Disciplinary Suspension and Leave: What Cases Have Said About Earning, Encashment, and Restoration
When an employee is placed under suspension during disciplinary proceedings, the effect on leave is one of the most under-examined questions. Here is what the cases have settled.
Suspension during disciplinary proceedings creates a specific and unusual position with respect to leave. The employee is technically in service, drawing subsistence allowance, but is not on duty. Three questions then arise: does leave continue to accrue during suspension; can leave be encashed during suspension; and what happens to the leave balance if the suspension is followed by exoneration, removal, or compulsory retirement.
Does leave accrue during suspension?
The position is that EL and HPL do not accrue during the period of suspension. The two semi-annual credits (1 January and 1 July) are deferred during the suspension period. If the employee is exonerated and the period of suspension is treated as duty by the disciplinary authority, the leave credits are restored retrospectively.
Can leave be encashed during suspension?
No. Leave encashment is admissible only on retirement, superannuation, resignation, or termination. A suspension does not terminate the employment relationship. Encashment during suspension is therefore not available.
What happens on conclusion of proceedings
Exoneration with suspension period treated as duty: Full restoration of leave credits and encashment rights as if the employee had been on duty.
Exoneration with suspension period not treated as duty: The period is treated as leave (EL/HPL/EOL as the case may be) at the discretion of the disciplinary authority. Encashment treats this period accordingly.
Penalty of removal or compulsory retirement: Leave encashment for the EL balance at the date of removal is generally admissible, subject to the terms of the penalty order and the rules. Some specific penalties (dismissal for grave misconduct) may forfeit encashment rights; the order must specify.
Detailed treatment of the leading service-law cases on suspension and leave (including the Krishnaiya line of cases on exoneration), the position when suspension is followed by minor penalty, and the practical workflow for restoration of leave credits will follow in a forthcoming update.
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