Hi Everyone, Please suggest if Privilege or Earned Leave should be paid during the F&F procedure, if yes and the employer is not paying it off then what should an employee do? Also, can PL or EL be used against the notice period to waive it off to the extent of PL balance? Is it optional to do so?
From India, New Delhi
It depends on the situation. If the company has already found a replacement, you can allow the employee to adjust the PL against the notice period and relieve him earlier. on the other hand, if his presence is very important during notice period, you can refuse to accept any leave requests and ask him to regularly available for knowledge sharing and then encash the PL along with full and final settlement.

Un availed PL should be paid to the employee at the time of exit. It is unfair and legally unacceptable to hold it. If the employer does not pay it he can approach the Labour officer and file a complaint. If he has been working in a supervisory/ managerial capacity, he cannot get the protection of labour law and the labour officer will not help him.

From India, Kannur
Dear Priyanshi,

Earned Leave which is called by other names as Annual Leave with Wages under the Factories Act,1948, as Privilege Leave under most of the State Shops and Establishments Acts and Leave with Wages under the Model Shops and Establishments ( Regulation of Employment and Conditions of Service ) Rules,2016 can be encashed by the employee on the termination of his employment and certainly no employer can refuse to pay it.

The failure or refusal to pay the wages for such leave balance on termination would give rise to a claim u/s 15 of the Payment of Wages Act,1936 for such sum shall fall within the definition of ' wages ' u/s 2(vi)(d) of the same Act.

However adjustment of EL balance against the notice period to be served under the exit clause of the contract of employment is a matter left to the sole discretion of the employer. As you know that notice period on unilateral termination or resignation of the employee is a crucial period for the employer to find a suitable substitute and getting the incomplete works done by the exiting employee so that the work flow of the organization is not disturbed. That's the general reason for refusal of leave of any kind during notice period.

If the employer has no objection, it can be allowed.

From India, Salem

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