Confused About EL/PL Leave Payment During Final Settlement? Need Legal Insights!

I am confused about the payment of EL/PL leaves at the time of full and final settlement. I want to know, should we calculate the EL of the employee earned to be paid in the next year in the full and final settlement?

Example Scenario

For example, in Oct 2012, an employee has 20 EL in his account (13 EL has been credited in Jan 2012 in lieu of work performed last year, i.e., 2011). Now in full and final settlement, should we pay for 13 EL only, or should we calculate the days worked during 2012 by him and then add the earned EL to 13 and pay him?

I hope you understood my problem. I would appreciate it if you could answer with some evidence and reference to the law/section.

Thank you.

Calculation of Earned Leaves (EL) for Full and Final Settlement

The Earned Leaves (EL) have to be calculated up to the day (month) of the employee's departure and encashed accordingly, mentioning it in the Full and Final (F & F) settlement. Suppose an employee leaves the job on June 1st; the leaves for 5 months need to be calculated and included in his F & F settlement. I hope I am on the right track.

Regards,
Rejeev Dixit

Mr. Rajeev's explanation is correct. The employee has to encash leave for the days he earns leave for the current year up to the day of his leaving service.

I have a question. Is the EL encashment calculated based on the gross salary or the basic + DA portion of the salary?