PAYING OF LEAVE WAGES - IS IT COMPULSORY?? - factories act.. CiteHR
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PAYING OF LEAVE WAGES - IS IT COMPULSORY??

srinaren Started The Discussion:

Friends,
We all know that each employee (whether it is a worker or staff) who works for 240 days is elgible for earn leave @ 20 leaves per year. This EL is encashable at some Organisations and some will allow to carry forward to a prefixed no. of days, over and above the accumulated leave will lapse. At the time of leaving the organisation, while calculating the Full and final settlement the leave which the employee/staff is holding at his/her credit will be encashed and paid. Legally speaking, this is the facility given by the Factories Act and Labour Act, that those who work 240 days will earn their leave and it is their legal right.

Now, my question is that some Organisations feel that this need not be paid while an employee leaves the organisation.

What are your comments/views on this subject. Am eager to know your views.
-Srinaren

Rahul Sethi - Contributing Member
Srinaren

We are talking about a group of people where some of them have leaves available to their credit only because they have not availed them by the reason becoz company doesnot allow them to leave responsibility for a long time whereas others are enjoying their leaves time to time.

how can we make this diffrence, as soon as we clear this problem we just need not pay anything.

This is my thinkinking.

Dont know what others got so about.

Rahul :o

srinaren - Contributing Member
Dear Rahul,
This is not for a particular group of people who do not avail the leave. According to the Factories act, Section 14 says that the leave can be accumulated to an extent of 180 days and at a stretch 90 days of leave can be availed. Encashment is allowed upto 120 days.

It could be that the employee himself has not availed and sincerely attended his work or part of the leave he has utilised and balance he has accumulated. In either case, it is his legal right as regards the leave which he has earned.

My question was that at the time of leaving, whether the Management is bound to pay the wages for the leave he has at his credit and settle his account or not?

Awaiting more responses on this subject.

-Srinaren

tsivasankaran - Contributing Member
Mr Srinaren

Where is the doubt? If I am right the Factories Act was amended to this effect way back in 1978 or 1979

It is applicable to Mines Act and Shops and establishments Act as well

To my knowledge, earned Leave is handled only in these legislations

Legally employer has to calculate earned leave upto the last working day and encash

This is a legal requirement and if some one is doing otherwise it must be more due to ignorance rather than any specific logic.

All legislations cover all employees irrespective of their wages

Am I clarifying enough??


Siva

srinaren - Contributing Member
Dear Siva,
You are right! But unfortunately this question arises now and then. Our fraternity is under a cloud in the eyes of the Management. Many a times the Management feels the HR people are not protecting the interest of the Organisation and this payment need not be done. As you said, the Management may be ignorant but this puts lot of pressure on the HR people. I want our friends to come out with their views, opinions so that there will be a clear cut opinion on this.
-Srinaren

tsivasankaran - Contributing Member
Dear Mr Naren

I am coming across with lots oe queries in this cite on Leave and procedures. These questions look very trivial on the face of it. But I do recollect that when I started my career I had all these doubts and took sometime to grasp. After seeing all these queries, I am planning to prepare a consolidated procedure manual and I will circulate the same in the next 15 to 20 days time. I think you all can go thru make amendments and this can be a reference manual on leave procedure.

There are issues like whether prefixing of sunday is allowed or if a holiday falls in between, then what happens
There is no readymade answer All depends on how we calculate the Leave.

Thanks

Siva

mrangan - 
Friends,

I know a company where management is encashing the EL at the time of retirement only and reduce the EL Encashment limit from 240 to 60. Does management has the right to reduce this limit at any time. Please clarify.


Mukesh

L.Kumar - Contributing Member
Dear Srinaren
Please note that leave is accumulated by employees, because they were not allowed to avail the leave due to organisational work pressure imposed on the employee. Therefore, it is appropriated that leave encashment to be given. Also it is accumulated for even surrender against their notice period and for so many reasons leaves are accumulated in employees account.

Against your question, the answer is Yes---
L.Kumar

Madhu.T.K - Senior Member
Although leave is not a matter of right of an employee, surrender of leave unavailed is defenitely a right. Unless otherwise provided in the Standing Orders of the company, an employee has every right to get his leave surrendered.

Regards,

Madh.T.K

Govil Nanda - Contributing Member
Dear Friends


Please refer to sec- 22 regarding leaves of the Delhi Shops and Establishment Act, 1954. It explains everything about the encashment of leaves. Even i'm facing the same problem regarding the encashment of leaves, but still my management is after my life to find means and ways to avoid encashment of leaves.


Regards


Govil Nanda



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