Nagarkar Vinayak L
Hr And Employee Relations Consultant
Labour Laws & Ir
Rahul Chhabra
Hr Professional

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Dear All, Please guide me on earned leave encashment while an employee separates and FNF settlement is done. As per policy maximum accumulation is of 30 days. But at the time of leaving, if the employee has earned leave in his account say for example 25 from previous year and has earned 20 more in current year and is leaving in mid-year, in such case is he eligible to get leave encashment for 45 days or will it be 30 days.
Hi Suniti,
In this case, the total leave encashment will be done for 45 days. There is a capping on the total number of EL to be carry forwarded to next year and not on the number of ELs encashed.

Dear Rahul, Thanks. This is great help. Regards Suniti
Dear Madam,
It is not known whether you are covered under the Shops and Estt Act or Factories Act.
In either case , maximum accumulation of EL is provided for in the respective Acts. Refer to the same and unless your company policy for accumulation is better, you may do the encashment as provided by the law.
Vinayak Nagarkar
HR- Consultant

Where it is mentioned taht the EL encashment is mandatory in law??
Kindly check the act that applies to the nature of business of your organization. Regards Rahul
Nature of business is hospitality/Service sector and as per act and further company policy employee is allowed to accumulate maximum of 30 EL. But I need help on encashment part.
Dear Buena Vista HR,
Being in Hospitality and service sector, you will be covered under the Shop & Establishment Act. Section. I assume you are from Gurgaon, so Punjab & Haryana Shop & estab. act applies to your employer. Section 14 (b) of the same act mentions the provisions to encash un-utilized EL at the time of exit.

Dear Suniti,
According to the Punjab Shops & Commercial Establishments Act, 1958 you are to encash only 30 days of EL as upto this no. one can accumulate the EL. So in F&F you are to encash only 30 days EL.

My location is Rajasthan. And as I read Rajasthan Shops and commercial Establishment Act, 1958, I couldn't find much on encashment at the time of FNF. However, clause 14 (3) says if employee is dismissed or discharged during the course of year, he is entitled for leaves with wages earned till that time at the rate laid down in clause 14 (1) even if he has not worked for entire period after which he can start exhausting his leaves.
But what if employee leaves on his own. I am not able to get clarity on that.
Best Regards,

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