One of our employees has not completed his probation period & the company told him to leave the organization, now is he eligible for encasement of his balance leave PL in his f&f settlement? Please reply soon.
From India, Mumbai
Labour Law & Hr Consultant
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Leave encashment is as per leave enactment like factories act or shop and establishment act where your present employer categorised. But as per factories act, eligibility of earned leave is on completion of 240 days in a year. If you share more info, we can elucidate more on this leave encashment.
From India, New Delhi

Dear Suresh,
Leave encashment cannot be refused just because of probation. Since termination of service has done, thereby the employee is eligible for leave at pro rata basis for the period he has worked.

From India, Mumbai

"Leave encashment cannot be refused just because of probation. Since termination of service has done, thereby the employee is eligible for leave at pro rata basis for the period he has worked."
There is no rule/law wherein it is written where an employee is eligible for Privelege Leave on Pro rata basis to the best of my knowledge, would appreciate if you could share the citings if any

From India, Ahmadabad

Dear Saji, The law does not disallow to consider leave proportional to days of working. The case citation are case specific but one can use as per own suitability.
From India, Mumbai

Dear Mr. Mohanty
I agree but if the Act says that the eligibility to avail is 240 days and if the employee leaves the organisation within a month or two then it is not statute to give the PL on proportional basis is what I meant.
And if there is case study of the same I would appreciate your goodself to share so that it can be a learning for me too.

From India, Ahmadabad

This is case specific. The employee didn't leave voluntarily but asked to leave. He has been terminated. It's not clear from the post the termination was reasonable or unreasonable. Now a days unfair, discreminatary, forceful terminations are common just before completion of probation. In this case, not just PL, all other leave balance including c/off should be paid in full and final settlement.
From India, Mumbai

Dear friends,

In general, the period of probation, irrespective of its length does not deprive the statutory benefits of employment available to a confirmed employee. The point, therefore, is that the statutory employment benefits accrueable over the time frame prescribed are available to a probationer and right to encashment of E.L on his termination is not an exception.

The phase of probation under the realm of employment gives a free hand both to the employer and the probationer respectively to foreclose the contract of employment between them subject to the fulfillment of exit condition, if any already stated, without assigning any reason thereof. When the employer does so, it is called " discharge simpliciter " and I presume that has happened in the case cited.

In such a situation, the quantum of compensation depends on the length of service rendered by the employee as probationer as well as the terms of the exit clause of the contract of employment. The length of service carries within its fold all the statutory benefits of termination like gratuity, retrenchment compensation, encashment of E.L at credit etc.

So far as I know, the maximum period of probation of 2 years within a period of 3 years of continuous service is available only to employees in Central/State Government departments. In the industrial sector, it is only 3 months, if I were correct or the duration mentioned in the contract of employment depending on the cadre of employment.

Applying the above common principles to the case, certainly the presumption that the probationer would have completed one year of service or more in the organization on the date of exit at the instance of his employer is not at all possible.

Therefore, when the termination is a discharge simpliciter during the period of probation which is less than 240 days as per the terms of the contract of employment, the employee is not eligible to claim the benefit of encashment of E.L because of the statutory requirements pertaining to its accruel. Everything gets automatically merged with the notice pay itself if the termination happens during a short period of probation. Compensation due to foreclosure of a contract cannot be a bounty.

From India, Salem
Dear Friends

With due respect to all contributors, first of all let us be clear that ....
the requirement of 240 days working for eligibility of PL under the Factories Act is in a calendar Year i.e. from 1st January to 31st December. Working for 240days in this period i.e. previous year will entitle him to earn PL @ one day for every twenty days of work performed by him for subsequent year.

However, as per Section 79 (2) of the Factories Act, 1948 " A worker whose service commences otherwise than on the first day of January shall be entitled to leave with wages at the rate laid down in clause (i) or, as the case may be, clause (ii) of sub section (1) if he has worked for two-thirds of the total number of days in the remainder of the calendar year.

As per the above, even if the employee's services are terminated before completion of Probation period or completion of 240 days (i.e. during the period of his services), he is eligible for PL on pro-rata basis & the un-availed PL to be encased /paid along with his Full & Final settlement of his account with the company/factory.

From India, Ahmedabad

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