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Section 79 (5) of The Factories Act, 1948 reads as follows:

If a worker does not in any one calendar year take the whole of the leave allowed to him under sub-section (1) or sub-section (2), as the case may be, any leave not taken by him shall be added to the leave to be allowed to him in the succeeding calendar year:

Provided that the total number of days of leave that may be carried forward to a succeeding year shall not exceed thirty in the case of an adult or forty in the case of a child:

Please clarify whether the management (registered under Factories Act) can restrict the Leave carried forward to 10 days.

If a minimum of 30 days carry forward is to be provided by the Company, are there any Case Laws?

Further, why should only Basic+DA be considered for Leave encashment (Gross Salary is considered for Loss of Pay)

From India, Bangalore
Dear Harish Ji,
My opinion to your queries is as follows :-
1. You cannot restrict the Leave carried forward to 10 days. However, you can start practice of encashment of leave over and above 10.
2. It is not the minimum, but maximum limit, the rationale being that the workers are encouraged to avail their leave rather carrying them forward.
3. Firstly, minimum wage mandated to be paid to the workers consist of basic and dearness allowance. Therefore, for leave encashment only these two components are relevant. Secondly, other allowances are payable on monthly basis, hence there is no requirement to pay them again for that particular month, when encashing leave.

From India, Faridabad
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