Is It Fair to Lose Unused Leave? Seeking Advice on Leave Encashment Policies

Hi All,

I work with a small software company having around 30+ employees. The company has a leave policy which states that only a maximum of 5 leaves will be encashed, and any other unavailed leave will lapse. I feel that it is unfair to employees as, being a small team, they end up working longer hours, and most of the time, their leave applications are not approved. Hence, if they wish to take leave, they cannot, and at the end of the year, they do not have the option of carrying forward the leave. Is there any Act that states that leave should be carried forward or encashed in full? I would appreciate any help in this area.

Thanks,
Richa

Dear Sender,

There is no provision for encashing leave. The applicability of leave and leave rules will vary from organization to organization.

To calculate unavailed leave, the basic and DA will be multiplied by the number of leave days available in an employee's credit.

Regards,
L. Kumar

Hi Richa,

In practice, most companies follow an almost similar structure of a leave policy. If one doesn't avail his or her paid leaves in a particular calendar year, then the remaining leaves will be carried forward to the next calendar year. Some companies encash those remaining leaves at the end of the calendar year, while some do so at the time of separation only. The number of paid leaves that shall be carried forward differs from company to company.

I hope this information has resolved your query.

Regards,
Amit Seth

Hi Amit,

Thank you for your reply. Is there any act regarding leaves which states how many leaves should be given, how many can be carried forward as a benchmark based on which companies can make their policies?

Thanks,
Richa

Dear Richa,

Leave can be accumulated for a maximum of 300 days, and encashment of leave is subject to IT. It is a policy matter of the organization, and no act is available for leave availing.

With regards, L. Kumar

Dear Sender,

There is no policy for cashing in leaves. The company has full authority to implement any procedures or actions without employees' consent.

Athar Hashmi