Leave Entitlement Discrepancy: Is HR Justified in Denying 17 Days for Probation Period?

Joined on November 2, 2009, on a one-year probation and served the organization until December 31, 2024 (Retired).

Leave Entitlement Discrepancy

HR just had 267 days of EL for a 14.2-year service period instead of 284 days. Every year, management credits all employees with 20 days of EL regardless of the number of days they worked in the previous calendar year. HR declined to count the probationary period and said it was not covered for EL entitlement. They settled only 267 days instead of 284 days. Is HR right to decline the 17-day EL balance payment? Your comments and opinions are solicited here.

It is good that your company allowed you to accumulate 267 days. If you were not given EL in the first year of service, you should have questioned it right then. As per law, every employee who has worked for 240 days in the 12 months shall be given EL at the rate of one day for every 20 days worked. This shall include the service probation period as well. However, the company need not allow an employee to carry forward leaves in such a way that the total leaves shall exceed 30 days at any point in time. Your company has allowed you to carry forward the leaves without any limits. You should be thankful to the HR, I would say.

Actually, it is cumulative of EL for 14.2 years. Till Nov. 2023, I only had 40 days of EL remaining, which I encashed periodically. Only 69 days are allowed to hold in the EL balance. I retired on 31.12.24, so my earnings of EL for the calendar year 2024 were denied, stating EL is credited only from the date of confirmation and not eligible for the probationary period. However, I told him the probation period covers EL entitlement. It is a management decision to credit 20 days of EL regardless of 240 days. Almost every year, I worked for 290+ days.

To be frank, HR hid the rules from management or was not interested in calculating mandays. Since it is the practice, HR should abide by and give me 20 days of EL for 2024. I also explained to them that the probationary period is entitled to EL, as I worked at a middle management level.

Please guide me on how to proceed further.

Leave Entitlement During Probation

The defense that during the probation period an employee does not earn any Earned Leave (EL) is incorrect. If you joined the company in November 2009, for the calendar year 2009, you should receive 2 or 3 leaves if you worked for 40 days, based on the calculation of one leave for every 20 days worked. Then, for the year 2010, you will earn a set of leaves, which will be credited in January 2011. Accordingly, you need to calculate your leave entitlement until your retirement, let's say 31st October (or 31st December 2024?).

Leave Encashment and Company Policy

There is no provision under the Factories Act to grant encashment every year. You are expected to avail of it, or otherwise, it would lapse. If the management allowed holding up to 69 days of leave, that is an employee benefit arrangement. If 20 days of leave per year is a service condition, then you should also accept the other conditions, i.e., the condition that the EL will accrue only after confirmation. If you did not question why the EL for the probation period is not credited, then how can you raise it now? You can have either parity as per law or benefits as per the company policy. You cannot have both at the same time.

Gratuity Calculation

However, if the gratuity is computed without considering the probation period, you can raise it now.

Sir, I had 40 days of Earned Leave (EL) outstanding in my credit from January 2023. They didn't include the EL for 20 days, which I earned between January 2024 and December 2023. They settled the payment only for 49 days instead of 69 days. Gratuity was calculated from November 2009 to December 2023 for 14.2 years. I am claiming the 20 days of EL now, which they didn't pay. Please guide me on how to proceed further.

There are no such conditions or policies mentioned in the appointment order or in the service book that EL would be given from the date of confirmation. Gratuity was given to me, including the probationary period.

Dear KC Seshadri,

As per your posting, the joining date was November 2, 2009. You have not mentioned how many days you worked in the calendar year of 2009. According to the rules, you could have been eligible to get a maximum of 2-3 days of EL for the calendar year 2009, provided you worked two-thirds of the available mandays. Your claim of 17 days is not sustainable and seems to be a miscalculation without a base. This suggestion is based on general rules mostly followed across the country in the absence of your company's leave rules and standing orders.

I am confused. You joined in November 2009. We are in 2024, which is 15 years. You encashed your pending EL each year.

So why are they asking to deduct the excess payment from 2009 (2010) in 2024? Or are we misunderstanding something?

You worked with them for 15 years, and they paid you for 267 days of leave. Are you really going to make an issue for 17 days?