'Earned' Leave

Assistant Manager (Law)

In some PSUs employees 'EARN' leave say @ 1 day for serving/ working in the organisation for 11 days. The organisation also has a rule that an employee should give three months notice in writting before resignation. I have two questions:

(i)   Can the said period of three months notice be adjusted against the balance earned leave of the employee (assuming that the employee has more than 90 days earned leave to his credit)?

(ii)   Is it legal/ logical/ reasonable/ justified on the part of the organisation (Public Sector) to say at the time of resignation of the employee that whatever 'Earned' leave the employee has to his/ her credit would be forfeited? 


Requirement of giving three months' notice is for the benefit of the management and it is open for the management to give up the advantage. Provision is for the benefit of the management in order to enable them to make necessary arrangements. Much depends on the Service Rules as applicable to the organisation.

Also in the absence of any statutory provision or terms of contract between the employer and employee which can entitle the employer to deny claim towards earned leave, the employer would be liable to pay to the employee the amount towards encashment of the earned leave.


Adv P & H High Court Chandigarh

I think the major part of your quarry is to get knowledge whether the period of 3 notice months can be adjusted by employee in his earned leave and answer to this quarry is NO. This notice period cannot be adjusted whereas the employer can compensate otherwise.

Manager Legal & Compliance

Dear Suneel,

As regards to your querry that whether earned leave can be adjusted against Notice Period, the answer would be yes, if at all the service conditions provide for the same.

Secondly, no company can forfeit Earned Leave, as the same is against the priciples of Law, because, leave are prescribed under the statute, which cannot be forfeited by the whims and fancies of the employers.


Senior Law Officer

Dear Mr. Ashish,

Me and Suneel are in the same company. Our EL (earned leave) encahshment rules provide that all unavailed EL shall lapse on resignation. Is there any law which provides for encashment of unavailed EL at the time of resignation.






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