Can I Use Accumulated Leave to Shorten My Notice Period? Seeking Advice

Notice Period and Leave Adjustment Query

A company's policy states that the notice period is 30 days. Suppose an employee has submitted his resignation letter on 1st June, stating that he wants to work until 30th June. According to the company policy, an employee can avail of 40 leaves (PL=20, SL=10, & CL=10) in a calendar year. He has not availed of any leave. Therefore, he will accumulate 40/2 = 20 leaves by 30th June. He wants to work until 10th June and wishes to adjust 20 accumulated leaves against the notice period. Is it possible?

Adjustment of Leave During Notice Period

Adjustment of leave with a notice period is possible only if management agrees. As such, there is no law for leave adjustment with a notice period. An employee has to serve the full notice and clear all dues before getting a No Objection Certificate (NOC) from the company. Additionally, a company can deduct a day's salary or "as applicable" if an employee takes leave during the notice period.

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Notice period can be adjusted only with the PL, and not with SL/CL. Once the employee decides to submit the resignation, the leave balance will be taken into account up to the date of resignation only. Hence, in this case, the employee has to serve the notice period up to 22nd June if he has a PL balance of 8 days (up to May month).

Adjusting Leaves During the Notice Period

Adjusting leaves during the notice period is entirely at management's discretion. Most companies do not allow an employee to take leave during the notice period to ensure a smooth handover. In such cases, if an employee takes leave during the notice period, their notice period is extended proportionately. Additionally, the notice period can be adjusted only against PL (Paid Leave) and not with SL (Sick Leave) or CL (Casual Leave).

Most companies don't allow taking leaves during the notice period, as has been already mentioned by other members.

Adjustment of the paid leaves is done in the full and final settlement of the employee. Either the employee gets the payment for those days, or it just gets adjusted against any amount the employee owes to the company.

With the consensus from management, the notice period can always be made a little shorter depending on the criticality of the employee's position.

Hope this helps.

Regards,
Nisha

It is possible to adjust accumulated leave against the notice period if the company's leave policy allows for the accumulation of leaves. Even under such circumstances, management will not encourage employees to do so if the employees in question are hardworking and efficient.

Thank you!

Most companies will also credit the leave to the employee's account at the end of the year. So, if he is leaving halfway through the year, there will be no leave available to his credit.

Rules Under the Factories Act

If the person is working under the Factories Act, the rules in the standing orders will apply.

With regard to the granting of leave during the notice period, it is purely at the discretion of the management as it is meant for a smooth handover and knowledge transfer (KT). The outgoing employee does not have a say. The employer can relieve him even before the end of the notice period if he wishes to do so.

Encashment of Accrued Leave

Encashment of accrued and unavailed earned leave for the current year is possible through full and final settlement (FF) for all permanent full-time employees. Casual Leave (CL) and Sick Leave (SL) do not form part of encashment, as our members have already stated, and we agree with their views.

Regards.

The practice is very simple and it is already explained by "Pragnaa HR Compliances" in their recommendations above. Please be very firm that only PL can be adjusted if at all the employee wants to adjust leave against the Notice Period. SL & CL, if any, before the relieving date generally lapses as unavailed leave. Instead, clever employees go on leave and produce SL Leave including a Medical Certificate if required, and in practice, nothing can be done just like that.

Regarding CL, employees availing CL and then reporting for duty in the next 1-2 days with the reason for leave as "Very Personal/Urgent/Domestic Reasons," etc., again nothing can be done.

It is better to understand that only PL can be adjusted against the notice period. Else, if the management does not wish to adjust, they may deny the leave for grant, expect the employee to continue till the end of the notice period, and during settlement, they will pay the PL money including the current year eligibility as part of the settlement.

For practical purposes, understand that management can only extend the relieving period by citing reasons that handing over is not done properly if the employee fails to appear for the job during the notice period but vanishes with proper permission. Legally, only loss of pay can be marked at max, and the period of relieving extended. That is all. No management can just terminate an employee just for the reason during this notice period, which is always understood wrongly by many.

Above all, granting leave PL, though it is PL, is management's priority; they cannot deny - but they can postpone granting leave on the dates required, which we are aware of.

Regards,

Please tell me if my management allows adjustment of leaves in the notice period. Will it be paid or not? For example, if one employee had to serve a notice period of 30 days, and served 19 days with 11 annual leaves adjusted in the remaining notice period, will the 11 days' salary be paid or not? How will the final settlement be handled?