Confused About Leave Encashment After Resignation? Need Clarity on IT Company Policies

Hi,

I have recently resigned from an IT service company based out of Hyderabad, India. During my FFS, leave encashment wasn't done and it was stated that it isn't in the company policy.

However, what I understand is that leave encashment is mandatory as part of the company's exit policy, and only payment on gross or basic is what the company can define.

Please help me in understanding it better.

Thanks in advance.

Thank you

Compliance with the AP Shops and Commercial Establishments Act

You cannot have an HR policy that is against the law. When your establishment is covered by the AP Shops and Commercial Establishments Act, you should follow all the provisions. You can offer better benefits, but you cannot deviate from the requirements set by the Act. If there are any provisions missing, you can refer to industrial practices for guidance. The AP Shops and Commercial Establishments Act mandates allowing 8 days of earned leave encashment for all existing employees. Although it does not specify the procedure for employees who leave the company, the common practice is to provide earned leave encashment, even though it is not required for casual leave and sick leave.

Advance Payment for Earned Leave

Specifically, an employee taking earned leave for more than 5 days should receive wages in advance for those days. This regulation applies in AP but may not be applicable in other states. Despite this legal requirement, the practice of paying in advance is not commonly followed. This situation highlights the dynamic between employers setting rules and employees complying with them. However, in cases like this, why not be more flexible and allow for leave encashment?