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what are the rules for compensating an employee for balance leaves and short notice period given by employer while terminating:
1.Is the employer obliged to compensate employee for outstanding sick leaves?
2.On what basis is the employer supposed to compensate the employee for outstanding privilege leaves - basic salary or gross salary? The appointment letter states only 'pay in lieu of notice' and does not specify basic or gross. However, the HR claims that it is in the manual. My question is what is the position in law on this?
3. Is employer obliged to compensate the employee for facilities provided to him like car and insurance for the short notice period because employer gave a short notice?

From India, Mumbai
Please go through respective leave policy of your company.
1. As per law employer is not liable to pay any compensation against outstanding Sick Leaves.
2. Please go through leave policy of your company. As per Factories Act there is no specific provision that whether EL should be encashed on Basic & D.A basis or on gross.
3.Employer is not liable to pay Car or Insurance facilities till the completion of notice period, if company asks to leave the company in short of notice period. Employer should pay all the salary components (notice pay) as compensation for the short period of notice.

From India, Lucknow
Section 80(1) of the Factories Act clearly says what constitute' wages ' to be paid to an employee when he avails the leave or encash the same.It means gross earning .Not basic+DA only.The wording is ,total full time earning including DA but excluding OT and bonus.What ever is paid when an employee on annual leave should be paid when wages are paid in lieu of the quantum of leave.


From India, Thiruvananthapuram
If your firm is not a factory forget about Factories Act.Read the definition of wages and other provisions of the Shops & Commercial Establishment Act of your state and follow it .Generally there is no law stating that CL/SL should be encashed if not mentioned so in the contract of appointment.


From India, Thiruvananthapuram
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