On September 9, 2024, the Punjab Finance Department issued an important notification concerning the monthly payment of leave encashment for government employees who have refused to avail of Leave Preparatory to Retirement (LPR). This notification is aimed at streamlining the leave encashment process for government employees and ensuring that the payments are made in a structured and timely manner.
The notification specifically refers to a letter from the Section Officer (Budget-I) of the Government of Punjab, School Education Department, bearing No. SO(Budget-I)1-26/2023, dated June 21, 2024. This letter outlines the procedural details and the revised rules for leave encashment for those who choose not to take LPR.
Background and Purpose of the Notification
Under the standard government rules, employees are generally entitled to leave preparatory to retirement (LPR) before they retire from government service. However, some employees may choose to forgo LPR for various reasons. In such cases, the government has allowed these employees to receive leave encashment instead. The leave encashment is provided to employees in lieu of the leave they would have taken had they opted for LPR. This leave encashment is paid in addition to the employee’s regular monthly income.
The new notification builds on previous rules, specifically Rule 17(2) through I(c), which was amended in June 2023 through the Notification of the Finance Department No. FD.SR.II/2-97/2019, dated June 1, 2023. This amendment provides clear guidelines for the payment of leave encashment in lieu of LPR.
Key Provisions of the Notification
The revised rule, as per the notification, stipulates that the leave encashment in lieu of refused LPR will now be paid on a monthly basis. Importantly, the leave encashment will be calculated at the initial pay of the pay scale of the employee. This is in addition to the employee’s regular monthly salary and is meant to compensate for the leave that was not availed.
The Finance Department’s decision to make this payment on a monthly basis offers employees a steady and predictable form of financial support, which can help with their financial planning during their retirement process.
Administrative Guidelines
The notification also calls the attention of the administrative departments to Rule 17(2) through I(c), which clearly specifies the entitlement of employees who refuse to take LPR. The monthly leave encashment in lieu of refused LPR is intended to ensure that employees do not face financial strain upon their retirement when they have opted out of taking leave.
The notification emphasizes that the employees receiving leave encashment will continue to be paid their full monthly income, including the encashment amount. This is seen as a beneficial step towards ensuring that government employees are not financially disadvantaged during the transition into retirement.
Moreover, the notification points out the amendment made in June 2023, which clarified the manner in which leave encashment is to be calculated. The encashment is to be paid at the initial pay of the pay scale on a monthly basis, which may offer a more predictable and transparent approach to leave encashment.
Conclusion
This notification marks a significant step in improving the leave encashment process for government employees in Punjab, especially for those who choose to forgo LPR. By providing leave encashment on a monthly basis at the initial pay scale, the Finance Department aims to ensure that employees are fairly compensated for their unused leave while maintaining a stable financial income as they approach retirement.
This update should provide greater clarity and ease for employees who may be considering refusing LPR, ensuring that they can make well-informed decisions about their retirement plans. The administrative departments are now required to align with these provisions, ensuring that the process is carried out efficiently and in compliance with the updated rules.
