Is Combining All Leave Types into 32 Days a Good Move for Our Company? Seeking Your Thoughts

Hi All, I'm working as an HR in an IT company, and I've been given an assignment to find out the benefits of clubbing all the leave types and providing a total of 32 leaves to all employees. So, I would like everyone's suggestions: Is it good to club all the leaves? Is it beneficial for the company? How should one carry forward or do encashment if all leaves are clubbed together? Please revert with your views. I'm keenly looking forward to it.

Thanks,
Shagun

Dear Shagun, kindly ensure PL-12, CL-9, and SL-12 days in many concerns.

Concerns About Clubbing Leaves

1. It is not advisable to club leaves. If clubbing of leaves is implemented, you cannot distinguish between EL/PL, CL, and SL. Meanwhile, all employees in the company may try to maintain 100% attendance throughout the year, which may cause them stress and ultimately lead to a loss for the company.

2. It is a loss to the company. If you are paying 32 days as leave encashment to the employees, only 12 can be encashed.

3. Here comes one more issue regarding carrying forward or encashment. Kindly frame a leave policy for your company briefly to help you out.

Regards,

Also, there are leaves that need not necessarily be encashed, like Casual Leave (C.L.). It will lapse if not used. If you combine all these, you will end up paying more from the organization.

IT and ITES companies have been combining their leaves for the past few years. This approach works well in terms of needing less monitoring and categorization of each type of leave and maintaining a record for each.

Leave Policy Overview

We provide 25 days per year from January to December, of which only 20 can be carried forward. It works well for us. We do not encash unutilized leave, except at the time of retirement.

Industry Trends and Management Decision

You may need to explain industry trends to your management, providing examples of companies within various sectors, and leave it to top management to decide what they wish to do.

Also, how tedious is it currently to monitor the different types of leave availed? Use this answer to influence your management if needed.

Regards,
Richard

Dear Richard, I have a doubt regarding encashment. You mentioned that it is at the time of retirement only. Does this include resignation as well? Will their leaves be encashed, and what is the calculation to be done? For instance, if he/she has 100 leaves at the time of retirement/resignation, how many leaves will be encashed in the F&F?

Regards

I guess I could have been clearer. We permit those about to retire to accumulate their leave over the last 2-3 years. Thus, at the time of retirement, they may have over 60 days. Others cannot accumulate over 20 days each year. Thus, with the new year's quota, no one has over 45 days at the beginning of the year. Leave encashment is done on a pro-rata basis upon resignation or any form of separation.

I hope this makes it clearer.

Regards,
Richard

Impact of Clubbing Leaves

Leaves can't be clubbed with one another; they are given to employees to meet their personal requirements. If you combine all the leaves at once, you need to pay a lot to the employee, and this will cause work disturbance and inconvenience to the subordinates in the organization.

I have a few queries about clubbing all the leaves:

1. What is the maximum number of days of leave that an employee can be provided with? How is that calculated?

2. How many days of leave balance could be carried forward to the next year?

Could someone please help?

Thanks.