Umakanthan53
Labour Law & Hr Consultant
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Hello Everyone.
I have a query regarding leave encashment.
Mr X working for Company " Y" for the past 3 years.
He had an opening Earned leaves of 15 in the second year.
He used 5 EL during the second year
on Dec 31st he had a leave balance of 10 ELs.
3rd year he earned another 15 Els
Total EL available
2nd year = 10
+
3rd year = 15.
= 25 ELS.
During the 3rd year Mr X didnt not encash his leave,
During the 3rd year he used 10 leaves now making the balance = 15
balance ELS availabe
2nd year = 10
3rd year =5
total = 15
during the 4th year he earns another 15 ELS
The EL Balance statement looks like this
2nd year = 10
3rd year =5
4th year =15
total =30 balance
Mr X decides to encash the 2nd year( 10) and 3rd year(5) balance
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What is the rules to be followed here?

From India, Bengaluru
Hi,
Your query is based on assumptions, above example is not properly calculated.
Assuming that, Mr. X company allow them all leaves to be carried forward and Mr. X have total leave balance of 30, he can encash leaves up to 30 number of days from his leave balance (year doesn't matter) in a year.
Encashment will be subject to tax deduction and will be paid on Basic +DA.
Further Mr. X needs to check company policy, whether encashment is allowed or not.

From India, Pune
To my knowledge encashment of earned leave is admissible only in the event of termination of employment in all the establishment-specific labor laws like the Factories Act,1948, various States Shops and Establishments Acts etc. If the poster cites the provision of law that enables encashment of EL, it would be convenient to answer his query.
From India, Salem

Our company encash EL, CL at the end of the year i.e. Jan to Dec total EL 15 and CL 7. they paid 22 days payment in the january month.
Now they are planing to encash EL CL on monthly basis to all worker. is it possible
Please advise

From India, Bhogpur
Of course, if both the employer and the employees have consensus. But, in my considered opinion, such a practice of monthly encashment of unavailed leave defeats the very purpose of statutory leave provisions. Leave provisions are there for the twin purpose of enabling the employees to get occasional rejuvenation from the monotony of continuous and repetitive work and to get off to discharge their social obligations without loss of earnings and discontinuity of service. To some extent, yearly surrender is okay. But, if the leave is periodically bartered for money so that the employees' leave balance remains "nil" at the end of every month, what will they do in case of any emergency? Leave on loss of pay with or without break in continuity of service?
From India, Salem
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