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Dear Seniors, Can we put CL's & EL's in CTC.
Kindly suggest
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Dear Ganesh
EL is mandatory as Factories Act, CL flows from Standing Orders, paid leaves are employees right, you cant calculate cost of it.
Shailesh Parikh
99 98 97 10 65
Vadodara
My views : No case for inclusion of CL or EL in CTC does arise for the following reasons.
1.The concept of CTC is not there in Employment laws.It is only industry concept. It is not largely an industry practice to include CL or EL in CTC.
2. In case of CL, as per the leave policy of many companies, the leave will lapse to the company at the end of the calendar year, if unavailed by the employee in which case there will be no cost to company. Thus it renders it difficult to have definite CTC figure as it may vary through the year depending up on the extent of it being availed.
3.In case of EL, as the very name is indicative, the leave is earned by an employee for working for certain number of days. What is earned by the employee cannot qualify to be the cost to company. If he does not work for those days, he does not earn the leave.
4. Even if an employee is on EL for certain period, he is fictionally treated to be on duty as he is paid wages for the said period. Going by the definition of 'wage' under various labour laws more so under Factories Act or Shops Act, it is regarded as remuneration paid by the employer for the work done by an employee. If he does not work, he does not earn wages.So it is in the nature of a 'quid pro quo' from employer for the work done and thus does not qualify to be cost to company.
Other views welcome on this interesting issue.
B.Saikumar
HR & Labour Relations Adviser
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