Clearing leave during notice

QUESTION

Dear HR Community

We have an employee who has resigned and is currently serving the requisite notice period.

As the employee still has annual leave available, we want the employee to clear the annual leave.

But the employee insists on encashing the annual leave.

As the employer, can we insist that the employee clear annual leave and not encash it?

We are in the manufacturing industry.

Susan

HR Poll: Can we insist that the employee clear annual leave and not encash it?

Yes: 41.27%

No: 36.51%

Maybe: 22.22%

REPLIES & COMMENTS

If stated in the policy in the first place, then it will not depend on employee and employer negotiation - AM

Mutual agreement - Keith

It all depends on the company policy and mutual agreement. It is not mandatory to encash annual leave. However, if the employee is unable to clear his annual leave due to official work reasons then the company may have to consider encashing his annual leave - Ed

Whether to encash or clear the annual leave balance, it can only be done upon mutual agreement between employer and employee - CYC

Unless there is no policy, then encashment is allowed - LHL

There is a difference between offsetting the notice period with annual leave and going on approved annual leave during the notice period. An employee can decide to use his annual leave during the notice period, in which case he will receive his salary for the full notice period. In this case, there is no instance of bringing forward the last day of work and he is considered to be an employee of the company until the last day of the notice period. He can join the new company only after the last day of his notice period. Any unused annual leave can be encashed by the employee. Please note, that the employee cannot be forced to go on annual leave during the notice period. You may encourage the employee to clear the annual leave for job interviews/ job search - Nora

The employer can request to off-set the notice period from annual leave so as to bring forward his/her last day of work if that is the company practice - PSY

Please refer to your Employment Contract or Employee Handbook if it's stated that Employee may be asked to clear leave during the notice period. You can talk to the employee that this is the company's practice - Jessica

The company should state in the employment contract how annual leave should be treated. This includes whether it can be encashed, carried forward, or forfeited. This will avoid disputes and unhappiness - Geetha

When a staff is serving notice, they should in fact be working for the whole notice period so as to clear their work and also hand over of duties. Any leave application during this period from the employee is at the discretion of the employer to approve or not. For your company to insist staff clear leave is not right and any decision should be on mutual agreement between employer and employee - MK