Our company has changed its policy regarding leave encashment and has decided not to provide leave encashment. We receive 30 leaves, out of which 15 must be compulsorily utilized, and the remaining 15 can be carried forward to the next year, with a maximum cap of 120 leaves.
Are there any specific rules concerning leave? Please advise.
Thank you.
Kind regards
From India, Rajkot
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1Are there any specific rules concerning leave? Please advise.
Thank you.
Kind regards
From India, Rajkot
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As per my knowledge, leave salary is a benefit that the company provides to employees. If the company does not encash leave, the benefit goes to the employees, considering whether it is encashed based on the basic salary or the gross salary.
For example, if your current basic salary is 100 Rs. and your leave balance is 15, if you encash it, you will receive 1500 Rs. Now, after one year with an increment, your leave balance will be encashed again. If your basic salary is now 110 Rs., you will receive 110 * 15 = 1650 Rs.
Now, imagine you have worked for two years, and your company is carrying forward your leave balance. In this scenario, if your total leave balance is 30, the encashment will be 110 * 30 = 3300 Rs, instead of 1500 + 1650 = 3150 Rs.
I hope this explanation helps you understand better.
From India, Ahmadabad
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For example, if your current basic salary is 100 Rs. and your leave balance is 15, if you encash it, you will receive 1500 Rs. Now, after one year with an increment, your leave balance will be encashed again. If your basic salary is now 110 Rs., you will receive 110 * 15 = 1650 Rs.
Now, imagine you have worked for two years, and your company is carrying forward your leave balance. In this scenario, if your total leave balance is 30, the encashment will be 110 * 30 = 3300 Rs, instead of 1500 + 1650 = 3150 Rs.
I hope this explanation helps you understand better.
From India, Ahmadabad
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Dear Manish,
Leave Encashment and Policy Clarification
The leave rule exists for the minimum in a year but does not state anything about encashment. Considering 15 days encashment after 8 years, the balance would be 120. What happens then in the 9th year? Would the 15 days need to be encashed or would they lapse? I believe they will be encashed. You could check this.
Leave Adjustment During Resignation
What happens if an employee resigns? Can leaves be used to adjust the notice period again, or should the full notice be served to get the 120 encashed? I am certain that the leave policy would have been well defined to factor in these areas.
Please review and clarify these points. Thank you.
Regards,
From India, Mumbai
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Leave Encashment and Policy Clarification
The leave rule exists for the minimum in a year but does not state anything about encashment. Considering 15 days encashment after 8 years, the balance would be 120. What happens then in the 9th year? Would the 15 days need to be encashed or would they lapse? I believe they will be encashed. You could check this.
Leave Adjustment During Resignation
What happens if an employee resigns? Can leaves be used to adjust the notice period again, or should the full notice be served to get the 120 encashed? I am certain that the leave policy would have been well defined to factor in these areas.
Please review and clarify these points. Thank you.
Regards,
From India, Mumbai
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Many companies follow their policy of not carrying forward their liabilities arising from Leave Encashment. If it is the management's decision to compulsorily allow employees to take leave, then everyone must comply. However, the question of encashing the Paid Leave (PL) after someone quits, the total number of days accrued towards the PL balance, and the eligibility for that particular year until the individual quits, is addressed in the Full & Final Settlement.
Hope this clarifies the situation.
Regards
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Hope this clarifies the situation.
Regards
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All companies have their leave policies based on the labor laws applicable to them. The different Acts contain provisions for leave entitlement. As far as encashment of leave is concerned, no specific provisions have been enumerated for the quantum of leave in any of the Acts, which can be accumulated except in the case of termination of services (for any reason) of the workers.
Some of the labor laws that deal with earned or privilege leave are as follows:
1. The Factories Act, 1948 stipulates that a worker who has worked for at least 240 days in a calendar year becomes eligible for earned leave, which can be enjoyed in the subsequent year. In the case of an adult, he/she becomes eligible for a day leave for every 20 days worked in the previous year. In the case of a child (i.e., a person who has not completed his/her fifteenth year of age), they become entitled to one day of leave for every 15 days worked during the previous year. These earned leaves can be carried forward to an extent of 30 days in the case of adults and not more than 40 days in the case of children.
