Employee Leaving Mid-Year: Should Leave Balance Be Paid Fully or Pro-Rata?

If an old employee has an opening balance of 15 PL on 1 Jan 2023 and he leaves on 15 May 2023, is the company liable to pay the entire balance of 15 leaves or leaves on a pro-rata basis in the full and final settlement?

If his opening balance of PL was 15, and he has not availed any PL during the January-May period, certainly, he should be paid 15 days' salary as leave encashment. In addition to this, he is also entitled to leave and encashment proportionately for the period January to May, subject to service conditions. Normally, if we apply the principles of the Factories Act, he would be eligible for leave for the current year if he has worked for 100 days in a five-month period, and his leave for the current period shall be based on his physical days present at the rate of one day for every 20 days.

It appears to me from the original post that there is no accumulation of leave for 2022. Probably, as of 01.01.2023, as per the policy of the organization, 15 days of leave have been shown as the opening balance for the year 2023. If the employee has taken any leave during 01.01.2023 to 15.05.2023, then after adjusting that leave from the actual eligibility up to 15.05.2023 (pro-rata basis) - if any leave is in the credit of the employee, it should be paid along with the F & F Settlement.

S K Bandyopadhyay (WB, Howrah) CEO-USD HR Solutions