Facing Legal Action Over Employee's Notice Period and Leave: What Are My Rights?

I am running a small IT company in Gujarat, registered under shops & establishments. Recently, I am facing legal action for not paying the salary of an employee who did not serve the notice period of a month and took more than 5 CL in a month. I have attached the appointment letter. I would like to understand how legally binding the terms specified in the letter are and what protection I can receive in the following cases:

1. If an employee does not inform about leave or takes more than 5 casual leaves in a month.
2. If an employee does not serve the notice period.

Best Regards

Compliance with Gujarat Shops and Establishment Act

Your offer letter is drafted by a non-HR person who is not aware of compliance. If you are registered under the Gujarat Shops and Establishment Act, your leave policies and employment rules should be in accordance with the provisions of the said act. Five days of casual leave in a month, in my opinion, is not in accordance with the relevant law.

Salary Payment Obligations

Even if we assume that the job offer is a contract between your company and your employee, you have not mentioned anywhere that you will not pay him. You have only mentioned that you will not make payment of basic pay. Salary is a mix of basic pay and allowances, so you are supposed to pay the rest of the salary, even by your own admission.

Legal Implications of Employee Resignation

As it is obvious that the outgoing employee has gone to court, be prepared to pay his salary. According to a court judgment, the employer-employee relationship does not end with the employee putting in his notice; it continues until the last day of his work, and salary is the employee's right.

You should consult a legal adviser, but in my opinion, the court will make you pay.

Hi! Thanks for your time. Yes, you are right; it is written by me and one of my ex-employees.

Casual Leave Policy

Regarding casual leave, can't you keep a ceiling on the maximum leave per month?

Notice Period Violation and Payment

Regarding paying for notice period violation, except for basic pay, there is no additional allowance.

Regards

Leave rules are governed by the Shops and Establishment Act of respective states. You will have to check the actual act to see what the provisions for leave are for the state in which your company is operating. Casual leave is given to meet personal needs or some other exigency, and it's not leave without pay. If you give 5 CLs each month, then your employee can take 60 days of leave with no deductions, then 4 offs each month which comes to 48 days, and 5 national holidays in a year; so the total loss of working days will be greater than or equal to 113 in one year.

In my opinion, you should consult someone to have your policies framed in a proper manner.

Hi! Thanks for detailing. I'm in consultation with a labor advocate. 5 CL is the maximum per month, and it is leave without pay. So, according to you, will they consider it as paid leave?