I need some information about Earned Leaves encashment. One of my employees has resigned and is serving a notice period (resigned in the 11th month before completing 1 year). Is he eligible to encash his ELs in the FnF? If yes, please also share the labor law act number with a link so that we can provide it to the management.
Someone is saying that only after completing 12 months, an employee will be eligible to receive encashment of ELs.
From India, Noida
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Someone is saying that only after completing 12 months, an employee will be eligible to receive encashment of ELs.
From India, Noida
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First of all, tell us which kind of organization you represent?
If it is a factory-type organization, obviously, for the period of 11 months he has worked, he will earn leave at the rate of one day for every 20 days physically present in the preceding 11 months, and the amount equal to that should be paid to him along with his F&F. One more thing to be noted is that he will become eligible for earned leave only if he has worked for at least 220 days in the 11 months. For deciding this eligibility, take the holidays and weekly off days for which he was paid a salary. If he was given layoff during this period, that will also qualify for the eligible period. But the number of leaves he earns is strictly based on the days he was physically present for work.
Similar provisions are available in the Mines Act or the Plantation Labour Act.
In the case of commercial establishments like IT firms, media, etc., you have to refer to the state Act on Shops and Commercial Establishments. Mostly, it will be like earned leave is due after 12 months of service. Hence, if he has worked only for 11 months, he will not get it.
From India, Kannur
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4527If it is a factory-type organization, obviously, for the period of 11 months he has worked, he will earn leave at the rate of one day for every 20 days physically present in the preceding 11 months, and the amount equal to that should be paid to him along with his F&F. One more thing to be noted is that he will become eligible for earned leave only if he has worked for at least 220 days in the 11 months. For deciding this eligibility, take the holidays and weekly off days for which he was paid a salary. If he was given layoff during this period, that will also qualify for the eligible period. But the number of leaves he earns is strictly based on the days he was physically present for work.
Similar provisions are available in the Mines Act or the Plantation Labour Act.
In the case of commercial establishments like IT firms, media, etc., you have to refer to the state Act on Shops and Commercial Establishments. Mostly, it will be like earned leave is due after 12 months of service. Hence, if he has worked only for 11 months, he will not get it.
From India, Kannur
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As Madhu said, you need to look at the relevant labor laws. Factory rules in most states provide for leaves to be accrued only on January 1 of the next year. Therefore, the period of 11 months itself may not be of relevance.
Please share the full details, and the members will be able to give a better reply.
From India, Mumbai
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Please share the full details, and the members will be able to give a better reply.
From India, Mumbai
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It is true that, as per the Factories Act, earned leaves for the preceding 12 months are credited in January. However, for employees who have joined during the year, the same shall be credited in January on a pro-rata basis.
From India, Kannur
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From India, Kannur
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What I meant is that if the person completes 11 months (say) in November, then he has nothing to his credit and encashment is not mandated by law. But if the 11 months get over in September, then he would have had some leave in his credit from January, and that would be encashed as per the Factory Act.
The 11 months, by itself, are of less significance in such a case. I hope you agree.
From India, Mumbai
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The 11 months, by itself, are of less significance in such a case. I hope you agree.
From India, Mumbai
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PF Contribution on Leave Encashment - Clarification by EPFO.pdf
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EPFO Circular Leave Encashment.jpg