Is It Fair to Limit Leave Encashment to Confirmed Staff Only? Seeking Your Advice

Sir, I am working as Asst. Manager - HR in a Private Limited Company. Please inform whether all Payroll Staff (Probation & Confirmed Staff) are eligible for Leave Encashment. Currently, the Company is providing Leave Encashment to all Payroll Staff. However, the Management is considering restructuring this benefit. Would it be feasible to offer Leave Encashment to Confirmed Staff Only? I would appreciate your valuable suggestions.

Thank you,

Asst. Manager - HR

Leave rules shall be framed subject to provisions in this regard in the Factories Act/ Shops and Establishments Act/ Plantations Labour Act as the case may be applicable to your establishment. You can have better rules than as provided in these Acts.

While framing a new leave policy, you cannot exempt any employee from it. Moreover, an employee or a category of employees who have been in receipt of a facility or benefit cannot be denied such a facility due to a policy change.

Regards,

Madhu.T.K

Leave encashment mostly depends upon the organization. As far as I knew, leave encashment can be provided to the confirmed staff only. As you said that the organization wants to modify, there might arise some problems in the beginning, but leave encashment can be provided to the confirmed staff. To avoid all the issues, you can also introduce some gifts to the probation staff.

Hope this is found useful to you. Any clarification can get back to me.

With regards,
Madhavi Reddy
HR Executive

Hi,

As per the leave rules under the Industrial Disputes Act and the Factory Act, individuals who are on probation or in regular service are entitled to 1 day of leave for every 20 working days (services rendered for 20 days). In government services, employees can accumulate up to 240 days of leave and encash it in a single slot upon retirement. In the private sector, employees can accumulate leave up to 180 days and encash it at once upon retirement. Every worker in the industry has the legal right to earn 1 day of leave for every 20 working days and can encash the accumulated leave at the end of each year.

Mohan Rao HR MANAGER