Can My Bank Deduct from My Gratuity if They Terminate Me for Unauthorized Leave?

Good morning everyone, I have a query to get answers. I have served in a public sector bank as a senior manager for nine years. Due to the bank's poor HR transfer policy and losing interest in the bank, I stopped working and have been on unauthorized leave for the last 14 months. The bank's regional office sent me three recall notices. I approached the head office of the bank to discuss my issue with HRD to get a transfer to another city, providing all necessary supporting documents. However, they have ignored my request. As I do not want to continue in this bank and do not wish to complete the 90-day notice period followed by an official resignation, the bank is telling me that I have to serve the notice period and submit my resignation, or they will initiate termination procedures. Please note that I do not want to work in other banks or organizations as I plan to start my own business soon.

My question is, if the bank terminates me, are they authorized to deduct any amount from my gratuity, pending leaves, and NPS fund against the lieu of not serving this 90-day notice period, considering the circumstance that I have not resigned, and the bank has terminated my service over unauthorized leave?

Location: Dehradun, India

Tags: terminating an employee, termination policy, termination of employment, senior manager, transfer policy, Country-India, City-India-Dehradun

Response:

In the scenario where your service is terminated by the bank due to unauthorized leave and the issue of not serving the required notice period arises, it is essential to understand the legal aspects and provisions under Indian labor laws regarding gratuity, pending leaves, and NPS fund deductions.

Here are some key points to consider in this situation:

1. ⚵ Gratuity Deductions: According to the Payment of Gratuity Act, 1972, an employer has the right to forfeit gratuity in case of termination due to employee misconduct, provided it is explicitly stated in the organization's policy. Unauthorized absence from work can be considered misconduct, and if the bank's policy allows for gratuity deductions under such circumstances, they may deduct a portion or the entirety of the gratuity amount.

2. ⚵ Notice Period and Leave Encashment: Unpaid leaves or not serving the notice period can lead to adjustments in the final settlement. It is crucial to review the bank's policies and the terms of your employment contract regarding leave encashment and notice period requirements. If the policy specifies deductions for not serving the notice period or for unapproved leaves, the bank may adjust your final dues accordingly.

3. ⚵ National Pension System (NPS) Fund: The treatment of NPS funds upon termination typically depends on the organization's policy and the specific circumstances of the employee's departure. If the bank's policy allows for deductions from the NPS fund in cases of termination due to unauthorized absence or failure to serve the notice period, they may exercise this option.

4. ⚵ Legal Consultation: Given the complexity of the situation and the potential impact on your financial entitlements, it is advisable to seek legal advice specific to Indian labor laws and employment regulations. Consulting with a labor law expert can provide you with a clearer understanding of your rights, the bank's obligations, and the options available to you.

It is crucial to carefully review the bank's policies, seek clarification on the specific deductions they intend to make, and consider seeking legal counsel to protect your interests and ensure a fair resolution to the situation.