Leave encashment equivalent to salary, employees shouldn’t be deprived: Guj HC

In an important judgment, Gujarat High Court ruled that the leave encashment of an employee is like salary, and depriving them of it is a violation of the constitutional right.

Justice Moksha K Thakkar of the high court dismissed the writ petition of the Amdavad Municipal Corporation (AMC) challenging the order of the Labour Court regarding payment of leave encashment to retired employees.

The court further said that the claim of the retired employees of AMC is based on the certificate issued by the corporation itself and therefore it cannot be said that the Labour Court has erred in awarding in favour of the retired employees.

“Depriving a person of leave encashment without a valid statutory provision is a violation of the constitutional provision,” said the court.

If an employee has availed a leave and the employee has opted to have his accrued leave credited, the cash amount becomes his right and in the absence of any authority, that right cannot be violated by the petitioner.

The Labour Court had ordered the AMC to pay the retired employee of the AMC in cash amount of ₹1,63,620. The court also imposed a fine of ₹1,000 on the AMC. AMC had then filed a writ petition in the Gujarat High Court.

Opposing the petition on behalf of the respondent employee, it was stated that leave encashment is a right of the employee and the authorities are bound to pay the leave in cash. The corporation cannot refuse to pay it without any reasonable or logical reason.