Hello, everyone. I'm going through a strange case. I'm working in a Pharma company, and recently, one of my employees resigned from the job. Now, he would like to go on leave, whereas we do not allow leaves for an employee who has resigned. Is it mandatory not to allow him the leaves, or is it a company policy?
When I asked him why he cannot avail the leaves, he mentioned that the leaves are to be availed from his balance leave. Could anyone please provide information on this?
Thank you.
With warm regards,
Anand
From India, Kolkata
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When I asked him why he cannot avail the leaves, he mentioned that the leaves are to be availed from his balance leave. Could anyone please provide information on this?
Thank you.
With warm regards,
Anand
From India, Kolkata
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Hi Anand,
This depends on the company's policies. Some companies allow employees to use their leaves on short notice, where the balance leave can be compensated for notice. On the other hand, some companies do not allow this practice.
Especially regarding EL (earned leave), the company will pay only the basic amount in F&F. However, if an employee avails the leave on short notice, they can use the full day's gross pay, resulting in a loss for the company, although not significant.
I hope the above information helps you understand that there is no specific policy for availing leaves on short notice.
From India, Bengaluru
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1This depends on the company's policies. Some companies allow employees to use their leaves on short notice, where the balance leave can be compensated for notice. On the other hand, some companies do not allow this practice.
Especially regarding EL (earned leave), the company will pay only the basic amount in F&F. However, if an employee avails the leave on short notice, they can use the full day's gross pay, resulting in a loss for the company, although not significant.
I hope the above information helps you understand that there is no specific policy for availing leaves on short notice.
From India, Bengaluru
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Once an employee resigns, they sever the contract from their side and, therefore, cannot avail leave. However, normally, companies' leave policies provide for the encashment of leave balance on the date of resignation. If you do not have a policy, then you must allow leave encashment at the time of leaving the service by the employee as per the Factories Act or the Shops & Estb. Act of your State, depending on the applicability of the Act to your establishment.
B. Saikumar HR & Labour Relations Advisor Navi Mumbai
From India, Mumbai
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B. Saikumar HR & Labour Relations Advisor Navi Mumbai
From India, Mumbai
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Dear Anand,
Separation from the company and employee leave are two separate issues. Why these were linked is not understood. Withholding leave during the notice period could be a company-specific issue and it does not have legal sanction. No law says that on receipt of the letter of resignation from the employee, the employer is free to withhold the leave of that employee.
Companies talk a lot about how they are employee-friendly or what engagement activities are conducted in their company. But by designing this kind of policy, it shows how this talk is superficial. On receipt of the letter of resignation making that person *persona non grata* is nothing but eyewash of the HR practices.
Whether the Factory Act or Shops and Establishment Act, either act says that for every 20 days of work, the employee becomes eligible to get a day's leave. This rule continues till the last working day of the employee. Therefore, whether to avail of the balance leave or encash it is a choice of the employee, and if the organization does not interfere in the personal choice, the better.
Thanks,
Dinesh Divekar
From India, Bangalore
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Separation from the company and employee leave are two separate issues. Why these were linked is not understood. Withholding leave during the notice period could be a company-specific issue and it does not have legal sanction. No law says that on receipt of the letter of resignation from the employee, the employer is free to withhold the leave of that employee.
Companies talk a lot about how they are employee-friendly or what engagement activities are conducted in their company. But by designing this kind of policy, it shows how this talk is superficial. On receipt of the letter of resignation making that person *persona non grata* is nothing but eyewash of the HR practices.
Whether the Factory Act or Shops and Establishment Act, either act says that for every 20 days of work, the employee becomes eligible to get a day's leave. This rule continues till the last working day of the employee. Therefore, whether to avail of the balance leave or encash it is a choice of the employee, and if the organization does not interfere in the personal choice, the better.
Thanks,
Dinesh Divekar
From India, Bangalore
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In the instant case, as said by Shri Dinesh Divekar, leave and resignation are separate issues. The period of serving notice is the period of working with the company, as the employee is bound to provide services during the notice period. Therefore, availing leave and encashing it in lieu of taking the leave are different activities.
From India, Arcot
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From India, Arcot
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Dear Anand,
Your company is right in not allowing leave to an employee who has already resigned. According to the service contract, every employee must serve notice and work physically during the notice period to enable the employer to find a suitable replacement. All learned members have advised you the same. Moreover, in exigencies of work, the company may, at its sole discretion, refuse leave requested or revoke leave already granted.
In this particular case, you can mark him absent for his unauthorized absenteeism and also deduct the full notice pay applicable to his category, legally. However, you have to pay him the balance leave encashment as per your company policy. You may also delay his full and final settlement to fulfill the company policy regarding the notice period in writing. (Provided your appointment letter has no clause stating "either party can terminate the service contract by giving ___ month notice or to pay salary/wages in lieu of notice).
Regards,
Suresh
From India, Thane
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Your company is right in not allowing leave to an employee who has already resigned. According to the service contract, every employee must serve notice and work physically during the notice period to enable the employer to find a suitable replacement. All learned members have advised you the same. Moreover, in exigencies of work, the company may, at its sole discretion, refuse leave requested or revoke leave already granted.
