Denial of Leave Encashment is Violation of Constitutional Rights

The Gujarat High Court has ruled that denying an employee their earned leave encashment violates their constitutional rights. The judgment came as the court dismissed a petition by the Ahmedabad Municipal Corporation (AMC), which sought to challenge a labour court’s directive to pay leave encashment dues to a retired employee.

Key Judgment Highlights

Justice M.K. Thakker, presiding over the case, upheld the labour court’s ruling. He stated:
“Leave encashment is akin to salary, which is property. Depriving a person of their property without valid statutory provision is a violation of the Constitution. If an employee earns leave and chooses to accumulate it, encashment becomes their right. In the absence of any legal authority, that right cannot be infringed by the petitioner corporation.”

The Case Details

The case involved Sadgunbhai Solanki, who joined AMC in 1975 in the technical department. By 2013, Solanki was a junior clerk but was demoted to a helper position after failing a departmental exam. Solanki submitted his resignation on March 5, 2013. AMC delayed its response for seven months, imposing a one-month notice period as a condition for acceptance. No resolution was reached, and Solanki retired on April 30, 2014.

When Solanki sought encashment of his accumulated earned leave, amounting to approximately ₹2.80 lakh, AMC denied the request. The civic body argued that Solanki was on unauthorized leave after tendering his resignation, disqualifying him from the benefit.

Court’s Ruling

The Gujarat High Court rejected AMC’s argument and directed the corporation to comply with the labour court’s order. The court emphasized that earned leave encashment is a constitutional right and cannot be denied arbitrarily.

Significance of the Judgment

This ruling underscores employees’ rights to claim benefits accrued during their tenure. It emphasizes that such entitlements, including earned leave encashment, are protected under constitutional provisions and cannot be withheld without valid legal grounds. The judgment sets a precedent, reinforcing the principle that employers must honor the rights of their employees, even post-retirement.