Dear Colleague,
The provision relating to Leave encashment is arising out of the Leave Rules framed by the organization in consultation with Trade Union if any and dully approved by the Director of Factories. In addition : Under Section 79 of the Factories Act 1948 there is a provision on Leave with Wages, there is mention that the wages to be paid to the worker in case if he / she quits his/her employment, before he/she has taken the leave, the occupier of the factory shall pay him/her the amount payable under section 80 in respect of the leave not taken, and such payment shall be made, where the employment of the worker is terminated by the occupier, before the expiry of the second working day after such termination,
Section 79 (11) If the employment of a worker who is entitled to leave under sub-section (1) or sub-section (2),as the case may be, is terminated by the occupier before he has taken the entire leave to which he is entitled, or if having applied for and having not been granted such leave, the worker quits his employment, before he has taken the leave, the occupier of the factory shall pay him the amount payable under section 80 in respect of the leave not taken, and such payment shall be made, where the employment of the worker is terminated by the occupier, before the expiry of the second working day after such termination, and where a worker who quits his employment, on or before the next pay day.
(12) The unavailed leave of a worker shall not be taken into consideration in computing the period of any notice required to be given before discharge or dismissal