Can We Change or Stop E.L. Encashment Policy for Officers and Staff? Seeking Advice

Dear All,

Our existing policy is to encash E.L. for officers for 15 days and for staff for 10 days every December (with an entitlement of 30 days for officers and 15 days for staff).

My query pertains to the following points:

1. Can we change the existing policy and stop the E.L. encashment for those whose balance of E.L. is less than 30 days for officers and 20 days for staff?
2. Can we withdraw the facility of E.L. encashment?

Kindly provide suggestions on the above matter.

Regards,
Rakesh Dubey

Dear Rakesh,

You cannot withdraw the facility of E.L. encashment because it would be illegal and against the Factory Act/Shop and Establishment Act.

Secondly, you can change your policy regarding No E.L. encashment if the employee's balance of E.L. is less than 30 and 20, respectively. However, you must still provide encashment if an employee resigns or retires.

Regards,
Bandini.

Dear Rakesh ji,

There is 'NO' specific rule for encashment of ELs. It's purely the management policy. But according to the 'Factories Act' concern, all the ELs should be encashable at the tenure of the employment. For this reason, many organizations prepare their own Leave Policy. For Shops & Establishment, each state has mentioned specified quantum of leaves in the act itself. For further details in this citehr, so many friends have given their comments. Please go through it.

Regards, PBS KUMAR

It is illegal for an employee who worked 11 days continuously to be eligible to get 1 day earned leave. Regarding the encashment part, he has to compulsorily take 7 days of leave and encash 15 days of salary. The management only gives 15 days of salary to the employee for the need of manpower, to avoid friction and without harming existing facilities.

As per the Industrial Disputes Act of 1947, a notice under section 9-A must be issued to the workers.

Dear Friend Rakesh Dubey,

Would you kindly let us know first why you want to become so employee-unfriendly? Is it due to your own nature or thinking, or have you received some instructions from the management?

My dear, once you decide to be mean and exploitative, you can do absolutely anything with the miserable, hapless employees; as many "baniya" outfits (calling themselves a company by incorporating the business) have been doing. Why did you put this query in the first place? Is it to know about the penalties, or if others are doing it?

As an HR practitioner, you must surely be aware of the provisions related to EL. It is generally expected that an HR person would ensure fair and legally-compliant policies for the employees. However, "actions" are always a personal choice.

Warm regards.

Mr. Rakesh,

Please go through the Factories Act and act accordingly. You need not worry about anything. Simply advise your management to strictly follow the Factories Act.

K. Gopalakrishnan