Struggling with Unfair Leave Adjustment in Final Settlement: Can I Challenge This?

I resigned from a large Gurgaon-based Indian company 2 months ago as Assistant General Manager-Sales & Marketing after working for 6 years with the company (I was an individual contributor with no team).

Issue with Full and Final Settlement

In my full and final settlement, the company is not adjusting my leftover leaves against my balance notice period. To be precise, I had 80 leaves remaining. In contrast to my 3 months' notice period, I served a 22-day notice period. Therefore, during my full and final settlement, the company is crediting me for the basic salary for 80 leaves, but they are deducting basic salary + HRA for the notice period not served, i.e., 68 days. I find this treatment unfair. Can somebody please advise me on how I can challenge them? Can I file a complaint with the Labour Commissioner's office in Gurgaon? Your valuable input will be highly appreciated.

Regards

The company should have paid your salary for 12 days to be fair. However, you can't go to the labor commissioner as you are not a workman, and the issue now is not an industrial dispute.

Regards,
Varghese Mathew

Thank you for your valuable input. Could you please advise me on what steps I should take next? How can I challenge the employer and retrieve my hard-earned money from them?

Thank you.

Seeking Guidance on Labour Dispute Resolution

You can make a complaint to the Labour Department no matter what your position was in your company. At least a Labour Officer can give you proper guidance and options. If you are not satisfied with the Labour Department, you can seek legal advice from an Advocate who specializes in handling labor-related cases. Online sites are also available to provide assistance and guidance.

In your case, ensure that you have not signed any company policy that includes the Full and Final Settlement procedure, as it is being presented to you now. Before taking any legal action, you must send a letter to the company requesting the full and final settlement figure along with your opinion and ask for a written response explaining why they do not agree with you.

I have exchanged about 30 emails with them. Finally, they have responded that the full and final settlement is done based on company policy. Yes, at the beginning of every year, they used to get a 10-page policy document signed by all employees. Also, my appointment letter does not mention leave adjustment or how the shortfall in the notice period will be treated. They are telling me that my request for leave adjustment against the notice period has not been approved by them internally—this they have finally communicated via email after avoiding a direct answer in about 30 emails.

In some companies, the leaves are not adjusted against the Notice Period/Pay. The same has happened in your case too. They have taken your 80 leaves' basic salary as Leave Encashment towards your unused/leftover leaves and adjusted 68 days' gross pay against the shortfall of your Notice Period/Pay. I hope you have understood, and this helps in resolving your query. Please speak to your HR before proceeding with any complaints/legal issues.

Yes, this is what they have done. They have credited the basic salary for leaves and deducted the basic salary plus HRA for notice period recovery. They are citing company policy for doing this. However, I find this unfair and unethical. What I want to know is if it is in accordance with labor laws. Only if they are in violation of the law would I want to explore legal action.

Labor law does not address whether encashment should be paid on gross or basic salary. Legal assistance may not be helpful in this situation. This is my view; let's wait for seniors to respond.