Leave encashment calculation at the time of notice period not served. - CiteHR
Umakanthan53
Labour Law & Hr Consultant

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Dear All,
Small request..my employee is having 40 ELs . he was resigned and left without serving one month notice period. when i start to prepare F&F my boss told me that not to deduct notice period amount as he was having 40 ELs. he was telling adjust 30 days as notice period and calculate 10 days leave encashment . please any one can give advise how can i proceed to calculate F & F.
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Dear Manyamramesh,
Normally a F&F Settlement in the wake of resignation by the employee would include the following heads of payments:
(1) Gratuity under the PG Act,1972, if the Act is applicable to the establishment and the employee is eligible
(2) Cash value of the no of days of E.L at the credit of the leave a/c of the employee.
(3) If the resignation takes place in the middle of the Accounting year and the Payment of Bonus Act, 1965 is applicable to the establishment and the employee covered by the Act, proportionate bonus for the service rendered. However, it can be mentioned in the F&F document that bonus would be paid after the close of the AY.
The direction given by your boss to adjust 30 days of E.L against unserved notice period and to pay the surrender value for the remainder is quite correct. Better mention the same in the F&F.
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