Can We Encash Earned Leaves for Employees Leaving Before One Year?

Hi Everyone!

I need some help. If an employee who is confirmed but does not complete one full year of service, do we encash his/her earned leaves?

One employee joined on 30th March 2015. His last working day was 2nd March 2016. He has some earned leaves credited to him on 1st Jan 2016 and some earned for the 2 months he worked in 2016. Since the employee hasn't completed one year, do we encash the earned leaves?

Apologies for my ignorance here.

Thanks

Dear Pratik,

Yes, he will be eligible for proportionate leave. It is clearly stated in the Factory Act.

Best regards,
Parimal

If you are in HR, it is reasonably expected of you to know subjects related to HR. However, it is not wrong to not know everything. Therefore, do not be apologetic about ignorance but make efforts to learn by yourself, read relevant material, and seek guidance from seniors. It is not known whether your establishment is a commercial establishment or a factory, and whether you have a leave policy in place. If so, what does it stipulate about leave encashment? The Shops & Establishment Acts (which is a State Act and may vary from State to State) and the Factories Act usually provide for encashment of leave on discharge, resignation, or termination of an employee from service. Your policy should conform to the statutory provisions at least for the benefits. However, your leave policy can provide more beneficial terms than those under the relevant Act.

Regards, B. Saikumar