Headline: Earned leave equals earned cash: Court

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Caption Photo 1: Justice Kuldip Singh

Caption Photo 2: Punjab teachers . . . on retirement, they’ll be now able to cash out accumulated leave.

In a significant judgment, the Punjab and Haryana High Court has ruled that retired employees of government-aided privately managed schools in Chandigarh are entitled to encashment of their earned leave.

The development is significant as seven such aided schools are running in Chandigarh. The ruling by Justice Kuldip Singh came on a petition filed some five years ago against the UT Education Department Secretary and other respondents by Hoshiar Singh and other retired employees of government-aided privately managed schools.

They were seeking directions to the respondents to grant them the benefit of leave encashment in sync with instructions issued by the respondents from time to time and also in view of the Supreme Court decision in an appeal. They were also claiming 12 per cent annual interest on delayed payment from the due date till its realisation.

Taking up the matter, Justice Kuldip Singh asserted that leave encashment was a payment made to a retired employee in lieu of earned leave not availed by him. An employee was paid full salary even if during service he or she availed of earned leave.

The provision for leave encashment was apparently made to encourage employees to work more during service.

Justice Kuldip Singh asserted: “Apparently, the management does not want that the work of teaching should suffer on account of employees taking leave during service with full pay on account of their entitlement…. Therefore, I am of the view that leave encashment is a part of the salary.”

Justice Kuldip Singh added that the Chandigarh Administration was releasing 95 per cent grant-in-aid to the privately managed aided schools. The UT stand was that “it is for the management to pay the leave encashment”.

As such, the Chandigarh Administration was admitting that leave encashment was to be paid to the employees of UT-aided schools. “Therefore, it is held that the leave encashment is payable to the retired employees of the aided schools of the UT”.

Allowing the petition, Justice Kuldip Singh concluded that leave encashment was to be paid by the management of UT-aided schools since it was part of the salary.

“The petitioners are held entitled to leave encashment as per the instructions dated June 2,  2010,  issued by the Chandigarh Administration. However, at the same time, since the leave encashment is a part of the salary, the management shall be entitled to claim it as a part of the salary in grant-in-aid from the respondents…

“The arrears of leave encashment to the petitioners shall be released within three months…along with interest at the rate of 9 per cent per annum from the date of retirement till its realisation.”