Leave Encashment Confusion: Are Casual and Sick Leaves Legally Required to Be Paid Out?

Dear All, I have doubts about leave encashment. In my company, we only have casual and sick leaves for a year, and as far as I know, casual leave will not be carried over to the following year, but sick leave will. My question is: are these two casual and sick leaves mandatory to encash? Is it legal?

If yours is a factory, then legally there is only one kind of leave, viz, annual leave with wages, often called Earned Leave. The number of leaves to which an employee is eligible depends on the number of days he has worked in the previous year. It is one for every 20 days worked in the previous year. Any unavailed leave shall be carried forward to the next year subject to 24 days. At the time of termination of employment, due to any reason, the unavailed leave shall be encashed.

Under the Act governing plantations and other commercial establishments, similar provisions are available. Since the law governing the latter is a state Act, there may be differences regarding the number of leaves. But I think that all states have leave rules which provide for 12 days of Earned Leave in addition to casual leaves and sick leaves. The Earned Leave, which is similar to the one mentioned in the Factories Act, can be carried forward and encashed at the time of leaving.

Please confirm under which Act your establishment comes and then follow the provisions relating to leaves under it.

Telangana Shops and Commercial Establishments Act
The Telangana Shops and Commercial Establishments Act permits the carry forward of earned leaves subject to a maximum of sixty days. Under this Act, the maximum number of leaves is 15 days, given to those who have worked for 240 days in the preceding year. Unlike the Factories Act, it is not proportional to the days worked but is a flat 15 days.

The Telangana Shops and Commercial Establishments Act permits the encashment of eight days' leaves every year.

In addition to the earned leave mentioned above, employees are eligible to take 12 days' leave on account of sickness and 12 days' leave for dealing with any reasonable and casual issues.