Confused About Leave Encashment During Extended Probation? Let's Discuss Your Options

Hi,

I need your help to sort out the confusion related to Leave Encashment. Guide me to know the provision for Leave Encashment for an employee if he resigns during his extended probation period.

In my opinion, "During probation, the employee cannot avail of Paid Leave; however, his leave will accumulate (as per company policy or as per the Act, whichever is applicable) and will be encashed during the Full and Final settlement if he resigns during probation or extended probation."

Kindly suggest.

Types of Leave

Leave, as a statutory employment benefit, is of two kinds. One is lapsable leave, and the other is accumulated leave. Lapsable leave, if not availed within the calendar year, gets lapsed at the end of the year. The best example of this is Casual Leave. On the contrary, accumulated leave is the leave that can be carried forward to the following year and accumulated subject to the ceiling if not availed. The best example of accumulated leave is Earned Leave. Only the accumulated leave at the credit of the employee is qualified for encashment at the time of termination of his employment.

Accrual of Earned Leave

The nature of the accrual of Earned Leave is such that it is based on the number of days actually worked by the employee in a particular year to be availed of or accumulated only in the succeeding year. Concerning a probationer, the accumulation of Earned Leave depends on the total period spent on probation, including any extensions. Therefore, if an employee has completed one year of service, even as a probationer, and resigns as such, he is legally entitled to leave encashment as a terminal benefit.

Eligibility for Annual Leave Encashment During Probation

Please advise if an employee resigns during the probation period of 6 months, is he eligible for annual leave encashment as per the law.