Hi all,
Please help me. I am working in a service industry under the S&E Act. According to the S&E Act, if an employee completes one year of service, they are eligible for 12 days of earned leave (EL).
I have prepared a settlement where an employee joined on 1/5/04 and resigned on 30/06/05. I have provided EL encashment for 2004 - 8 days and 2005 - 6 days, totaling 14 days.
I would like to know if this is correct or incorrect. Please guide me as I need your urgent help.
Kanaka
From India, Madras
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12Please help me. I am working in a service industry under the S&E Act. According to the S&E Act, if an employee completes one year of service, they are eligible for 12 days of earned leave (EL).
I have prepared a settlement where an employee joined on 1/5/04 and resigned on 30/06/05. I have provided EL encashment for 2004 - 8 days and 2005 - 6 days, totaling 14 days.
I would like to know if this is correct or incorrect. Please guide me as I need your urgent help.
Kanaka
From India, Madras
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According to S&E act, he is entitle for 15 EL per year, that comes down to 1.25 per month. So, in your case person is eligible for 17.5 EL in total. Regards, Gunjan
From India, New Delhi
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From India, New Delhi
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As per the law, an employee is eligible for 21 leaves in a year. In my organization, we do not segregate leaves as PL/SL/others. If an employee completes 1 year in the organization, he/she is eligible for 21 leaves.
While computing F & F, you can calculate the leaves on a month-to-month basis (in case eligibility is 12 days for a year), then in your case, since he has completed 14 months, he would be eligible for 14 days. However, encashment of leave balance is only on basic. Ideally, his paid leaves would be 4.2 (30%).
We have been following this in our F & F process.
Santosh
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While computing F & F, you can calculate the leaves on a month-to-month basis (in case eligibility is 12 days for a year), then in your case, since he has completed 14 months, he would be eligible for 14 days. However, encashment of leave balance is only on basic. Ideally, his paid leaves would be 4.2 (30%).
We have been following this in our F & F process.
Santosh
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Hi,
The provision under section 79 of the Factories Act is as follows:
79. Annual leave with wages
(1) Every worker who has worked for a period of 240 days or more in a factory during a calendar year shall be allowed, during the subsequent calendar year, leave with wages for a number of days calculated at the rate of:
i. if an adult, one day for every twenty days of work performed by him during the previous calendar year;
ii. if a child, one day for every fifteen days of work performed by him during the previous calendar year.
Explanation 1: For the purposes of this sub-section:
a. any days of lay-off; by agreement or contract or as permissible under the standing orders;
b. in the case of a female worker, maternity leave for any number of days not exceeding twelve weeks; and
c. the leave earned in the year prior to that in which the leave is enjoyed; shall be deemed to be days on which the worker has worked in a factory for the purpose of computation of the period of 240 days or more, but he shall not earn leave for these days.
Explanation 2: The leave admissible under this sub-section shall be exclusive of all holidays whether occurring during or at either end of the period of leave.
(2) A worker whose service commences otherwise than on the first day of January shall be entitled to leave with wages at the rate laid in clause (i) or, as the case may be, clause (ii) of sub-section (1) if he has worked for two-thirds of the total number of days in the remainder of the calendar year.
(3) If a worker is discharged or dismissed from service or quits his employment or 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 the discharge, dismissal, quitting of employment, superannuating, or death calculated at the rates specified in sub-section (1), even if he had not worked for the entire period specified in sub-section (1) or sub-section (2) making him eligible to avail of such leave, and such payment shall be made:
i. where the worker is discharged or dismissed or quits employment, before the expiry of the second working day from the date of such discharge, dismissal, or quitting;
ii. where the worker is superannuated or dies while in service, before the expiry of two months from the date of such superannuation or death.
(4) In calculating leave under this section, a fraction of leave of half a day or more shall be treated as one full day's leave, and a fraction of less than a half a day shall be omitted.
(5) If a worker does not, in any one calendar year, take the whole of the leave allowed to him under sub-section (1) or sub-section (2), as the case may be, any leave not taken by him shall be added to the leave to be allowed to him in the succeeding calendar year:
Provided that the total number of days of leave that may be carried forward to a succeeding year shall not exceed thirty in the case of an adult or forty in the case of a child:
Provided further that a worker, who has applied for leave with wages but has not been given such leave in accordance with any scheme laid down in subsections (8) and (9) or in contravention of sub-section (10) shall be entitled to carry forward the leave refused without any limit.
