.

Thanks,

Dinesh Divekar
22nd July 2017 From India, Bangalore
In the instant case as said by shri Dinesh Divekar leave and resignation are separate issues, the period of serving notice is the period of working with the company as the employee bound to put the services during the notice period as such availing the leave and encashing the same in lieu of availing are different.
23rd July 2017 From India, Arcot
Dear Anand,

Your Company is rightly doing the act for not allowing leave to the employee, who has already resigned. As per service contract every employee has to serve notice and work physically during the notice period to enable the employer to look for his/her suitable replacement. All learned Members have advised you the same. Moreover in exigencies of work the Company may, at its sole discretion, refuse leave asked for or revoke leave already granted.
In this particular case you can mark him absent for his unauthorised absenteeism and also deduct full notice pay applicable to his category, legally. However, you have to pay him balance leave encashment as per your company policy.
You may also delay his full & final settlement, for fulfilling company policy as regards to notice period in writing. (Provided your appointment letter has no clause "either party can terminate the service contract by giving ___ month notice or to pay salary/wages in lieu of notice).

Regards,

Suresh
24th July 2017 From India, Thane
Dear friends,

Sometimes I wonder why companies waste their time in the small issues like stopping leave of a person who is on the notice period. What is going to be achieved out of this? A cynic pleasure and nothing else!

Most of the companies have at least 60-day notice period. Out of this period a person may go on leave for 10 days. What company will gain by making that person to work forcefully? Unfortunately, CEOs make these nonsensical rules and HR ends up in towing the line!

Let CEOs as well as HRs understand that employees are their brand ambassadors. What they talk about the company during and after the employment matters lot. Let HRs explain me by making these kind of rules will employees talk positive about their company? With this misplaced coerciveness, can HR engage their employees?

For Mr Suresh: - You have written that as per service contract every employee has to serve notice and work physically during the notice period to enable the employer to look for his/her suitable replacement. I do not know how process of arrangement of replacement can hamper if the employee is not physically available. While employee works in his/her department, it is HR's duty to arrange the replacement. If few days absence hampers the process of replacement then either that organisation has something wrong seriously or it is nothing but evidence of HR's ineffectiveness at least in that company.

Thanks,

Dinesh Divekar
24th July 2017 From India, Bangalore
Dear Divekar Ji,

I think we are providing solutions or rather discuss for the employees, HR of small scale, Medium & Large organisations. What you are presuming is applicable to Large size or MNCs, where group of people are working in one department. But what about the small size company, where one employee handled multiple functions and when he leaves without any notice period the small organisation work suffers. Inorder to look for suitable replacement and to have smooth handover/takeover, to train the new comer etc. the physical presence of a leaving employee is a must.
Large size organisations/MNCs always have their own competent HR and or Advisers with them. So as far as my knowledge normally they don't seek any advise from Cite HR.
My submission was for small size organisations, where practically this type of problems are there. Besides the employee is leaving for better prospects and he or she should always remember whatever knowledge he/she gains during his tenure of employment just because of the organisation, where he worked.
When companies terminates employees for misconducts that is injustice and when employee resigns and disappears without notice that is justified.
My intention is not to hurt anyone's feelings and or disagree with anyone's solution.
What I wish to share and submit is my practical experience with employees & employers of Medium Size & Large Size/MNCs. What I learnt with my experience that In India every employee and employer behave / act as per his own convenience/benefit. There is no healthy relations between employees & employers, which was there 3 decades ago.

Tnx & Regds,


Suresh
25th July 2017 From India, Thane
Dear Anand,

It is no strange case, as already stated by our worth member Mr. Dinesh Divekar and I also wish to reiterate it, no Law absolutely no Law restrict any employee to take leaves during notice period. However, it should not be mixed with handing over of duties. Employee has duty to proper handover his duty to the person coming at his place or to a person who has been assigned to take handover from him during his notice period. if the employee do not properly handover his duties to the assigned person within his notice period the management has full right to not to issue him relieving letter. However you cannot stop him from taking leave. Also no employment contract is above Law, if any employee who is entitled for any leave under any act i.e. Shops and Establishment Act, Sales Promotion Employees Act or Factories Act or any other act for that matter, he can avail the same during his employment term without restriction of any Employment contract.

Any Service condition stipulated under any Employment Contact, if violates any Law of the land then it is Null and Void or Void-ab-initio.

Mr Suresh it is not the matter of big or small Management, it is correct practice. We must answer then what is correct as per Law because if they cross any law in finding any practical solution, that solution may seem easy at that moment but might land them in legal trouble afterwards and mind it no Authority will listen this thing that they did not follow the law because it is a small company or just a small proprietorship firm.

Ms Nandita,

I also like to comment on one thing of yours, which is not correct though some companies follow that which is wrong, that leave encashment should be done on basic. I am elaborating the same below by taking the Legal definitions. It should be done on gross.

23. Wages during leave. -Every employee shall he paid for the period of his leave at a rate equivalent to the daily average of his wages for the days on which he actually worked during the preceding three months,exclusive of any earnings in respect of overtime but inclusive of dearness allowance.

According to Section 23 of Delhi Shops and Establishment Act and this provision is same in all such acts an employee shall be paid for his leave @ daily average of his wages. Now lets see what definition of wages given in the Act

Section 2 (30) “Wages” means wages as defined in section 2 of the Minimum Wages Act, 1948 (XI of 1948);

Section 2 Sub Section 30 says the wages definition should be taken from Minimum Wages Act. So lets see what the definition of minimum wages has to Offer. Please find below the definition of Wages under Minimum Wages Act.

(h) "wages" means all remuneration, capable of being expressed in terms of money, which would, if the terms of the contract of employment, express or implied, were
fulfilled, be payable to a person employed in respect of his employment or of work done in such employment, 1*[and includes house rent allowance], but does not include--

(i) the value of--
(a) any house-accommodation, supply of light, water, medical attendance, or
(b) any other amenity or any service excluded by general or special order of the appropriate Government;

(ii) any contribution paid by the employer to any Pension Fund or Provident Fund or under any scheme of social insurance;

(iii) any travelling allowance or the value of any travelling concession;

(iv) any sum paid to the person employed to defray special expenses entailed on him by the nature of his employment; or

(v) any gratuity payable on discharge;

Now if we see the wages definition it includes all remuneration, capable of being expressed in terms of money and it specifically says HRA included. So as per definition it includes all allowances, all heads whatever you give to them by whatever name you call them. Only Exceptions given are those specifically given under the Definition.

Now let us take them one by one

Value of house-accommodation, supply of light, water, medical attendance. As amply clear that the companies who provide boarding and lodging facility to their employee have to exclude the value of it from wages. HRA will be included though. the items specifically excluded by government will also be excluded.

(ii) any contribution paid by the employer to any Pension Fund or Provident Fund or under any scheme of social insurance; PF or ESI contributions are excluded.

(iii) any travelling allowance or the value of any travelling concession; TA is Excluded

(iv) any sum paid to the person employed to defray special expenses entailed on him by the nature of his employment. The expenses to defray special expenses shall be excluded only if they relate to the nature of his job.

(v) any gratuity payable on discharge; This will not be counted.

So now as per the definition, the wage for leave would be Gross not just plain simple basic salary.

Mr. Divekar your views are invited on this....
25th July 2017 From India, New Delhi
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