Generally, in contracts of employment, employers become the dominant party by subscribing certain terms and conditions of the contract mostly to the policies of their organization rather than complying with or conforming to legal conditions or conventional principles of equity and the employees also unconditionally accept them in a " take it or leave it" situation. Notice clause on unilateral termination and the payment clause of final dues on termination of the contract are invariably the examples of such practice.
Coming to your queries,
1) In the larger interest of the industrial establishment and the uninterrupted continuance of its administration, the employer can insist on the actual service of the exiting employee during the entire notice period despite the buy-out clause of notice period. Always the buy-out whether in full or part is subject to the discretion of the employer.
2) It depends. Notice period does not add up to the privileges of the outgoing employee or simply entitles him to idle away on personal preoccupations for leave can not be claimed as a matter of right by an employee, particularly on the eve of his departure, simply to exhaust the unavailed leave. Therefore, it is the discretion of the employer and purpose of the leave applied for as well which determine the sanction of any leave during notice period.
3) Certainly it is illegal as it flouts the legal norms of payment of various dues on termination of employment for whatever reason.
I would like to highlight that peaceful and smooth separation depends on your interpersonal relationship with your superiors and the attitude and magnanimity of the organization as a whole.
15th May 2019 From India, Salem
Thank you for your response. Really appreciate your directions and help here.
Regarding the last point, i have seen that salaries are hold for last one month only in most of the organisations, even if notice period is of 3 months in total. In case where salary is kept on hold for such a longer duration, it is very much illogical i feel and that's where i thought it may not be as per laws. For a single earning person it is quite difficult otherwise to manage.
Can you guide me further if anything can be done in this case.
15th May 2019 From India, Mumbai
Though an employee gets wronged and unnecessarily made to suffer economically by his employer, at times, it would not be advisable to take recourse to strict legal remedies. As administration is ultimately in the hands of many people in a hierarchical fashion, just a delay or lackadaisical approach in a stage can cause enormous delay in the final disposal/clearance in employee matters particularly like F&F settlement. Even in Government Service where there are clear cut rules to settle the dues to employees on their termination, some times, their own colleagues in service delay things inadvertently or otherwise making the ex employee run from pillar to post. These observations are not intended to justify such delays or to calm down the affected person. On the contrary, they are pointers to the ground reality and make one get thoroughly prepared.
15th May 2019 From India, Salem