(6) A worker may at any time apply in writing to the manager of a factory not less than fifteen days before the date on which he wishes his leave to begin, to take all the leave or any portion thereof allowable to him during the calendar year:
Provided that the application shall be made not less than thirty days before the date on which the worker wishes his leave to begin if he is employed in a public utility service as defined in clause (n) of section 2 of the Industrial Disputes Act, 1947 (XIV of 1947):
Provided further that the number of times in which leave may be taken during any year shall not exceed three.
(7) If a worker wants to avail himself of the leave with wages due to him to cover a period of illness, he shall be granted such leave even if the application for leave is not made within the time specified in sub-section (6); and in such a case, wages as admissible under section 81 shall be paid not later than fifteen days, or in the case of a public utility service not later than thirty days from the date of the application for leave.
(8) For the purpose of ensuring the continuity of work, the occupier or manager of the factory, in agreement with the Works Committee of the factory constituted under section 3 of the Industrial Disputes Act, 1947 (XIV of 1947), or a similar Committee under any other Act or if there is no such Works Committee or a similar Committee in the factory, in agreement with the representatives of the workers therein chosen in the prescribed manner, may lodge with the Chief Inspector a scheme in writing whereby the grant of the leave allowable under this section may be regulated.
(9) A scheme lodged under sub-section (8) shall be displayed at some conspicuous and convenient places in the factory and shall be in force for a period of twelve months from the date on which it comes into force, and may thereafter be renewed with or without modification for a further period of twelve months at a time, by the manager in agreement with the Works Committee or a similar Committee, or as the case may be, in agreement with the representatives of the workers as specified in sub-section (8), and a notice of renewal shall be sent to the Chief Inspector before it is renewed.
(10) An application for leave which does not contravene the provisions of sub-section (6) shall not be refused unless refusal is in accordance with the scheme for the time being in operation under subsections (8) and (9).
(11) If the employment of a worker who is entitled to leave under sub-section (1) or sub-section (2), as the case may be, is terminated by the occupier before he has taken the entire leave to which he is entitled, or if having applied for and not been granted such leave, the worker quits his employment before he has taken the leave, the occupier of the factory shall pay him the amount payable under section 80 in respect of the leave not taken, and such payment shall be made where the employment of the worker is terminated by the occupier before the expiry of the second working day after such termination, and where a worker who quits his employment on or before the next payday.
(12) The unavailed leave of a worker shall not be taken into consideration in computing the period of any notice required to be given before discharge or dismissal.
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The provision under section 79 of the Factories Act is as follows:
79. Annual leave with wages
(1) Every worker who has worked for a period of 240 days or more in a factory during a calendar year shall be allowed, during the subsequent calendar year, leave with wages for a number of days calculated at the rate of:
i. if an adult, one day for every twenty days of work performed by him during the previous calendar year;
ii. if a child, one day for every fifteen days of work performed by him during the previous calendar year.
Explanation 1: For the purposes of this sub-section:
a. any days of lay-off; by agreement or contract or as permissible under the standing orders;
b. in the case of a female worker, maternity leave for any number of days not exceeding twelve weeks; and
c. the leave earned in the year prior to that in which the leave is enjoyed; shall be deemed to be days on which the worker has worked in a factory for the purpose of computation of the period of 240 days or more, but he shall not earn leave for these days.
Explanation 2: The leave admissible under this sub-section shall be exclusive of all holidays whether occurring during or at either end of the period of leave.
(2) A worker whose service commences otherwise than on the first day of January shall be entitled to leave with wages at the rate laid in clause (i) or, as the case may be, clause (ii) of sub-section (1) if he has worked for two-thirds of the total number of days in the remainder of the calendar year.
(3) If a worker is discharged or dismissed from service or quits his employment or 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 the discharge, dismissal, quitting of employment, superannuating, or death calculated at the rates specified in sub-section (1), even if he had not worked for the entire period specified in sub-section (1) or sub-section (2) making him eligible to avail of such leave, and such payment shall be made:
i. where the worker is discharged or dismissed or quits employment, before the expiry of the second working day from the date of such discharge, dismissal, or quitting;
ii. where the worker is superannuated or dies while in service, before the expiry of two months from the date of such superannuation or death.
(4) In calculating leave under this section, a fraction of leave of half a day or more shall be treated as one full day's leave, and a fraction of less than a half a day shall be omitted.
(5) If a worker does not, in any one calendar year, take the whole of the leave allowed to him under sub-section (1) or sub-section (2), as the case may be, any leave not taken by him shall be added to the leave to be allowed to him in the succeeding calendar year:
Provided that the total number of days of leave that may be carried forward to a succeeding year shall not exceed thirty in the case of an adult or forty in the case of a child:
Provided further that a worker, who has applied for leave with wages but has not been given such leave in accordance with any scheme laid down in subsections (8) and (9) or in contravention of sub-section (10) shall be entitled to carry forward the leave refused without any limit.
