‘Leave encashment is worker’s right’: HC directs bank to pay ex-employees dues from accrued PLs

The Bombay High Court recently held that “leave encashment is akin to a salary, which is a property and depriving a person of his or her property without any statutory provision would violate Article 300 (no person to be deprived of property without authority of law) of the Constitution.”

“If an employee has earned a leave encashment and has chosen to accumulate his or her earned leave to his credit, then encashment becomes his or her right,” the bench said.

In observing so, the bench held that the petitioner ex-employees of a Vidarbha-Konkan Gramin Bank were entitled to leave encashment and the bank cannot refuse the benefit of encashing privilege leave and that the same was “arbitrary”. It directed the bank to pay the leave encashment amount to the petitioners, along with an interest rate of 6 per cent annum within the following six weeks.

The bench noted that Wainganga Krishna Gramin Bank had been amalgamated with Vidharbha Konkan Gramin Bank in 2013 and that new regulations were formulated thereafter.

A division bench of Justices Nitin M Jamdar and M M Sathaye passed a judgement in a plea by Dattaram Atmaram Sawant (57) and his wife Seema, who had resigned after serving the bank for over 30 years in 2015 and 2014, respectively.

The court held that the retired petitioners had not lost their right to encash their privilege leave just because they resigned from the services of the respondent bank.
Dattaram was appointed assistant manager of the bank in 1984 and Seema was appointed as a cashier in the same year. Dattaram’s resignation was accepted on July 31, 2015, while Seema, who sought to take voluntary retirement in 2014, asked the bank to consider her concerned letter as resignation letter since the bank did not have provisions of voluntary retirement. She was relieved from service on September 30, 2014. While Dattaram was entitled for nearly 250 days of privileged leave, Seema had 210 days of privilege leave at her credit.

After tendering their resignations, the petitioners had requested the bank to have their privilege leaves encashed, however ythey did not receive any response for over two years. In January, 2018, the bank told them that the leave encashment facility came into existence only in September, 2015, after petitioners had resigned.
Aggrieved by the same, the couple approached the HC through advocate Shailendra Kanetkar, stating that their total dues were worth over Rs 10 lakh.

The bench observed that “leave encashment is recognised as a right by the courts and can only be restricted by another statutory provision empowering the employer to withhold it”.

It added that the 2015 circular that formulated new regulations “did not bring about any new situation but only reiterated the existing position of law. Therefore, the bench held that the bank cannot claim that only after said circular, the right of encashment of privilege leave accrued to the resigned employees and held they were entitled to succeed”.

Source: The Indian Express