Earned Leaves & Leave Encashment
Is it mandatory in a manufacturing organization (factory) to provide earned leaves and leave encashment? Can the employer deny granting earned leaves or deny leave encashment for earned leaves not availed by the employee?
Also, please inform if P.F. is deductible on leave encashment.
From India, Delhi
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1Is it mandatory in a manufacturing organization (factory) to provide earned leaves and leave encashment? Can the employer deny granting earned leaves or deny leave encashment for earned leaves not availed by the employee?
Also, please inform if P.F. is deductible on leave encashment.
From India, Delhi
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Annual Leave With Wages under the Factories Act, 1948
Please go through Section 79 of the Factories Act, 1948, and analyze all its provisions regarding Annual Leave With Wages, which is the statutory name for Earned Leave (E.L.). It is mandatory and not subject to the employer's discretion.
Statutory encashment of E.L. would arise only in the event of termination of employment. However, industries typically follow the practice of annual surrender of E.L. at credit for cash benefit. This surrendered leave salary will not attract EPF/ESI subscriptions.
From India, Salem
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Please go through Section 79 of the Factories Act, 1948, and analyze all its provisions regarding Annual Leave With Wages, which is the statutory name for Earned Leave (E.L.). It is mandatory and not subject to the employer's discretion.
Statutory encashment of E.L. would arise only in the event of termination of employment. However, industries typically follow the practice of annual surrender of E.L. at credit for cash benefit. This surrendered leave salary will not attract EPF/ESI subscriptions.
From India, Salem
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Leave Encashment Upon Termination
If carried over and encashed upon termination of service, resignation, or retirement, how many days of minimum encashment are compulsory? I did not find anything related to this in the section mentioned. I understand that 30 days of earned leave is the statutory limit to be encashed, and anything over and above this will lapse. Please clarify.
From India, Delhi
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If carried over and encashed upon termination of service, resignation, or retirement, how many days of minimum encashment are compulsory? I did not find anything related to this in the section mentioned. I understand that 30 days of earned leave is the statutory limit to be encashed, and anything over and above this will lapse. Please clarify.
From India, Delhi
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Please take note of the information shared in these links regarding 'EPF on leave encashment' and the Supreme Court judgment, along with the consequent circular issued by the EPFO on the subject.
- [PF Contribution on Leave Encashment - Urgent](https://www.citehr.com/10278-pf-contribution-leave-encashment-urgent.html#417281)
- [PF Contribution on Leave Encashment - Urgent](https://www.citehr.com/10278-pf-contribution-leave-encashment-urgent.html#418544)
From India, Bangalore
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- [PF Contribution on Leave Encashment - Urgent](https://www.citehr.com/10278-pf-contribution-leave-encashment-urgent.html#417281)
- [PF Contribution on Leave Encashment - Urgent](https://www.citehr.com/10278-pf-contribution-leave-encashment-urgent.html#418544)
From India, Bangalore
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At any point in time, the credit balance of the workman's Leave Account would reflect the maximum number of days of unavailed leave, subject to the ceiling only. The excess would automatically lapse for calculation purposes.
From India, Salem
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From India, Salem
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Accumulation and Encashment of EL/PL & SL
So far as the accumulation of EL/PL & SL in the leave accounts is concerned, it's generally followed in most industries that further credits above the maximum-ceiling limits (number of days) automatically elapse. Some industries, as part of agreements with unions, reach a clause where a given number of days, such as about 10 days of EL/PL, is allowed to be encashed every or alternate year uniformly for all willing employees. This arrangement not only helps employees with their financial requirements but also enables the employer to ensure improved available mandays for their production planning. The industry where I was working had this facility. Individuals use the accumulations to be encashed when the need arises, such as for school/college admissions, festivals, etc., if their leave rules permit this facility. This is possible in small industries/firms.
Handling Leave in Critical Positions
In many instances, due to official exigencies, individuals in critical positions may not find relaxed days so that they can avail leave amidst pressing commitments/targets that need to be met. In such exceptional cases, the competent authority, duly vested with administrative powers, relaxes the stipulations and allows a part of CL or EL to remain unutilized to be carried over or encashed, respectively. Some banks and establishments also link the encashment with availing LTA.
From India, Bangalore
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So far as the accumulation of EL/PL & SL in the leave accounts is concerned, it's generally followed in most industries that further credits above the maximum-ceiling limits (number of days) automatically elapse. Some industries, as part of agreements with unions, reach a clause where a given number of days, such as about 10 days of EL/PL, is allowed to be encashed every or alternate year uniformly for all willing employees. This arrangement not only helps employees with their financial requirements but also enables the employer to ensure improved available mandays for their production planning. The industry where I was working had this facility. Individuals use the accumulations to be encashed when the need arises, such as for school/college admissions, festivals, etc., if their leave rules permit this facility. This is possible in small industries/firms.
Handling Leave in Critical Positions
In many instances, due to official exigencies, individuals in critical positions may not find relaxed days so that they can avail leave amidst pressing commitments/targets that need to be met. In such exceptional cases, the competent authority, duly vested with administrative powers, relaxes the stipulations and allows a part of CL or EL to remain unutilized to be carried over or encashed, respectively. Some banks and establishments also link the encashment with availing LTA.
From India, Bangalore
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FACTORIES ACT-leave rules.doc
Factories Act-Sec.79-Leav e.pdf