Paid leaves are provided annually. Shall they be accrued after date of joining or after completion of probation period? Also whether it is relevant to provide paid leave monthly if an employee is on leave or shall be encashed at the year end or when the employee resigns, whichever is earlier?
From India, Agra
Labour Law & Hr Consultant
Nagarkar Vinayak L
Hr And Employee Relations Consultant

Dear friend,

Leave of absence is an employment benefit given under every establishment -specific labor law or the contract of employment as the case may be depending on the cadre of employees. The purpose of such a statutory or contractual benefit is to enable the employee to be away from the monotony of work to get himself rejuvenated and refreshed so as to maintain his efficiency level and at times to enable him to discharge his personal and social obligations as any other member of the society. That's why leave has been classified into lapsable and cumulative leave. Every lapsable leave like Casual Leave, Sick leave etc gets lapsed within the calendar year and no question of encashment of such leave would arise at all. Cumulative leave like Earned Leave accrues year after year based on the incumbent's no of days actually worked and can be accumulated subject to the ceiling. Only this leave can be statutorily surrendered for cash benefit that too on the termination of employment alone as a part of terminal benefits.

Such being the legal position, lapsable leave cannot be permitted to be encashed. If so, the employee has to avail leave on LOP only when the necessity arises. Such a practice would certainly defeat the very purpose of the leave provisions. However, in order to encourage full attendance throughout the year, if you permit surrender of the unavailed portion of the lapsable leave for cash only at the end of the calendar year, perhaps it may not be legally objectionable.

If you follow the procedure of periodical surrender of cumulative leave for cash benefit, well, it can be done so with the express concern of the employees as there is no explicit statutory prohibition.

From India, Salem
Dear Colleague,
The Factories Act and respective State Shops Act provide for quantum , rate and eligibility for accrual of leaves. Usually it is no of days worked and available for use initeally upon confirmation or on 1 st of January every calendar year.
Encashment of unavailed Earned leave is provided after cessetion of the employment. But several companies have policy of encashment of EL while in service but other types of leaves like CL and SL are not encashable.
Vinayak Nagarkar
HR and Employee Relations Consultant

From India, Mumbai

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