R.N.Khola
Labour Laws & Ir
Joshinand
Hr Operations
Pon1965
Construction
Rajat Joshi
Hr Consulting ,trainer -creative Thinking
Awvik
Service
Azing_00
Hr Professional
Rath_ratikanta
Management Student
+5 Others

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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

From India, Pune
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.
<link no longer exists - removed>
Regards,
Rajat

From India, Pune
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
From India, Pune
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

From India, Pune
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

From India, Pune
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.. Plz explain Leave Ruls & Earned Leave Encashment Act under Shops & Commercial Estblishment Act. regards, Rashmi
From India, Bangalore
Dear Rajat,
You cannot encash PL if you have an agreement with the union for encashment of Casual leaves only. It doesn't matter what the law states. Cause the agreement with the union is also an established and applied law for your concern.
Regards

From India, New Delhi
Dear Rajat,
No, you are not entitled to deduct Pf on leave encashment, as leave encashment is not considered as wages. Please search the web for the judgement given by The Honourable Supreme Court on this.
Regards

From India, New Delhi
Mr.Awvik is right. Pl. follow the link for more details.
Leave encashment not included in wages for PF calculation: SC - India - NEWS - The Times of India

From India, Lucknow

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