Absence during the notice period aren't permitted. Therefore, it automatically becomes unscheduled leaves, if availed under unavoidable circumstances. Any leave taken during the notice period, extends the duration by the equal number of days.
The objective of notice period is basically to enable the employer to find a replacement and train him suitably to take up the assigned tasks. During this period, the presence of the outgoing employee is essential. If an employee remain absent during this period, for whatever period of time; it disturbs the schedule.
As per law encashment of unavailed/balance leave is payable even in the case of dismissal of employee. Therefore insist on resigned employee to comply with the notice period and pay him encashment of balance leave, if due to the employee.
Pls find attached High Courts Judgments and Central Rules on leave encashment for your reference & record.
Regards,
Suresh