Dear All,
I wanted help from seniors again.
Can there be leave encashment from an employee?
Case: In my organization, which is a startup, we have allotted leave on a prorata basis (24 = 14 PL + 10 CL for the year) at the start of the year itself. The question is, if an employee leaves the organization in the month of April - June and has consumed all their leaves in these entire 6 months of their service, can we deduct their leave (PL) already consumed for another 6 months in Full & Final Settlement?
Anyways, he/she has worked for 6 months and consumed over 24 leaves in full and is now leaving the organization. Can the loss to the organization be seen as we have already paid for the entire leave?
From India, Pune
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I wanted help from seniors again.
Can there be leave encashment from an employee?
Case: In my organization, which is a startup, we have allotted leave on a prorata basis (24 = 14 PL + 10 CL for the year) at the start of the year itself. The question is, if an employee leaves the organization in the month of April - June and has consumed all their leaves in these entire 6 months of their service, can we deduct their leave (PL) already consumed for another 6 months in Full & Final Settlement?
Anyways, he/she has worked for 6 months and consumed over 24 leaves in full and is now leaving the organization. Can the loss to the organization be seen as we have already paid for the entire leave?
From India, Pune
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Let me put it in another way.
Leave encashment from an employee means the deduction of leave granted to an employee if he leaves, right?
A leave once granted is granted, and you cannot take it out saying that you are leaving the establishment and whatever was granted to you by me should be given back.
Now, the question the employee may ask you if you deduct the leaves already given to him as paid is, "if I were not entitled to the leaves, why was I given it?"
Now coming to the HR side, I would say that leaves are regulated partially by the law in force and partially by the policies of the establishment. If your establishment is covered by the Shops and Commercial Establishments Act, the provisions regarding leaves as given in the said Act will specify how many leaves an employee should get every year and under what conditions the employee will get them. This Act is a state Act, and hence the provisions may vary from state to state. Without knowing in which state your establishment is, we cannot guide you properly. However, most states have earned leaves, sick leaves, and casual leaves as leaves admissible. The number of days of eligibility may vary. Earned leave is given to an employee who has worked for 12 months, but sick leaves and casual leaves are granted during the first year of service as well.
Earned leave credited is the leave earned by an employee for the service he has rendered in the preceding year. He can take it or keep it to be carried forward to the next year. If he leaves, he can encash it. Therefore, by deducting the leaves when he leaves the company, you will be taking away one of his legal rights.
In the case of sick leaves and casual leaves, you are expected to grant them proportionally to the months worked. However, if you have already granted them, you should not take them back.
From India, Kannur
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4490Leave encashment from an employee means the deduction of leave granted to an employee if he leaves, right?
A leave once granted is granted, and you cannot take it out saying that you are leaving the establishment and whatever was granted to you by me should be given back.
Now, the question the employee may ask you if you deduct the leaves already given to him as paid is, "if I were not entitled to the leaves, why was I given it?"
Now coming to the HR side, I would say that leaves are regulated partially by the law in force and partially by the policies of the establishment. If your establishment is covered by the Shops and Commercial Establishments Act, the provisions regarding leaves as given in the said Act will specify how many leaves an employee should get every year and under what conditions the employee will get them. This Act is a state Act, and hence the provisions may vary from state to state. Without knowing in which state your establishment is, we cannot guide you properly. However, most states have earned leaves, sick leaves, and casual leaves as leaves admissible. The number of days of eligibility may vary. Earned leave is given to an employee who has worked for 12 months, but sick leaves and casual leaves are granted during the first year of service as well.
Earned leave credited is the leave earned by an employee for the service he has rendered in the preceding year. He can take it or keep it to be carried forward to the next year. If he leaves, he can encash it. Therefore, by deducting the leaves when he leaves the company, you will be taking away one of his legal rights.
In the case of sick leaves and casual leaves, you are expected to grant them proportionally to the months worked. However, if you have already granted them, you should not take them back.
From India, Kannur
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FW Full and final settlement of all my dues including salary leave encashment Gratuity PF .zip
Full n final settlement.doc