Understanding Earned Leave: What Happens If You Don't Use All Your Days This Year?

Hi all,

I have been working with a proprietorship firm for one year. I have been granted 18 earned leaves, which are due in this financial year (April 2009-March 2010). Please let me know what the general rules are for availing these leaves and what happens if I do not avail all the leaves this year.

Thanks & Regards,
Abhishek

Hi Abhishek,

In my opinion, earned leaves can be accumulated and carried forward to the next year as well. Moreover, earned leaves can be encashed at the end of the financial year. You can avail as many earned leaves as there are in your leave account. Earned leaves are added on a pro rata basis, i.e., once you complete a month, you will get an earned leave in your account for that month.

I have earned 15 leaves, out of which I only took 5 leaves. Therefore, out of the remaining 10 leaves, I had 5 encashed and 5 carried forward in my account. Please refer to the laws regarding leaves for establishments in your city/state as they can vary.

Thanks,
Gunjan

For pension 1965,

Dear,

This type of leave accumulation may relate to government service. Please clarify which law allows such accumulation.

Regards,

R.N. Khola
(Labour Law & Legal Consultants)
09810405361

Hi.... Accumulation of EL is up to 30 days only, not 300. You can encash it after the completion of that period. In the preceding year, if the employee had worked for 240 days, then you are eligible for EL leaves. For every 20 working days, you earn 1 EL for the preceding year.

For example, if an employee joined in the year 07-08 and had worked 2/3 of that year, he/she will be eligible for EL for the next year, i.e., 08-09, with a total of 15 EL. If in this period he had only taken (utilized) 3 EL, then 12 EL + the total EL earned for the period 08-09 will be for the next period 09-10. The maximum accumulation is 30, which can further be encashed.

Please advise me if there is a mistake.

Ramnath

Please refer to the Factories Act, 1948 under the Leave with Wages chapter, to be precise under Section 79 of the said Act.

Thank you,
Mahesh Pandey

Dear Mr. Khola,

PSUs and listed companies allow for the accumulation of 300 days. I am not aware of the rules under the Factories Act. During my time at L&T, I was allowed to accumulate up to 330 days.

Hi,

If you completed a minimum of 240 working days during a calendar year, then the number of earned leave (EL) equals the number of working days divided by 15. In case of not availing EL, it can be carried forward to the next calendar year, up to a maximum of 30 days.

Regards,
Bijaya

Dear Bijaya,

Under which Act should this be divided by 15 for calculating EL?

Regards,

R.N.Khola
(Labour Law & Legal Consultants)
09810405361

Hi,

Different states have different provisions for leaves. It's better if you go through the act/provision under which your organization falls. For example, my organization falls under the Delhi Establishments Act. Please refer to the relevant laws before establishing any rules.

You can also obtain information about the enactments from your accounts/PF officer, as they usually have such information.

Thanks,
Gunjan

Hi,

Our company is registered under the Shop and Establishment Act in Haryana. What is the maximum number of earned leaves that can be accumulated by an employee? When do the accumulated ones start lapsing? Until when can earned leaves be carried forward?

Thank you

Dear,

According to Section 14(d) of the Punjab Shops & Commercial Establishment Act, 1958, as applicable to the State of Haryana, unless there is any specific agreement between the employer and the employee, the total number of days of leave that may be carried forward to a succeeding year shall not exceed forty in the case of a young person and thirty in any other case.

With Regards,
R.N.Khola

Thank you, Mr. Khola,

My company is planning to change its leave policy. We are a member of the Shop Establishment Act in Gurgaon, but previously, we had 30 EL per year and 5 sick leaves, nothing else. Now, if we can change the EL from 30 to 12, all the employees will be affected. Can you advise on how to proceed in this situation?

Thanks,
Shweta

Dear Shweta,

Up till now, you must have gone through the Punjab Shops & Commercial Establishment Act, 1958, wherein according to section 14, we are bound to give 18 EL on completion of one year (April to March), 7 sick leaves, and 7 casual leaves during the current year. This amounts to 32, and your establishment is giving a total of 35, but not in accordance with the requirements of the law. Your statement indicates that you are not providing a total of 7 sick leaves, thus giving two sick leaves less than required by law. Simultaneously, you are also not granting 7 casual leaves. In this manner, your unit is not complying with the provisions of section 14(4) of the Shop Act. In this situation, nobody would prefer to have 12 EL instead of 30. It is clarified that each and every employee/workman is covered under this Act, excluding the employer and the manager as declared under this Act by the employer, hence all employees and workers are entitled to these leaves. Since you are providing 30 EL, this benefit becomes a condition of employment for these employees. You must be employing two types of employees: one covered under the Industrial Disputes Act, 1947, and others not covered under this Act but governed by the service rules of the establishment or receiving leave benefits as per the appointment letter. In this scenario, it is recommended to convene a meeting with employee representatives and attempt to reach an amicable settlement if possible; otherwise, you must provide a 21-day notice under section 9A of the ID Act, 1947, before implementing such changes. For other employees, issue orders accordingly, but ensure compliance with the minimum number of leaves required by this Act and prepare to contest the case in civil court. Initially, try to resolve the issues amicably; if unsuccessful, proceed as mentioned above. Request the management to provide the minimum leaves prescribed by law.

Opinion/comments submitted as requested.

With Regards,

R.N. Khola

Mr. Khola,

All the employees in our organization are above 18. This implies they can accumulate a maximum of 30 leaves; after that, it will start lapsing. Additionally, what about the encashment of leaves? How can we go about it according to the law?

Thanks,
Shweta