The Kerala High Court has ruled that an employee who leaves his service either on retirement, voluntary or otherwise, or on resignation, does not have entitlement or inherent privilege to claim for leave encashment unless it is otherwise enabled by the statute, rules, or norms regulating the conditions of service.
The order was passed by the Division Bench composed of Justice Alexander Thomas and Justice C. Jayachandran.
Case Background
Sudeep Kumar resigned from the company after 21 years of service. However, he was eligible for the benefits he did not receive the earned leave encashment benefit. He also filed a petition before a single judge.
In the previous hearing with a single judge, the company was ordered to provide leave encashment to the employee, arguing that such payment constituted a component of the salary.
The respondents in W.P.(C)No.10980/2010 (the National Insurance Company and its officials) are the appellants herein.
The instant writ appeal is preferred challenging the judgment dated 2.3.2023 of the learned Single Judge in the writ petition afore referred, which directed the respondents therein to pay the leave encashment due to the petitioner therein, together with interest at the rate of 6% per annum, within two months from the date of receipt of a copy of the judgment.
As per the superannuation and retirement are governed by Clause 4 of the Scheme and Clause 5 speaks of determination of service.
The earned leave encashment is dealt with in Clause 4(5) which is extracted here below:-
“(5)**(a)When an Officer or a person of the Development Staff has earned leave to his credit according to the rules framed by the Corporation of the Company but has not availed of the same till the date of retirement, he may be paid cash equivalent of leave salary in respect of the period of earned leave at his credit as on the date of retirement, subject to a maximum of 240 days.”
“Provided that this paragraph shall not apply to an Officer or a person of the Development Staff referred to in sub-paragraph (4) of this Paragraph and those referred to in paragraph 5 below.”
The order was shared by the verdict which can be read by a click here.