Handling Unpaid Leave During Notice Period: Can We Deduct Pay in Final Settlement?

Hi all, please share your expert advice on the following. When an employee submits their resignation and is serving the notice period, they may take leave without pay or be absent without providing information. In such a scenario, can we consider these days as unserved notice days and deduct the payment for those days in the Full and Final Settlement (F&F)?

Regards,
Rajvir

Hi,

There is no statutory obligation on the employee's side that leave should not be availed during the notice period. For instance, sickness during the notice period cannot be neglected just because the employee serves the notice period. However, in general, most employers insist on completing the notice period without leave.

Leave without information during the notice period

Leave without information during the notice period is different, as it amounts to misconduct. Therefore, you cannot apply the same scale for all cases, and it depends on the situation; a decision may be taken accordingly. If an employee proceeds on unauthorized leave for more than 2-3 days, the employee can be advised to extend the notice period or consider the period of absence as leave without pay.

Leave-informed cases

For leave-informed cases, while 1-2 days of leave can be neglected, anything beyond that, the candidate can be advised to extend the notice period.

Hi Rajvir,

As an HR professional with extensive experience in labor laws and company policies, I would advise against deducting payment for unserved notice days in the Full and Final settlement (F&F) when an employee takes leave without pay or is absent without providing information during their notice period. It is important to review the company's policies and the employment contract to determine the appropriate course of action in such scenarios.

Additionally, consulting with legal counsel may be necessary to ensure compliance with labor laws and regulations. It is crucial to handle such situations with sensitivity and in accordance with established procedures to avoid potential legal repercussions.

Thanks.