Leave Policy Dilemma: Can Resigned Employees Lose Their Accrued Leave?

Can we have a clause stating, "All the leaves (casual, sick, earned) stand canceled once the employee resigns from his/her current position"? I went through quite a few threads/discussions in CiteHR but couldn't find the information I was looking for.

It is always clear that any employee leave stands canceled when he/she resigns from the company. However, the encashed or unavailed earned/privileged/annual leave has to be compensated according to their basic pay up to the date of resignation.

As per the government rules, it is clear that when any employee leaves the organization, he won't be entitled to any leave. There is no need to include any clause.

If you have any more doubts, please let me know.

Thanks

Regards

Thank you, Giri! We have casual, sick, and earned leaves at our organization, and we do not have an encashment policy. We have been canceling all the leaves once the employee resigns, and any leaves he/she avails result in Loss of Pay. I was a little apprehensive about what we have been practicing and hence this post.

I understand from your reply that the unavailed leaves (whatever category they fall under) should be compensated to the employee. And since the government says so, does the employee have a right to proceed legally?

Only the earned leave has the right for compensation, and all other leaves are automatically canceled and not authorized for compensation. Do not confuse yourself with other leave considerations.

Thank you.

Regards,

Dear Shravanti, how can a company incorporate a clause forfeiting earned leave (EL) when it is opposed to the Factories Act 1948 or Shops Act, like the Bombay Shops Act, which permits an employee to encash unavailed leave to the extent of the limits permitted under the respective laws? If the leave policy is under the contract of service (not falling under the sphere of law), probably such a stipulation may be possible.

Regards,
B. Saikumar
HR & Labour Law Advisor
Mumbai
[Phone Number Removed For Privacy Reasons].