Encashment of Earned leave of worker

Hi all,

Can you please help me out on labour matter.

A factory worker who has applied for encashment of Earned leave. He has a balance of 105 days and want to encash 60 days.

Is it allowed and what is the basis? Can you give me reference to this issue in Factory's Act 1948.

As per the agreement with Union - only casual leave is encashable.

Would appreciate your inputs.

Regards,

Rajat

Hi Folks,

Got the answer and here it is...

As per Section 79 of Factories Act 1948, it is enumerated that :-
Provided that the total number of days of leave that may be carried forward to a succeeding year shall not exceed thirty in the case of an adult or forty in the case of a child.

http://www.vakilno1.com/bareacts/factoriesact/s79.htm

However there has been recent amendments in 2002 via The Small Enterprises( Employment Relations) Act 2002 which is applicable to whole of India.

Under chapter IV - conditions of work , clause no 11 point 4 mentions that

A worker shall be permitted to accumulate leave upto 45 days in addition to the leave entitlement of the current year earned on the basis of the work done by him in the previous year and he shall be entitled to encashment of entire accumulted earned leave including leave earned during the current year pro rata in case his services are terminated or he quits the service.



http://upgov.nic.in/indusdev/governm...abour_1520.PDF


Regards,

Rajat

hi,

this was quite informative.

dips

__________________
Deepali Arora,
Noida.

Hi all,

Just to confirm whether we are liable to deduct PF on leave encashment of workers?

If so please help me to provide the links to confirm the same.

Regards,

Rajat

Hi rajat,

Dont have a link, but the circular was issued by the Employees' Provident Fund Organisation dated 16 May, 2005 that wef 01/10/1994 Leave encashment paid/payable to the employees covered under the EPF Act shall attract PF and hence all employers must deduct @12% from such Leave encashment paid/payable to its coverable employees wef 01/10/1994 and must deposit the matching contribution @12%.


Regards,

Anuradha Zingade

Hi Anuradha,

Many thanks for the help...just checked the website of PF but no avail..with the above reference shall approach the authorities to get the notified circular..

Hmm..why should pf deduction be made leave encashment as neither parties get the benefit? Does it get accumulated in the accounts of employees PF account?..

Cheers,

Rajat

Hi All,

The law statements clearly states the leave encashment as per the prorata and also during the termination of his tenure/resignation. But i just need to know what should be conditions/procedures when an employee applies for the leave encashment during his period of employment. In our case we have just now announced that maximum number of contribution will be 90 days only. Those who have more than this will either have encash it or have to avail the leave. Now i want to clarify that the leave encashment has to be done on the basis of current Basic Salary or Last year Basic Salary.

please reply.

nand joshi

Hi All,

The law statements clearly states the leave encashment as per the prorata and also during the termination of his tenure/resignation. But i just need to know what should be conditions/procedures when an employee applies for the leave encashment during his period of employment. In our case we have just now announced that maximum number of contribution will be 90 days only. Those who have more than this will either have encash it or have to avail the leave. Now i want to clarify that the leave encashment has to be done on the basis of current Basic Salary or Last year Basic Salary.

please reply.

nand joshi

i too would like to know

Bhavna Bhadka