Navigating Leave Policies: Can We Offer Pro-Rata Annual Leave and Handle Leave Encashment?

We are registered under the Goa Shop & Establishment Act. My questions are as below:

Annual leave

1) I am aware that an employee who has served for a period of two hundred and forty days or more during a continuous period of twelve months shall be entitled, during the subsequent period of twelve months, to leave with wages for a period of fifteen days. But is it okay to grant the employee annual leave before the completion of 8 months? Can we do this on a pro-rata basis? The reason we want to do this is that our employer doesn't want to deduct salaries.

2) If an employee who joined in April 2018 has finished his entire annual leave of 15 days, is he eligible for new annual leave in April 2019?

Casual & Sick leave

3) Can we carry forward these 2 leaves to the new financial year?

AL encashment

4) Is it mandatory to pay the employee for the balance leave at the time of separation?

Please advise.

Thank you,

Hi,

Yes, Casual and Sick Leave cannot be carried forward to the next financial year. Regarding Q1 and Q4, I too had the same concerns, and if someone can help, it would be great.

Thanks,
Veejay

Dear Sandra,

1) Annual Leave - The law lays down the minimum guidelines; however, there is no harm if an employer wishes to extend the benefit beyond what is mentioned. It is absolutely okay to grant Annual Leave before the completion of 8 months, and it can be done on a pro-rata basis.

2) Eligibility for New Annual Leave - If an employee who joined in April 2018 has finished his entire Annual Leave of 15 days, is he eligible for new Annual Leave in April 2019? This totally depends on whether you account for leaves on a calendar year or a fiscal year basis. If you follow the fiscal year basis, the new Annual Leave eligibility will start from April 2019 onwards.

3) Casual & Sick Leave - Can we carry forward these 2 leaves to the new financial year? The law says no; however, as I said before, there is no harm in giving more benefits to employees than what is mentioned in the act. If you carry them forward, it will increase the employer's liability; however, if you still have to, I suggest you make a policy and convert unused leaves into Privileged Leaves and carry them forward.

4) Annual Leave Encashment - Is it mandatory to pay the employee for the balance leave at the time of separation? Yes, please read Section 21.5 of the said act.

Regards, Rahul