In this particular case, you can mark him absent for his unauthorized absenteeism and also deduct the full notice pay applicable to his category, legally. However, you have to pay him the balance leave encashment as per your company policy. You may also delay his full and final settlement to fulfill the company policy regarding the notice period in writing. (Provided your appointment letter has no clause stating "either party can terminate the service contract by giving ___ month notice or to pay salary/wages in lieu of notice).
Regards,
Suresh
From India, Thane
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Dear friends,
Sometimes, I wonder why companies waste their time on small issues like stopping the leave of a person who is in the notice period. What is going to be achieved from this? Just a cynical pleasure and nothing else!
Most companies have at least a 60-day notice period. Within this period, a person may take a 10-day leave. What will the company gain by making that person work forcefully? Unfortunately, CEOs create these nonsensical rules, and HR ends up following them.
CEOs and HRs need to understand that employees are their brand ambassadors. What employees say about the company during and after their employment matters a lot. Can HR explain how enforcing these kinds of rules will lead employees to speak positively about their company? With this misplaced coerciveness, can HR effectively engage their employees?
For Mr. Suresh: You mentioned that, "as per the service contract, every employee has to serve notice and work physically during the notice period to enable the employer to look for a suitable replacement." I am unsure how the process of arranging a replacement can be hampered if the employee is not physically available. It is HR's responsibility to arrange a replacement while the employee works in their department. If a few days of absence disrupt the replacement process, then either the organization has a serious issue, or it shows evidence of HR's ineffectiveness, at least in that company.
Thanks,
Dinesh Divekar
From India, Bangalore
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Sometimes, I wonder why companies waste their time on small issues like stopping the leave of a person who is in the notice period. What is going to be achieved from this? Just a cynical pleasure and nothing else!
Most companies have at least a 60-day notice period. Within this period, a person may take a 10-day leave. What will the company gain by making that person work forcefully? Unfortunately, CEOs create these nonsensical rules, and HR ends up following them.
CEOs and HRs need to understand that employees are their brand ambassadors. What employees say about the company during and after their employment matters a lot. Can HR explain how enforcing these kinds of rules will lead employees to speak positively about their company? With this misplaced coerciveness, can HR effectively engage their employees?
For Mr. Suresh: You mentioned that, "as per the service contract, every employee has to serve notice and work physically during the notice period to enable the employer to look for a suitable replacement." I am unsure how the process of arranging a replacement can be hampered if the employee is not physically available. It is HR's responsibility to arrange a replacement while the employee works in their department. If a few days of absence disrupt the replacement process, then either the organization has a serious issue, or it shows evidence of HR's ineffectiveness, at least in that company.
Thanks,
Dinesh Divekar
From India, Bangalore
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Dear Divekar Ji,
I think we are providing solutions or rather discussing for the employees, HR of small-scale, medium, and large organizations. What you are presuming is applicable to large size or MNCs, where a group of people is working in one department. But what about the small-size company, where one employee handles multiple functions and when he leaves without any notice period, the small organization's work suffers. In order to look for a suitable replacement and to have a smooth handover/takeover, to train the newcomer, etc., the physical presence of a leaving employee is a must.
Large size organizations/MNCs always have their own competent HR and/or advisers with them. So, as far as my knowledge goes, normally, they don't seek any advice from Cite HR. My submission was for small-size organizations, where practically this type of problem exists. Besides, when an employee is leaving for better prospects, he or she should always remember whatever knowledge he/she gains during his tenure of employment is just because of the organization where he worked.
When companies terminate employees for misconduct, that is injustice, and when an employee resigns and disappears without notice, that is justified. My intention is not to hurt anyone's feelings or disagree with anyone's solution. What I wish to share and submit is my practical experience with employees and employers of medium size and large size/MNCs. What I learned from my experience is that in India, every employee and employer behave/act as per his convenience/benefit. There are no healthy relations between employees and employers, which existed 3 decades ago.
Tnx & Regds,
Suresh
From India, Thane
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I think we are providing solutions or rather discussing for the employees, HR of small-scale, medium, and large organizations. What you are presuming is applicable to large size or MNCs, where a group of people is working in one department. But what about the small-size company, where one employee handles multiple functions and when he leaves without any notice period, the small organization's work suffers. In order to look for a suitable replacement and to have a smooth handover/takeover, to train the newcomer, etc., the physical presence of a leaving employee is a must.
Large size organizations/MNCs always have their own competent HR and/or advisers with them. So, as far as my knowledge goes, normally, they don't seek any advice from Cite HR. My submission was for small-size organizations, where practically this type of problem exists. Besides, when an employee is leaving for better prospects, he or she should always remember whatever knowledge he/she gains during his tenure of employment is just because of the organization where he worked.
When companies terminate employees for misconduct, that is injustice, and when an employee resigns and disappears without notice, that is justified. My intention is not to hurt anyone's feelings or disagree with anyone's solution. What I wish to share and submit is my practical experience with employees and employers of medium size and large size/MNCs. What I learned from my experience is that in India, every employee and employer behave/act as per his convenience/benefit. There are no healthy relations between employees and employers, which existed 3 decades ago.
Tnx & Regds,
Suresh
From India, Thane
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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....
From India, New Delhi
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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....
From India, New Delhi
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