Confused About Earned Leave Eligibility After 91 Days of Work? Let's Clarify Together

Clarification on Earned Leave Eligibility

Section 79(3) states that Earned Leave (EL) should be granted at the rate of 1 day for every 20 days worked. However, there is confusion regarding the 240 days condition in subsection 1 and the 2/3 days condition in subsection 2. It seems they could have simply stated that everyone can earn 1 EL for every 20 working days.

Please clarify whether an employee is eligible for 5 days of EL if they resign after working for 91 days.

Understanding Section 79 of the Factories Act, 1948

Section 79 of the Factories Act, 1948 is a comprehensive section dealing with the concept of Annual Leave With Wages for workers under the Act. It is important to understand that this section contains various provisions under its different subsections addressing different aspects and situations related to this specific type of leave.

Minimum Days Worked and Leave Calculation

Sec. 79(1) covers the minimum number of days worked in a calendar year required to earn the leave, the rate at which it is calculated based on the number of days worked, and the normal time when the leave can be taken by the employee.

Entitlement for Late Starters

Sec. 79(2) discusses the entitlement to leave in cases where a worker starts their service on a day other than the first day of January in the calendar year and outlines how it is calculated.

Wages in Place of Accrued Leave

Sec. 79(3) specifically addresses the calculation and payment of wages in place of the leave that is accrued by a worker in situations where their employment is terminated during any calendar year due to discharge, dismissal, resignation, superannuation, or death.

By reading subsections (1) and (2) of Sec. 79 together, it can be understood that an employee who resigns after just 91 days of service is not entitled to earn any leave and therefore does not need to be compensated for unused leave upon termination of employment.

If 91 days represent two-thirds of the days from his joining date to the end of the calendar year, he is eligible as per Section 79(2).

Umakanthan sir, thank you for your clarification, but I still don't understand why it's mentioned in section 79(3) "even if they had not worked for the entire period mentioned in subsections 1 and 2, EL shall be paid at the rate mentioned in the beginning of the section." Please clarify this point, for which I will be very grateful to you.

Thanks for your clarification, but I still don't understand why it's mentioned in section 79(3) "even if they had not worked for the entire period mentioned in subsections 1 and 2, EL shall be paid at the rate mentioned at the beginning of the section." Please clarify this point for me, for which I would be very grateful.

Dear Prakash, this is just to amplify the clarification given by Learned Mr. Umakanthan. Let me put it succinctly as below:

Eligibility Norms Under Section 79

Section 79(1) refers to the eligibility norms for those employees who are already in service from the beginning of the calendar year, while Section 79(2) refers to those employees who join in the middle of the calendar year and are continuing in service till the end of that calendar year.

Therefore, those regular workmen who leave the services on their own, like resignation, even after putting in attendance of 239 days in the calendar year in which they are leaving the services (i.e., resignation), are not entitled to annual leave with wages. An employee who resigns after 91 days of service in a calendar year is not entitled to earn leave, and hence the question of encashment does not arise.

Regards, Panchsen

P. Senthilkumar

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