I am working as a medical representative in Kerala, and my company's head office is located in Gujarat. I need clarification on leave encashment. I have completed 12 years of service with this organization. One of my colleagues left a few months back after completing 9 years of service. He had a PL balance of 220 days, but the company only provided encashment for 150 days. Is there a law specifying a maximum limit for leave encashment? And can I encash my PL during my service?
From India, Kottayam
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From India, Kottayam
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Good morning Mr. Mahesh, As per the law, every employee gets a maximum of 15 PL (based on physical working days, will be reduced) per annum.
Company Policy on PL Protection
The company will have a policy to protect the PL for 30/60/90 days, and so on. In such a case, you need to review any policy that exists in the company. They will encash only up to their eligibility, and the rest will lapse.
Hope your doubt is cleared. If not, please get in touch with me at [Phone Number Removed For Privacy-Reasons].
Regards,
Ganeswara Rao Perumalla
SDGM - HR & IR
From India, Hyderabad
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14Company Policy on PL Protection
The company will have a policy to protect the PL for 30/60/90 days, and so on. In such a case, you need to review any policy that exists in the company. They will encash only up to their eligibility, and the rest will lapse.
Hope your doubt is cleared. If not, please get in touch with me at [Phone Number Removed For Privacy-Reasons].
Regards,
Ganeswara Rao Perumalla
SDGM - HR & IR
From India, Hyderabad
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Let me correct Mr. Ganeswara Rao that there is a separate law relating to medical representatives, i.e., Sales Promotion Employees (Conditions of Service) Act 1976. Accordingly, a sales promotion employee is to be given one earned leave for every eleven days he worked in the preceding year. The leave so earned shall be accumulated up to 180 days (Rule 14 of Sales Promotion Employees (Conditions of Service) Rules 1976).
Section 4 of the Act, read with Rule 14, provides for encashment of unavailed leaves at the time of his leaving the company or at the time of retirement. It is called cash compensation, and the same shall not exceed 120 days. In the case of death, however, the representatives of the deceased employee shall be getting encashment of the entire leave to his credit. Also, where a sales promotion employee's services are terminated for any reason whatsoever (not being termination as punishment), he shall be entitled to cash compensation for the entire earned leave due to him and not availed of. This is a matter of law, and I interpret this rule as termination due to the closure of the company due to any reason beyond the control of the employer. Termination on account of an employee reaching the age of superannuation will not come under this provision.
A plain reading of Rules 14 and Section 4 makes it clear that the maximum leaves that an employee (of a pharma company or ten other industries to which the Sales Promotion Employees Act applies) can get encashed while leaving the service is 120 days. If the Management has given encashment of 150 leaves, it should be good. I am not sure whether the company has any policy which provides for the accumulation of other leaves, like medical leaves, quarantine leave, etc.
From India, Kannur
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Section 4 of the Act, read with Rule 14, provides for encashment of unavailed leaves at the time of his leaving the company or at the time of retirement. It is called cash compensation, and the same shall not exceed 120 days. In the case of death, however, the representatives of the deceased employee shall be getting encashment of the entire leave to his credit. Also, where a sales promotion employee's services are terminated for any reason whatsoever (not being termination as punishment), he shall be entitled to cash compensation for the entire earned leave due to him and not availed of. This is a matter of law, and I interpret this rule as termination due to the closure of the company due to any reason beyond the control of the employer. Termination on account of an employee reaching the age of superannuation will not come under this provision.
A plain reading of Rules 14 and Section 4 makes it clear that the maximum leaves that an employee (of a pharma company or ten other industries to which the Sales Promotion Employees Act applies) can get encashed while leaving the service is 120 days. If the Management has given encashment of 150 leaves, it should be good. I am not sure whether the company has any policy which provides for the accumulation of other leaves, like medical leaves, quarantine leave, etc.
From India, Kannur
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The-Sales-Promo tion-Employees- Act-1976.pdf