Can company stop or restrict the leave encashment? - CiteHR
Umakanthan53
Labour Law & Hr Consultant
Srinath Sai Ram
Hr Manager

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Hello Experts,
I am working in Software company in Gujarat.
I have signed NDA at the time of joining, which mention that
THE EMPLOYEE CANNOT LEAVE THE COMPANY FOR PERIOD OF 6 MONTHS FROM SALARY REVISION/APPRAISAL. IN CASE OF ANY REASON THE EMPLOYEE HAS TO LEAVE THE COMPANY BEFORE CESSATION OF NOTIFIED PERIOD, THE INCREMENTED AMOUNT WILL BE ADJUSTED FROM THE FULL AND FINAL SETTLEMENT.
Here it is not clearly mentioned that 6 months of duration after salary revision is including/excluding notice period.
As I have resigned within 6 months after salary revision and I have to serve 2 months of notice period. Including 2 months of notice period, I am leaving the company after 6 months of salary revision.
Now HR is telling me that company will not pay leave encashment as you have breach the NDA. Company has rights to change rules of leave encashment anytime. So we will not pay you leave encashment.
According to me, I am not breaching the NDA. As I am leaving the company after 6 months of salary revision.
Please provide me your valuable inputs on it.
So, my query is can company stop or restrict the leave encashment? Has company such rights to change rules of leave encashment anytime?
Kindly Suggest.

Dear friend,
There is no mention about the capacity of your employment - whether a workman or otherwise. That apart, It sounds very odd to me in the first place that any condition restricting the employee's exit on his own by means of a formal resignation within a certain period after his periodical pay-hike could form part of an "NDA" which is enforceable only on its registration under the Registration Act,1908.
Secondly, the act of exit by a formal resignation is covered by the conditions of notice and acceptance of resignation by the employer.Therefore, the condition that no exit within 6 months from the date of periodical salary hike would be totally unreasonable for the hike is normally based on past performance only.
Thirdly since the resignation mentioned in the post is a prospective one taking effect from a future date only after the six months period from pay hike and expiry of the notice period of two months, there is no breach of the contract of employment.
Finally and even otherwise the encashment of leave on formal exit is a matter governed by the leave regulations of the organization or the applicable Labour Law depending on the employment status of the outgoing employee as the case may be. In any case, no instantaneous modification of the rule according to the whims and fancies of the employer is permissible under Law.
Therefore, the statement of the HR person is totally incorrect and the refusal of leave encashment on the basis of breach of the so called "NDA" is totally illegal.

Dear Anamika, please upload the relevant Document.Information provided by you is vague.What about your Appointment letter-Termination Clause?
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