foodexo-chennai1
Hi, Please clarify for me.. one employee resigned within three months of working, is an employee eligible for EL Encashment? if yes minimum how many days encashment is eligible? IF no Vise versa please answer with act details.
From India, Chennai
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Rkn61
Hr Manager
KK!HR
Management Consultancy

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KK!HR
1345

The statutory basis of EL is the Annual Leave provided in the Factories Act 1948. Section 79 thereof reads as follows:
Section 79 in The Factories Act, 1948
79. Annual leave with wages.—
(1) Every worker who has worked for a period of 240 days or more in a factory during a calendar year shall be allowed during the subsequent calendar year, leave with wages for a number of days calculated at the rate of—
(i) if an adult, one day for every twenty days of work performed by him during the previous calendar year;
So, first of all, the workman has to work for at least 240 days in the first year of service, and thereafter the leave will accrue @ one day for every twenty days worked. Since the resigned employee has only worked for three months thus far, no leave is earned and nothing is payable.
As an organisation, you need to have clearly laid down policies in this regard. If you are covered under the Industrial Employment Standing Orders Act, 1946, pl check up on its applicable provisions too.

From India, Mumbai
rkn61
563

While I fully endorse the view expressed by our senior learned member Mr.KK-HR, I now understand that the new Labour Codes have reduced the eligibility requirement for leaves from 240 days of work to 180 days of work in a year. However, the quantum of leave earned will remain unchanged, that is, 1 day of leave earned for every 20 days of work. Similarly, no change has been proposed in the limit on carry forward of leaves which remain at 30 days
From India, Aizawl

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