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STech   28 November 2015

Leave encashment not paid on separation

Hello all forum members and legal advisors

I need some suggestion and help on the following issue:

I am in the field of IT. Worked with reputed MNCs for 6 years before I joined a Investment bank in Technology department in their captive unit in Bangalore recently.

The salary offered was good and it is a big brand. But soon after joining, I felt the work culture and environment was not good and very disturbing and stressful. I decided to join back at another IT company and resigned from the bank during probation period and served full notice period and completed all exit formalities properly.

I was employed here for only 3 months.

In my offer letter there was no mention of the fact that I cannot take leaves during probation period.

After joining I was told as per company policy I cannot take leaves during probation period of 3 months but after that leaves accumulated during this period can be availed. There were more such things where there was lack of transparency in offer letter.

Annual earned leaves were 20 per annum. Approximately 5 days of leave should have got accumulated during my tenure with the company. I did not take any leaves. The company's HR helpline confirmed I should get the leave encashment with full and final settlement as per policy but they need input from direct manager.

Now, 1 month after leaving the company, I received the full and final settlement amount and salary slip, relieving letter and tax computation sheet but no leave encashment has been paid.

HR Helpline of the company suggested to write to direct manager and he needs to confirm for leave encashment payment. I have written to him but don't think he will co-operate as I left within 3 months and part of the reason for leaving was him.

I want to know:

- What is the exact law/rule as per labour law regarding leave encashment in India?

- What is the section / reference where I can point to them that this is the rule?

- What kind of action I take if they refuse to pay the leave encashment?

This leave encashment amount should be approx Rs 15000 if paid as per full gross salary. So, not willing to ignore it.

Also, they have delayed issue of relieving letter by more than 1.5 months. And did not even provide a proper resignation acceptance letter on company letter head before leaving. Finally, now I have received the relieving letter. I wanted to raise this issue also against them as I read somewhere it is mandatory for company to provide a relieving letter / service certificate / resignation acceptance letter on company letterhead on or before last working day which they did not comply to.

Please suggest.

Regards



Learning

 6 Replies

Kumar Doab (FIN)     28 November 2015

You can demand to supply acknowledgment and acceptance of resignation.

IT companies/IT Divisions and private banks for private gains are covered by Shops and estbs Act.

YOu may look into the Act for leave entitlement and rate of leave encashment.

Company can provide superior benefits and but not inferior.

The probation period has nothing to do with eligibility of the leave.

STech   29 November 2015

Thanks Kumar ji. I have written to them. Will seek further help here based on the response.

Regarding Shops and Estb act. - my limited search on internet suggested there are different rules for different states. How do I know which state's act my company is under?

Can you please help me locate the official shops and estb act clauses or their official website which I can show to the HR of the company.

Is there any action I can initiate if the company doesn't agrees to pay leave encashment and/or for the already done delay in issuing relieving letter.

Kumar Doab (FIN)     29 November 2015

You were located in Bangalore and posted in office at Bangalore.You may look into Karnataka Shops & Estbs Act. The number of annual leave and rate @ of payment is clearly described.

 

At the website of Dept. of Labor you will find directory of officials and also List of Trade Unions.

IT /ITeS employees have formed unions and trade unions have embraced them.

Private bank employees also formed unions.

YOu can lean on them.

 

If you are unable to resolve approach an able Labor Law Consultant.

 

STech   30 November 2015

I got a reply from the HR team that leave encashment is at manager discretion which is shocking! I have written to the manager but don't think he will reply or do anything. How should I proceed further on this? Please guide me. Do I need to be concerned about any kind of retaliation from the company? I have recieved the relieving letter already.

STech   30 November 2015

Would really appreciate if someone can help me word a proper response to them quoting the law. I am not able to put it firmly and in a legal tone. Please help

Kumar Doab (FIN)     01 December 2015

If the mentioned Act applies and you are covered by the def. of  "employee' as in the Act seek recourse.

If you are covered by the def. of 'workman' as in ID Act seek recourse.

IBA also advises on service conditions and rules.

If Bank falls within its purview you may go thru the  same.

You are unneccessarily entangled with HR and Manager.

 

Write to good offices of appointing authority,MD,Chairman.

YOu can even approach bank employee's unions/Trade Unions.

 

If you are unable to resolve approach an able Labor Law Consultant.

 


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