Leave Entitlement During Notice Period: What Are the Legal Requirements and HR Policy Norms?

I am writing to inquire about the general rules regarding leave entitlement during the notice period in a corporate setting. What does the law say about this? Is it mandatory to mention this rule in the HR policy handbook of the company?

Validity of Verbal Notice Period

Is a verbal notice period valid? For example, if an employee is told to stay at home for 3 months and look for a job, with the company agreeing to pay the salary for those 3 months, but all of this is communicated verbally, is this notice period valid? Please advise.

In my view, since an employee works during the notice period, they earn leave for that period and are thus entitled to it. The leave policy on earned leave (EL) can usually allow for such interpretation unless a company expressly prohibits the accrual of leave during the notice period. Since this issue often troubles employees, it would be beneficial to include it in your HR manual as the purpose is to clarify rather than confuse matters.

Regards,
B. Saikumar
HR & Labour Law Advisor
Mumbai

Just to add, we do not follow any concept of earned leave, casual leave, sick leave, etc. We simply allow annual leave of 23 days in a calendar year.

What can be done in such a case?

As you have asked in your earlier query about earning annual leave during the notice period, Mr. Saikumar has rightly said. Of course, we will not be able to comment on the number of leave days provided by you because it depends on the state where your office is located. Secondly, it depends on whether you are covered under the Factories Act or the Shop and Establishment Act.

Regards

Jyoti, as Saikumar said, because the employee is actively on the payroll during the notice period, he/she should be entitled to all normal benefits.

To further clarify, if part or full notice period is waived, the day the employee ceases to be on the payroll, all pay and benefits stop. Hope this helps.

I am not sure whether I agree with this. Technically, it may be correct that a person continues to earn benefits while on the payroll. However, we seem to forget that all employment is a contract, and a contract contains within it certain commitments, privileges, and benefits. When the time for separation comes, we are working towards the satisfactory conclusion of a contract. The notice period is the time for the conclusion of one's commitments. As such, the period of concluding one's responsibilities should not attract a benefit other than the stipulated salary, as it is incumbent in the contract to discharge one's commitment.

A contract is a bilateral commitment from both parties. When the employee fulfills their part of the contract by attending the office during the notice period to fulfill their commitments, the management is also obligated to provide the benefits permissible under the leave policy, which is a part of the contract. A contract holds more sanctity when both parties fulfill their commitments in both letter and spirit, rather than expecting one party to sacrifice their rights.

Regards,
B. Saikumar
HR & Labour Law Advisor
Mumbai

Thank you so much for your valuable inputs. They have been helpful, and the final decision we have made is that the employee will continue to receive benefits until their last working day. Therefore, the employee is entitled to annual leave during the notice period.

Thank you.