Encashment of Earned Leave
If you are working in a factory and covered by the Factories Act, you can acquire earned leave of 18 days at the end of December, calculated at the rate of one day of leave for every twenty days of service. Such leave is allowed to accumulate up to 30 days. Thus, under the Factories Act, the maximum leave that can be encashed is 30 days, and that too only upon quitting or discharge from service.
If you are working in an establishment covered by the Shops Act, you need to refer to the Shops and Establishment Act of your state. For example, the Bombay Shops and Establishments Act of 1948 permits the accumulation of leave up to 42 days, which can be encashed at the time of quitting the service.
If your company has framed its leave policy, then leave encashment has to be calculated as per the said policy. If your company does not provide for leave encashment, then unavailed leave cannot be encashed.
Regards,
B. Saikumar
HR & Labour Law Consultant
Chipinbiz Consultancy Pvt. Ltd.
Mumbai.