Leave Encashment Eligibility: Is There a Minimum Tenure Requirement for FnF?

Hi CiteHR members, I need urgent help regarding leave encashment for an employee whose FnF is pending for a long time. Is there a minimum tenure (time period) required to be served in an organization as per statute to be eligible for Leave Encashment both:

1) While serving the organization, and,
2) At the time of separation during FnF calculation.

A prompt response will be highly appreciated.

As per my knowledge, employees are only eligible for leave encashment after their probation period. Employees who are still on probation are not eligible for the same. Additionally, the calculation depends on the company policy.

Dear All, kindly correct me if any improvements are required.

If anyone completes 240 days in the assessment year, he/she will be eligible for leave encashment or leave availing for the next year. For every 20 working days, one earned leave (EL) will be generated.

Regards,
Anurag

Your query is not in the proper format. Would you like to know about the leave encashment policy or the eligibility for leave? Please clarify.

Eligibility Criteria for Leave

If it pertains to eligibility criteria, consider the probationary period and the number of working days when calculating leave, subject to completing 240 days or two-thirds of working days. Also, note that leaves are calculated on a calendar year basis, not on a financial or assessment year.

The accrued leave can be made available to the employee in the succeeding year. The employee can either receive leave salary according to their salary structure or utilize the leave as needed, subject to availability in their credit, as per your company policy.

Regards,
Adoni Suguresh
Sr. Executive (Personnel, Administration & Industrial Relations) Retired
Labour Laws Consultant

Thank you so much for your valuable input. Further, I would like to know if an employee leaves the company during his probation period, would he be eligible for leave encashment?

Leave encashment is subject to the provisions of the state act, and the employee is eligible for encashment even if he/she is on a probationary period.

Guys, here I may be wrong, please shed some light on this.

Regards,
Janardan

Even a probationer is also entitled to leave with wages. Secondly, the majority of HR professionals are interpreting the entitlement based on 240 days incorrectly. The entitlement of 240 days is considered when an employee remains employed throughout the entire calendar year. Mr. Adoni has aptly explained the situation above. In other words, if an employee joins in March, works for, say, 100 days, and then leaves the organization, they are still eligible for leave with wages in accordance with the act.

Regards,
P.K. Sharma

I would also like to have the link to the Factory Act so that I can send it to my organization. I left my organization a few days ago, and as per the Company Policy for the India region, the Leave Encashment policy states that all leaves will lapse at the time of separation, and no leaves will be encashed. However, for all other regions (US, UK, etc.), they have leave encashment for all the leaves at the time of separation. They did not allow compensation against the Notice Period as well.

I have learned that the Factories Act states that leave should be encashed in full, but I do not have a copy of the act. I would be grateful if you could help.

Thanks,
Susheel Pant