Encashed leaves akin to salary, denying it violates rights: HC

Encashed leaves akin to salary, denying it violates rights: HC 

TIMES NEWS NETWORK 03,012025

Ahmedabad : Depriving an employee of leave encashment earned by him is a violation of constitutional rights, the Gujarat high court said, dismissing a petition by Ahmedabad Municipal Corporation (AMC) against a labour court’s order directing the civic body to pay leave encashment due to a retired employee. Upholding the labour court’s order, 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 a violation of the provision of the Constitution of India. If an employee has earned the leave and chosen to accumulate his earned leave to his credit, then encashment becomes his right and in the absence of any au thority, that right cannot be infringed by the petitioner corporation.” Sadgunbhai Solanki had joined AMC as a technical department employee in 1975. 

He was a junior clerk in 2013, when he was demoted to the post of helper as he did not clear a departmental exam for promotion. Solanki tendered his resignation on March 5, 2013, but AMC did not respond to his resignation for seven months. It set a one-month notice as a condition to accept his resignation. However, no resolution was reached and Solanki superannuated on April 30, 2014. When Solanki demanded encashment of his earned leave, which came to about ₹2.80 lakh, AMC refused to pay. The civic body said he remained on unauthorised leave after tendering his resignation, and therefore was not entitled to the benefit. Solanki approached a labour court, which ruled in his favour and directed AMC in 2018 to pay him ₹1.60 lakh towards leave encashment. AMC challenged the order in HC, where Solanki, through his counsel Nirav Sanghavi, argued that the corporation gave all the retirement benefits to him by treating him as retired from March 2013, and not 2014. Hence, AMC’s argument of the employee remaining absent and not having 

enough earned leave did not hold water, he said. Since AMC did not respond to Solanki’s resignation, he was deemed to have retired within three months, according to the service rules, the lawyer submitted.