2. The Mines Act, 1952 provides that every person employed in a mine who has completed a calendar year's service shall be allowed leave with wages during the subsequent calendar year. In the case of a person employed below ground, leave is calculated at the rate of one day for every 15 days of work performed by him/her. In other cases, leave is calculated at the rate of one day for every 20 days of work performed by him/her.
3. Section 26 of the Bidi and Cigar Workers (Conditions of Employment) Act, 1966 mentions that an adult worker becomes entitled to annual leave for one day for every 20 days of work performed by him/her during the previous calendar year. Adult workers can carry forward these leaves to the extent of 30 days. In the case of a young person, he/she becomes entitled to annual leave with wages for one day for every 15 days of work performed by him/her during the previous calendar year, and the same can be carried forward to an extent of 40 days.
4. As per the Sales Promotion Employees (Conditions of Service) Act, 1976, employees become eligible for leave with full wages for not less than one month for every 11 months spent on duty. These earned leaves can be encashed on voluntary relinquishment or termination other than by way of punishment.
5. The Plantation Labour Act, 1951 provides that an adult worker is entitled to one day of paid leave for every 20 days of work, and a child or adolescent worker is entitled to one day of paid leave for every 15 days worked. These leaves can be carried forward to an extent of 30 days.
A common provision in all the above Acts is that when a worker is discharged or dismissed from service, quits his employment, is superannuated, or dies while in service during the course of the calendar year, he or his heir or nominee, as the case may be, shall be entitled to wages in lieu of the quantum of leave to which he was entitled immediately before his discharge, dismissal, quitting of employment, superannuation, or death.
I would like to be enlightened if any member contributes on the aspect of quantum and encashment of leave under any other labor legislations.
Regards,
BS Kalsi
From India, Mumbai
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Some of the labor laws that deal with earned or privilege leave are as follows:
1. The Factories Act, 1948 stipulates that a worker who has worked for at least 240 days in a calendar year becomes eligible for earned leave, which can be enjoyed in the subsequent year. In the case of an adult, he/she becomes eligible for a day leave for every 20 days worked in the previous year. In the case of a child (i.e., a person who has not completed his/her fifteenth year of age), they become entitled to one day of leave for every 15 days worked during the previous year. These earned leaves can be carried forward to an extent of 30 days in the case of adults and not more than 40 days in the case of children.
2. The Mines Act, 1952 provides that every person employed in a mine who has completed a calendar year's service shall be allowed leave with wages during the subsequent calendar year. In the case of a person employed below ground, leave is calculated at the rate of one day for every 15 days of work performed by him/her. In other cases, leave is calculated at the rate of one day for every 20 days of work performed by him/her.
3. Section 26 of the Bidi and Cigar Workers (Conditions of Employment) Act, 1966 mentions that an adult worker becomes entitled to annual leave for one day for every 20 days of work performed by him/her during the previous calendar year. Adult workers can carry forward these leaves to the extent of 30 days. In the case of a young person, he/she becomes entitled to annual leave with wages for one day for every 15 days of work performed by him/her during the previous calendar year, and the same can be carried forward to an extent of 40 days.
4. As per the Sales Promotion Employees (Conditions of Service) Act, 1976, employees become eligible for leave with full wages for not less than one month for every 11 months spent on duty. These earned leaves can be encashed on voluntary relinquishment or termination other than by way of punishment.
5. The Plantation Labour Act, 1951 provides that an adult worker is entitled to one day of paid leave for every 20 days of work, and a child or adolescent worker is entitled to one day of paid leave for every 15 days worked. These leaves can be carried forward to an extent of 30 days.
A common provision in all the above Acts is that when a worker is discharged or dismissed from service, quits his employment, is superannuated, or dies while in service during the course of the calendar year, he or his heir or nominee, as the case may be, shall be entitled to wages in lieu of the quantum of leave to which he was entitled immediately before his discharge, dismissal, quitting of employment, superannuation, or death.
I would like to be enlightened if any member contributes on the aspect of quantum and encashment of leave under any other labor legislations.
Regards,
BS Kalsi
From India, Mumbai
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