Our company (falls under Factories Act) is redrafting its Earned Leave policy. The company has decided to keep the annual entitlement to 20 days and the maximum carry forward allowed is 30 days. Assuming an employee does not avail any leave balance, the accumulation pattern would work out as follows,
1/1/2018 : date of joining
1/1/2019 : 20 days credit (for the previous year worked)
1/1/20 : 20 days credit (for the previous year worked, total balance now 40 days)
31/12/20 : 40 days accumulated balance.
1/1/21 : 30 days revised balance (excess 10 days get lapsed or encashed)
My question is, is there any law/section/sub-section which mandates the company to compulsorily encash the excess 10 days (on 1/1/21) ? Alternatively, from a compliance perspective, would it cause any issues if the excess 10 days were to be lapsed?
There is no specific provision of law which lays that the leave in excess of the ceiling limit would lapse on the new entitlement. But it is implied when it is said that the maximum accrual limit of annual leave is fixed. The above illustration is correct.
From India, Mumbai
Dear KKHR - Thank you for the revert. Appreciate it.
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