Understanding Privileged Leave: Can Companies Refuse Carry Forward or Encashment?

Dear Fellow HR compatriots, I have a query: What are the statutes regarding Privileged Leave for a company in terms of carry forward or encashment? Can any company choose not to carry forward any PL to the next year under any Act? I look forward to some detailed insight on the subject.

Cheers,
Anubha Shankar

As per the Shops and Commercial Establishment Act, you have both options: either to carry forward the leaves to the next calendar year (maximum carry forward is limited to 30), or you shall encash the leave wages at the end of every year. For that, you should frame out the leave policy.

Regards

Jeeva, is it explicitly mentioned in the act? Because, as per my understanding, Acts only mention the duration of 12 months. Please specify.

Since you are in Delhi, you need to follow the Delhi Shops and Establishment Act. Check and see what it says. Is there a specific rule requiring carry forward? Our office makes it a rule that all leave needs to be taken during the same year. It's a part of our policy to have a work-life balance and ensure adequate rest, not allowing employees to sacrifice rest for earning slightly more money. Most of the Shop and Establishment Acts are silent about carry forward, so there is no compulsion for the employer to do so. However, if you deny an employee leave, then you must carry forward the leave.