Company Stopped Leave Encashment: How Can I Claim My 100+ Days of Leave?

My company has stopped leave encashment. I have more than 100 days' leave balance. What shall I do? Is there any method to claim the amount?

Hi Rakesh,

First of all, how do you have a leave balance of 100 days? What is the leave carry forward policy in your company referring to?

Hello Rakesh,

If your company policies allow, you can accumulate more than 100 days of leave. However, as per the Factories Act, you can accumulate up to 30 days, and the organization cannot suddenly stop leave encashment. Prior notice must be given to the employees.

Remember to start applying for leave to reduce your leave balance.

Vijay Kumar
HR Trainee

Dear Rakesh, Please clarify which rules govern your leave entitlement. Are your leaves governed by the Factory Act and Rules, the Shops & Est Act, or any other statutory acts or management rules? If you are under statutory regulations, then the accumulation of leaves beyond 30 days is not allowed. However, if you have applied for leave and it was rejected, you are permitted to carry forward the applied leave to the next year.

Management Rules and Leave Accumulation

In the case of being governed by Management Rules, the discretion of the management may allow leave accumulation up to 60 days, or a maximum of 90 days. If your company discontinues the encashment policy, you should maintain the minimum permitted leave balance, which you can enjoy in addition to your accumulated leave. It is not permissible to insist on leave encashment from the management. If you fall under statutory rules, then you have the option to either take the leave or receive leave wages separately.

Regards, Adoni Suguresh Labour Laws Consultant

None of the companies or establishments shall mention in the appointment order regarding leave rules and encashment. The appointment order will, at most, mention the leave entitlement either as per the statutory rules applicable or as per the company's rules in force or governed by the company's certified standing orders. Unless we understand the reality of the query raised by Mr. Rakesh, we cannot provide our accurate opinion.

Regards,
Adoni Suguresh
Sr. Executive (Pers & Ind. Rels) Rtd
Labour Laws Consultant