In India, for NGOs and NPOs registered as societies and trusts, the regulations regarding leave encashment are primarily governed by the Shops and Establishments Act of the respective state. It is crucial to refer to the specific state's Shops and Establishments Act where the organization is located to determine the provisions related to leave encashment.
Regarding the mandatory nature of leave encashment as part of full and final payment, it typically depends on the employment contract or company policy. If the organization's internal policies or the employment contract do not explicitly mention leave encashment as part of the full and final settlement, it may not be mandatory to provide leave encashment in such cases.
However, it is essential to ensure compliance with other labor laws such as the Employees' Provident Fund (EPF) Act, Payment of Gratuity Act, and leave policies mandated by the respective state laws. While leave encashment may not be explicitly mandated by law in every circumstance, it is advisable to align the organization's practices with industry standards and ensure fair treatment of employees upon separation.
If there are specific concerns or discrepancies regarding leave encashment in the context of full and final payments, it is recommended to seek legal advice or consult with a local labor law expert to address the situation effectively.