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I am company HR of a private company in Thane, Maharashtra. One of our employee resigned and relieved few months back and now he wants to encash his paid leaves which he did not take. My company have a policy that we give paid leave to employee only when we get at least 4 - 5 days notice in advance, other wise it's treated as absent and salary is deducted from salary. However, some employee still take that leave and accept to deduct salary.
In case of above employee, he took many leaves without any approval, so most of time his salary was deducted. Now he wants to encash those remaining leaves. As per shop and establishment act, Maharastra, do we have to mandatorily encash leaves? If yes, this would become an easy tool for employees to misuse as they will take leave without any intimation/approval and will later encash those remaining leaves (possibly at higher rate, in case of salary increment later).
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Section 35(2) of the Bombay Shop & Establishment Act mandates that payment of leave salary is due and has to be made. The provision is as follows:
(2) If an employee entitled to leave under sub-section (1) or (1- A) is discharged by his employer before he has been allowed the leave, or if, having applied for and having been refused the leave, he quits his employment before he has been allowed the leave, the employer shall pay him the amount payable under section in respect of the leave.
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