What Are The Rules For Leave Encashment -Please Advice If This Is Incorrect

Dear All,
I want your opinion on the following querry:
There is a Company in Pune, who pays supplementary allowance to all the Management staff as one of the component of salary. They deduct supplementary allowance on
1. Notice pay
2. Leave without pay
They pay supplementary allowance for
Previlege Leave, Casual Leave, Sick leave and for all the paid days.
The supplementary allowance is around 30% of the monthly salary.
Now, when the question comes of paying supplementary allowance for leave encashment at the end of the year or leave encashment after retirement or resignation, they do not include supplementary allowance.
My question to all of you is:
Is this right?
If yes, Why?
If NO. Then what the employees should do because it is quite a big amount as the leave encashment comes to more than 140 days.
Thanks.
Clement

Dear Pawan,
1."Leave encashment is calculated in Basic Salary" - Do you have any provisions (i need proof)? which act i can get???
2. Whether Leave encashment is calculated in 30 days or 26 days??? - I need the provisions???
...
Brother

Dear friends,
Never leave encashment norms are mentioned in the appointment letter. It is the policy matter. Most of the companies encash leave on gross salary. It is after the introduction of supplementary allowance in the year 2007 that the company is not including supplementary allowance for encashing of leave.
Regards.
Clement

what is the formula for calculating el is it basic/26*no leave or basic/30*no leave. kindly clerify

hi,
it is actually depend on company policy matter. It shall be decided on the basis of your policy. So It is the descretion of management to calculate the payment either ctc or basic pay as agreed by management comitte.