Dear Sirs,
I am employed in a medium scale industry in Coimbatore. Recently a discussion has come up on whether leave encashment benefit is to be made on gross salary or only basic+DA portions. Some are saying it should be on basic + DA only. Can any of seniors help me by clarifying the above wityh reference to a factories act clause.
Thank you all very much in advance for your help in this matter.
Best regards

From India, Tirupur
If you are in a factory you are governed by the Factories Act which is silent on leave encashment during service.But it says that if a worker avails leave he shall be paid wages for it@ average of total full time earnings during previous month excluding OT .The same logic may be applied for encashment also.

From India, Thiruvananthapuram
Thank you Sir,
This is my suggestion to management. However, some officials feel that it should be only on Basic + DA. Without a proper back up facytories act clause I am unable make it stick.
Thanks again.

From India, Tirupur
Dear Mr. Dixit, Thanks for the confirmatiion. Is there any official citations or judgements which I can use for substantiation? Thanks again for your continued support. Kumar
From India, Tirupur
Hi , It may be gratuity or leave encashment or overtime or PF deduction for all this Basic + DA is the base for calculation . You can refer the acts . Regards Rajeev Dixit
From India, Bangalore
If you are a factory leave encashment, in terms of sec.80, has to be computed not on basic + DA but at the rate of daily average of full time earnings excluding O.T for the days he acatually worked during the month preceding the month in which he avails leave.

From India, Mumbai
Recently i am posed with another issue on earned and other leave.
I am told that the an new employee can avail his earned leave only after completing 240 working days in a calendar year. Will this mean he will accrue EL at 1/20 days but can use them only after completing 240 work days? Also since the term calendar year is used, how this is to be applied to an employee appointed during middle of a calendar year?
Can you please help me with an answer so that we can set the policy right?
Thanks in advance for all your help.

From India, Tirupur

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