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spriha badola

Hi All, We are planning to terminate an employee on the basis of a performance issue, I would like to understand is there any compliance related to payout of unused earned leave or it can vary from company to company. We have stated in the employee handbook that on performance issues no PL/EL will be enchased that will suffice.
From India, Jaipur
Labour Law & Hr Consultant
Partner - Risk Management
Sr. Hr Manager
+2 Others


PL/EL is the type of leave, which an employee accrue/earn while in service, which need to be allowed for encashment and pay out to be made/sent to the concerned employee, whether the reason for separation is either resignation or termination.
From India, Aizawl

Please provide the details of the type of organisation and the place where the employee was working. the regulations differ from state to state.

You need to check the Standing Orders as well as the applicable laws (Shop & Establishment / Factory Act) for the rule. In most cases, it is an unalienable right to encashed earned leave, so what your HR Handbook says is irrelevant.

From India, Mumbai
Suresh Rathi

Standing order has to be certified by lab dept and no clause as stated by you will stand test of law.Kindly recheck if your standing orders are are certified
EL/PL is to be paid irrespective of reasons for termination

Col.Suresh Rathi

From India, Delhi

Dear Spriha,

Whatever be an industrial establishment and the nomenclature of the leave of accruing nature linked with the attendance of an employee and bestowed with the privilege of accumulation to a certain extent, certainly there would be a statutory provision for its encashment as a terminal benefit notwithstanding the nature of termination of employment. Such an unqualified statutory benefit of employment cannot be taken away by any other means. Any such rule inconsistent with such a statutory provision is null and void. Would you deny salary or wages for the days worked upto the date of dismissal?

Therefore, the nature of termination of employment has no correlation to the payment of unavailed EL/PL at the leave credit of the ousted employee.

From India, Salem

Yes, I am very much agree with contributions made by learned members and to be specific by Sir Umakanthan M

Dear Member, Any decision, policy, act of an organisation if contrary to the prevailing statute will be null and void and the same can get challenge in the court of law. You as an organisation should refrain yourself from such practices which may harm to overall organisational image and reputation. Suggest to go through the Act carefully and act in line with that. Because of such practices many more organisations have faced honourable court's verdicts which proved against Factories/Establishments.

Thank You.

From India, Pune
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