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Topic: Can Leave Balance mandatory to adjust with Notice Period
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VIKASH SHROFF
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Can Leave Balance mandatory to adjust with Notice Period
10-28-2022 / 1:03 pm #1
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Company “A” hire a person who is working with company “B”.
As per the terms of the appointment, in case of separation, both parties (The person and Company “B”) must need to give notice of 90 days/ 3 months or notice pay in lieu of notice.
During the interview process, the person informed same to company “A” when company “A” offered him to join with a month’s notice.
Company “A” assured the person to reimburse 60 days’ notice pay salary whatever the person needs to pay to company “B” in lieu of such period of notice.
Accordingly, the person has put his papers with a notice of 15 days instead of 90 days and paid the notice pays of 75 days. The same has been accepted by company “B” and the person got released after 15 days of notice from company “B”
At the time of F&F, company “B” issued the following statement to the person
Sec. A.: Payable by company “B” to the person
- Outstanding salary for last month
- 15 days’ salary
- Yearly Bonus on prorate basis
- Leave Encashment based on the presence of the person throughout the year till the last working days
Sec. B.: Recoverable from the person to Company “B”
- Applicable Tax on Sec. A
- 75 days short notice payment recovery
Sec. C.: Sec. A – Sec. B = Net Recoverable/(Payable) by the person to company “B” or viz a viz
Accordingly, the person paid the F&F amount to Company “B” and got his clearance and other reliving documents from Company “B”.
Now, after joining, company “A”, when the person submitted a claim for his reimbursement of 60 days’ notice payment which he paid to company “B”, company “A” HR asking the person to adjust his Leave Encashment with his notice pay and instead to reimburse agreed 60 days period of notice, they are forcing the person to accept the reimbursement of the net of days of short notice (60 days Less leaves earn by that person in company “B” during his tenure in company “B”)
Is this act of company “A” right? If yes, what are the grounds for the same?
If not, what the person needs to do for his rights?
Requesting every senior and professional here to kindly assist with a well-accepted argument supported by law and logic.
Will be grateful for case study support on the above too (If available)
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