If Employee Has Chosen To Accumulate His Earned Leave, Then Encashment Becomes His Right: Gujarat HC

The High Court further added that in the absence of any authority that right cannot be infringed by the petitioner Corporation.

The petition, before the High Court, was filed under Article 226 and 227 of the Constitution challenging the award passed by the Labour Court whereby the application preferred by the respondent came to be allowed and the petitioner was directed to pay arrears of leave encashment of Rs 1,63,620 with cost of Rs.1,000.

The Single-Judge Bench of Justice M. K. Thakker said,“Leave encashment is akin to salary which is property and depriving a person of his property without valid statutory provision is violation of the provision of Constitution of India.

Advocate H S Munshaw represented the Petitioner while Advocate Nirav C Sanghavi represented the Respondent.

It was the case of the petitioner that the respondent herein was having educational qualification of SCC pass and was offered the work in the year 1975 and he worked upto the year 1981. Thereafter, appointment of the respondent was made on the post of Turner in 1982.

As the Respondent failed to clear the departmental exam his position kept on changing from Helper to Junior Clerk. The respondent filed a Civil Suit before the Civil Court against the reversion order and due to interim relief his service was continued on the post of Junior Clerk, the suit was finally disposed of with a direction to the Authority to consider the case of the respondent sympathetically. The respondent voluntarily gave up the opportunity to appear for the exam and he was reverted to the post of Helper.

He tendered his resignation voluntarily without depositing of notice pay for one month informing. In the absence of the notice pay the resignation remained unaccepted. As the respondent remained unauthorizedly absent his application for the benefit of leave encashment for ten months amounting to Rs.2,82,703 unattended. The recovery application came to be filed before the Labour Court praying to grant the benefit of leave for 10 months which came to be allowed by the Labour Court and the same was the subject matter of challenge before this Court.

The Bench was of the view that the certificate awarded by the Corporation was not disputed by the petitioner Corporation & it couldn’t be said that there was no pre-existing right. As per the Bench, the Labour Court rightly held that the application was maintainable under section 33(c)(2) by the Industria Disputes Act.

It was noted that as per the service regulation, within a period of 90 days, communication has to be sent to the respondent about the acceptance or rejection of the application. However, for seven months there was no intimation given to the respondent.

As far as the claim of unauthorized leave was concerned, it was undisputed that there was no departmental proceedings initiated claiming that this period would be considered unauthorized leave or any intimation was addressed to the respondent to resume duty immediately in the absence of a deposit of one-month notice pay. “As there was no acceptance for the period of three months no necessity arose for payment of one month notice pay”, it added.

Considering the fact that the claim of the respondent was based on a certificate issued by the Corporation, it couldn’t be said that the Labour Court committed error in awarding the reference in favour of the respondent.

“If an employee has earned the leave and employee has chosen to accumulate his earned leave to his credit then encashment becomes his right and in absence of any authority that right cannot be infringed by the petitioner Corporation”, the Bench clarified.

Thus, dismissing the Petition, the Bench confirmed the order of the Labour Court.

Cause Title: Ahmedabad Municipal Corporation v. Sadgunbhai Semulbhai Solanki (Case No. R/Special Civil Application No. 12834 of 2018)

Appearance:

Petitioner: Advocate H S Munshaw

Respondent: Advocate Nirav C Sanghavi

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