Dear Anand,
It is no strange case, as already stated by our worth member Mr. Dinesh Divekar and I also wish to reiterate it, no Law absolutely no Law restrict any employee to take leaves during notice period. However, it should not be mixed with handing over of duties. Employee has duty to proper handover his duty to the person coming at his place or to a person who has been assigned to take handover from him during his notice period. if the employee do not properly handover his duties to the assigned person within his notice period the management has full right to not to issue him relieving letter. However you cannot stop him from taking leave. Also no employment contract is above Law, if any employee who is entitled for any leave under any act i.e. Shops and Establishment Act, Sales Promotion Employees Act or Factories Act or any other act for that matter, he can avail the same during his employment term without restriction of any Employment contract.
Any Service condition stipulated under any Employment Contact, if violates any Law of the land then it is Null and Void or Void-ab-initio.
Mr Suresh it is not the matter of big or small Management, it is correct practice. We must answer then what is correct as per Law because if they cross any law in finding any practical solution, that solution may seem easy at that moment but might land them in legal trouble afterwards and mind it no Authority will listen this thing that they did not follow the law because it is a small company or just a small proprietorship firm.
Ms Nandita,
I also like to comment on one thing of yours, which is not correct though some companies follow that which is wrong, that leave encashment should be done on basic. I am elaborating the same below by taking the Legal definitions. It should be done on gross.
23. Wages during leave. -Every employee shall he paid for the period of his leave at a rate equivalent to the daily average of his wages for the days on which he actually worked during the preceding three months,exclusive of any earnings in respect of overtime but inclusive of dearness allowance.
According to Section 23 of Delhi Shops and Establishment Act and this provision is same in all such acts an employee shall be paid for his leave @ daily average of his wages. Now lets see what definition of wages given in the Act
Section 2 (30) “Wages” means wages as defined in section 2 of the Minimum Wages Act, 1948 (XI of 1948);
Section 2 Sub Section 30 says the wages definition should be taken from Minimum Wages Act. So lets see what the definition of minimum wages has to Offer. Please find below the definition of Wages under Minimum Wages Act.
(h) "wages" means all remuneration, capable of being expressed in terms of money, which would, if the terms of the contract of employment, express or implied, were
fulfilled, be payable to a person employed in respect of his employment or of work done in such employment, 1*[and includes house rent allowance], but does not include--
(i) the value of--
(a) any house-accommodation, supply of light, water, medical attendance, or
(b) any other amenity or any service excluded by general or special order of the appropriate Government;
(ii) any contribution paid by the employer to any Pension Fund or Provident Fund or under any scheme of social insurance;
(iii) any travelling allowance or the value of any travelling concession;
(iv) any sum paid to the person employed to defray special expenses entailed on him by the nature of his employment; or
(v) any gratuity payable on discharge;
Now if we see the wages definition it includes all remuneration, capable of being expressed in terms of money and it specifically says HRA included. So as per definition it includes all allowances, all heads whatever you give to them by whatever name you call them. Only Exceptions given are those specifically given under the Definition.
Now let us take them one by one
Value of house-accommodation, supply of light, water, medical attendance. As amply clear that the companies who provide boarding and lodging facility to their employee have to exclude the value of it from wages. HRA will be included though. the items specifically excluded by government will also be excluded.
(ii) any contribution paid by the employer to any Pension Fund or Provident Fund or under any scheme of social insurance; PF or ESI contributions are excluded.
(iii) any travelling allowance or the value of any travelling concession; TA is Excluded
(iv) any sum paid to the person employed to defray special expenses entailed on him by the nature of his employment. The expenses to defray special expenses shall be excluded only if they relate to the nature of his job.
(v) any gratuity payable on discharge; This will not be counted.
So now as per the definition, the wage for leave would be Gross not just plain simple basic salary.
Mr. Divekar your views are invited on this....