Can Employees Encash Unused Leave if They Resign Before Completing a Year?

Hi friends,

Would you please reply to my question at the earliest possible? If an employee who is entitled to take 25 yearly paid leave resigns before completing the first year, will they be eligible to receive encashment for the balance of their annual leave based on the duration they worked for the company? Or will the benefits be canceled upon termination of the contract?

I am eagerly waiting to receive your responses as soon as possible.

Thank you and best regards,

Hi,

According to my information, if the candidate has completed his probation period and is leaving after fulfilling this period, he is eligible to encash the balance of his annual leave that he had accrued during his employment with the company.

Regards,

Whether on probation or not, the employee will receive encashment for the accrued PL for the days he has worked on a pro-rata basis.

Nikhil

Hi, I agree with Nikhil. Moreover, I would like to add that in our company, the rule is 1 PL accrues after every completed month of service. So, in case he has worked for 6 months, he has accrued 6 days off. If he has already taken leave, he can encash the balance amount. As rightly pointed out by Nikhil, it should be on a pro-rata basis.

Thanks and Regards,
Indrani Chakraborty

Just to add to Indrani, in the case of a termination, the complete full and final settlement should be done, including the encashment of leaves on a prorated basis.

Regards,

Neha Jain

Hi,

To answer your question, first check the Kuwait Labour Law. It might specify different scenarios for resignation and termination. In any case, Leave Encashment has to be paid as per accrued days as on his last date of notice. The rate at which the leave accrued might differ. For example, here in Dubai, if an employee has completed the probation period (6 months) but not completed one year, according to UAE Labour Law, the leave accrued is at the rate of 2 days per month. Once he completes one year, this increases to 2.5 days per month.

Therefore, I suggest you check the Kuwait Labour Law carefully.

Regards,
Vinod Somal

Hi,

If the employee has completed 4 months of continued employment, he/she will be entitled to encashment in the present situation (Ref: Section 22(1) of the Factories Act).

Thanks,
Sweety Singh

Dear Zahra,

How is it that he has 25 days of PL leave balance upon completing one year of experience? If this aligns with your company's policy, please check if there is any provision for encashment in the PERSONNEL POLICY. Otherwise, he is eligible for payment for 25 days after deducting any outstanding amounts.

Thank you,
P. Ramachandran

Dear P. RAMACHANDRAN,

As per our company policy and based on the amount of salary, the PL has been divided into 4 divisions: 14, 21, 25, 30 days. Therefore, if the mentioned employee completes one contract year, they are entitled to take 25 days.

Thank you for your response.

Best Regards,

Dear Zahra,

The responses have been received mostly from India who follow the Factory Act. However, as I pointed out earlier, Labour Laws in the Gulf are quite different from India. Hence, please check the Kuwait Labour Law and then your Company's HR Manual. Accordingly, you should act.

Thanks and best regards,

VINOD SOMAL