Hi All,

Leaves are calculated basis "CALENDER YEAR" & not "FINANCIAL YEAR"!!

Wanted to get better clarity on it. How does it create a difference? Accordingly are we violating the law if the leave period is from April to March instead of Jan to Dec? What is the best practice keeping the law in place that one should follow?


Leaves encashment is on "BASIC" & not "GROSS"!!

We en-cash the balanced leaves on Gross Salary considering the fact that when employee consumes paid leave we make statutory deductions on Basic/Gross whatever the case may be. Hence if s/he does not avail leave he is eligible for entire Gross Pay & not only Basic.

Further it raises one more question; Have heard that PF / ESIC contribution should be made on the amount of encashed leaves!! True?? Is that the reason for leave encashment to be considered on Basis??


Generally there are 3 forms of leaves viz Privilege / Earned leave (PL/EL), Casual Leave (CL) & Sick Leave (SL) out of which only PL gets carry forward or encashed at the end of year & rest two forms lapses. What if a companies do not have such bifurcations & has only one term say CL, which they DO NOT CARRY FORWARD & compulsorily encash at the end of year. Is the law violated?


Awaiting clarity from seniors on all the three issues raised.

From India, Ahmedabad
1. Leave calculation for Financial Year

Law provides for calculation for Calendar Year. However, there is no violation of law if leave is calculated for Financial year. It is the spirit of the law one should see. as long as you do not reduce the number, taking the year from april to Mar is perfectly alright. I have implemented this one organisation where I worked and Inspectors do not question this.

2. Leave Encashment on Basic|

It has been the pratice to pay encashment on Basic and DA alone. In those days allowances normally include HRA, Conveyance Washing allowance etc. If a person takes leave, he has to stay in the same house. I have signed settlements for encashment indicating that Conveynace allowance washing allowance and HRA will not be included purely on the logic that these facilities are work related. However some organisation do pay all allowances now without applying any logic. I suggest organisations can draw their own conslusion on this by allying some logic suited to them. I still hold the iew that logically there is no need to pay allowances like HRA Conveyance etc.

Madras High Court has given a judgement saying that PF should be paid on leave encashment

3 Having one form of leave

Factories Act provides for Earned leave and Shops Act provides for Earned Leave and Medical leave as well Earned Leave in all legislation need to be carried forward . One cannot merge all leave and make it lapse at the end of the year even if the number is more.

From India, Chennai
Dear All,
Can any one guide me to know about the paternity leave policy in Indian Organizations?
Ideally how many days are allowed for the same ??
Awaiting for your valuable guidance.
Ambreen Shaikh
HR Executive

From India, Pune
Indian companies do not give paternity leave
It is not mandated by law either
In fact asked for such a leave is probably a negative in your career plan
Ofcourse if you have accumulated leave, you can use those in such a case, and no one will object

From India, Mumbai
I fully agree with our member Mr. Sivasankaran. This is a perfect and complete clarification. Nothing more to add. However we have a practice of encashing the full salary (including HRA & Conveyance) as leave encashment ONLY at the time of an employee retires from the services of our Organization. Of course this is a good gesture from our management to employees. We also can keep/carry forward 90 days PL/EL to the credit.

From India, Ahmadabad
Dear Hiral,
I am working in a central PSU(A LEADING PSU).We can accumulate P/L and S/L upto 120 days and 300 days respectively.I do not agree with what Saswata bannerjee says because we DO HAVE a Paternity leave of 15days in our organisation.The same was started some 10yrs ago.

From India, New Delhi
Dear Hiral, One more thing.PL is credited for 30days and CL for 10days on 1stApril every year.S/L is credited for 10days on the 1stJanuary every year !
From India, New Delhi
You are lucky
This is the first case of paternity leave I know of in india
There must be more that I am not aware of
Will appreciate if you can message me th ename of the company separately for my knowledge

From India, Mumbai
Paternity leave is now being offered by most companies as benefit which is not mandatory. This leave normally ranges from 3-7days for the individual.
From India, Bangalore
Thank you all for your remarks & comments.
While on the same lines I would like to ask what if an employee is on leave since a month (met an accident & has been advised bed rest; esic etc is being taken care by company) & is going to be on leave for next 2 months or so. In such a case, is he eligible for PL, CL, SL? His wages are being considered by ESIC.
Pl note that out here employee (in general) is eligible for 1.5leave credit every month.
Advice solicited.

From India, Ahmedabad

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