Hi,
I wanted some clarification regarding Leave Encashment. Earn Leave encashment is the perrogative of any Management. Leave rule says that the EL can be accumulated upto 30 days and the excess will get lapsed if not utilised. There is no rule as such that the excess leave has to be encashed by the Management. But in case of people who leave the company for any reason, the factories act is very clear that the leave at the employees credit is to be paid. For convenience sake most of the Managements break the salaries in to Basic, DA, HRA, Conveyance etc., Some Managements say that the legislation has not specifically defined the components of Leave encashment in case of employees leaving the services & hence they will pay taking into account only Basic and DA. They also say that the other components are not wages, we will account only basic and DA. What is your opinion on this? Is this the right practice? Is there a legislation supporting this or otherwise? Would be grateful if our learned members throw light on this issue.
-Srinaren
I wanted some clarification regarding Leave Encashment. Earn Leave encashment is the perrogative of any Management. Leave rule says that the EL can be accumulated upto 30 days and the excess will get lapsed if not utilised. There is no rule as such that the excess leave has to be encashed by the Management. But in case of people who leave the company for any reason, the factories act is very clear that the leave at the employees credit is to be paid. For convenience sake most of the Managements break the salaries in to Basic, DA, HRA, Conveyance etc., Some Managements say that the legislation has not specifically defined the components of Leave encashment in case of employees leaving the services & hence they will pay taking into account only Basic and DA. They also say that the other components are not wages, we will account only basic and DA. What is your opinion on this? Is this the right practice? Is there a legislation supporting this or otherwise? Would be grateful if our learned members throw light on this issue.
-Srinaren