Is Your Employer Obligated to Pay Earned Leave if You Resign Before 240 Days?

Dear Seniors, I have a query regarding Annual Leave with Wages:

Annual Leave with Wages Query

I know that to avail Earned Leave (EL), one has to work for 240 days. If an employee quits their job, the employer is required to make the payment for the EL along with their full and final settlement.

However, on the other hand, if someone resigns before completing 240 days of work, is the employer still liable to pay the EL payment along with the full and final settlement?

Please advise.

Regards, Tarang Chauhan HR Executive.

According to the Factories Act of 1948, the standard practice in all companies in India follows the Annual Leave Wages provision. If a worker is discharged, dismissed, quits employment, superannuates, or passes away while in service within a calendar year, they, or their heir or nominee, are entitled to wages in lieu of the leave they were due before the aforementioned events. This entitlement is to be calculated at the rates specified in sub-section (1), irrespective of whether the worker completed the minimum work period required for leave eligibility under sub-section (1) or (2). The payment must be made within two specific time frames:

(i) In cases of discharge, dismissal, or resignation, payment must be made before the end of the second working day following the event.
(ii) In cases of superannuation or death while in service, payment must be made within two months from the date of such events.

This provision clearly indicates that workers are entitled to receive wages in addition to their Earned Leave (EL) entitlement as part of their full and final settlement.

I hope this explanation clarifies your entitlement to wages, including Earned Leave, and the subsequent full and final settlement process.