R R Kapoor
Emami Cement Ltd
If your Company is giving you leave strictly as per Factories Act i.e. 1 day leave for every 20 working days than you should get leave encashment by dividing 26 to your monthly salary. (Basic + D.A.). However, if you are getting leave more than 20 days then the divisor of 30 days is justified (300/20=15 + 5 WO=20 days)
There are Companies who gives encashment on entire salary, some companies by deducting few components and rest are giving on Basic & D.A. only.
There is no case law for computation of leave encashment.
As per industry practice for monthly paid employees the divisor is generally considered 30 days and for daily wages there is no confusion it is straight way multiply by no. of days x daily wage.
If your company is giving only the Minimum Wages to the employees converted into monthly salary, you have all rights to argue for divisor by 26.