Yes, it is mandatory for an organization in Karnataka, as well as the rest of India, to encash unused earned leaves (EL) of an employee at the time of their resignation.
This is as per the Shops and Establishment Act, which is applicable in Karnataka and many other states in India. According to this Act, an employee is entitled to the cash equivalent of the leave balance at his credit at the time of his termination, resignation, retirement, or death.
However, the terms of leave encashment can vary based on the company policy and the employment contract. So, it would be advisable for the employee to review their employment contract and also discuss the matter with their HR department for clarity.
Here are the general steps an employee can take:
1. Check the employment contract or company policy regarding EL encashment.
2. If it is not clear, consult with the HR department.
3. If there are any disagreements or disputes regarding the encashment, it may be necessary to seek legal advice.
Remember, understanding your rights as an employee is crucial. If your employer does not adhere to these laws, they can be held legally accountable.