Leave Encashment Confusion: How Many Leaves Should Be Paid After Resignation?

Leave encashment? What does government law say about leave encashments? I have resigned after a 5.5-year tenure where I have hardly taken 10 leaves. However, my company states that only 12 leaves will be encashed. Please suggest.

So far as I understand, only the particular kind of leave that can be accumulated to a certain limit, if not availed of, namely earned leave/privilege leave/annual leave with wages alone can be encashed, and that too on the normal termination of employment of the employee.

An exact answer can be given to the last query only if the type of the establishment and the actual leave account of the individual at the time of his resignation are known.

Please check your state government Shops & Establishment rules if you fall under it. In some states, leave of about 8 per year is allowed to be encashed after a minimum of 5 ELs per year. You can accumulate a maximum of 60 leaves. Most organizations have 15 EL, 6 Sick, and 6 Casual leaves. Check your company policy on leaves; if it is better than the one under Shops and Establishment, there is no harm in following it; otherwise, government rules prevail. If you have completed 5 1/2 years in the company, your leaves ought to be roughly 15x5+15/12 x the number of months you had completed in the last year less the leaves availed. Also, note that you are eligible for Casual and/or Sick leaves too, though they are not to be carried forward; they lapse at the end of every calendar year.

Thanks and Regards

Government rules on leave encashment are not applicable to establishments in the private sector. They can, at best, be used as guidance on the subject. Most of the Shops and Establishment Acts throughout India are silent on this aspect. They talk about the carry forward of Annual/Privilege Leave if not availed during the year. You need to refer to your respective Shops and Establishment Act to get a clear idea about this issue.

However, feel free to call me at [Phone Number Removed For Privacy-Reasons] in case of any queries.

Regards, Ashok Sharma