(6) A worker may at any time apply in writing to the manager of a factory not less than fifteen days before the date on which he wishes his leave to begin, to take all the leave or any portion thereof allowable to him during the calendar year:
Provided that the application shall be made not less than thirty days before the date on which the worker wishes his leave to begin if he is employed in a public utility service as defined in clause (n) of section 2 of the Industrial Disputes Act, 1947 (XIV of 1947):
Provided further that the number of times in which leave may be taken during any year shall not exceed three.
(7) If a worker wants to avail himself of the leave with wages due to him to cover a period of illness, he shall be granted such leave even if the application for leave is not made within the time specified in sub-section (6); and in such a case, wages as admissible under section 81 shall be paid not later than fifteen days, or in the case of a public utility service not later than thirty days from the date of the application for leave.
(8) For the purpose of ensuring the continuity of work, the occupier or manager of the factory, in agreement with the Works Committee of the factory constituted under section 3 of the Industrial Disputes Act, 1947 (XIV of 1947), or a similar Committee under any other Act or if there is no such Works Committee or a similar Committee in the factory, in agreement with the representatives of the workers therein chosen in the prescribed manner, may lodge with the Chief Inspector a scheme in writing whereby the grant of the leave allowable under this section may be regulated.
(9) A scheme lodged under sub-section (8) shall be displayed at some conspicuous and convenient places in the factory and shall be in force for a period of twelve months from the date on which it comes into force, and may thereafter be renewed with or without modification for a further period of twelve months at a time, by the manager in agreement with the Works Committee or a similar Committee, or as the case may be, in agreement with the representatives of the workers as specified in sub-section (8), and a notice of renewal shall be sent to the Chief Inspector before it is renewed.
(10) An application for leave which does not contravene the provisions of sub-section (6) shall not be refused unless refusal is in accordance with the scheme for the time being in operation under subsections (8) and (9).
(11) If the employment of a worker who is entitled to leave under sub-section (1) or sub-section (2), as the case may be, is terminated by the occupier before he has taken the entire leave to which he is entitled, or if having applied for and not been granted such leave, the worker quits his employment before he has taken the leave, the occupier of the factory shall pay him the amount payable under section 80 in respect of the leave not taken, and such payment shall be made where the employment of the worker is terminated by the occupier before the expiry of the second working day after such termination, and where a worker who quits his employment on or before the next payday.
(12) The unavailed leave of a worker shall not be taken into consideration in computing the period of any notice required to be given before discharge or dismissal.
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You are talking about S&E i.e. Shops & Establishment Act in which EL is earned every 20 worked days. On average, a person works for 302 days, and if divided by 20, it equals 15 if we work on Saturdays as well.
In the case of the Sale Promotion Act for sales staff, it needs to be divided by 11. Therefore, Kanika, if I am spelling your name correctly, please be satisfied with this answer and feel free to ask any questions at
.
Colig Penwey
HR
From India, Delhi
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In the case of the Sale Promotion Act for sales staff, it needs to be divided by 11. Therefore, Kanika, if I am spelling your name correctly, please be satisfied with this answer and feel free to ask any questions at
Colig Penwey
HR
From India, Delhi
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Types of Leave Procedures
Actually, companies follow two types of leave procedures. If leaves are calculated on a calendar year basis:
1. For every employee who has completed 1 year of service and has worked 240 days, including holidays and weekly offs, the company will provide 15 Earned Leaves (ELs) directly.
Example: In your case, as he has completed one year of service, he is eligible for 15 ELs encashment.
2. In the second case, the company will give leave on a prorate basis for the first year (i.e., May to December) and for the second year (January to December). The employee will receive 15 days of ELs in January 2006. Therefore, in your case, he will be eligible to encash only 8 days.
Regards,
Prasad
From India, Hyderabad
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Actually, companies follow two types of leave procedures. If leaves are calculated on a calendar year basis:
1. For every employee who has completed 1 year of service and has worked 240 days, including holidays and weekly offs, the company will provide 15 Earned Leaves (ELs) directly.
Example: In your case, as he has completed one year of service, he is eligible for 15 ELs encashment.
2. In the second case, the company will give leave on a prorate basis for the first year (i.e., May to December) and for the second year (January to December). The employee will receive 15 days of ELs in January 2006. Therefore, in your case, he will be eligible to encash only 8 days.
Regards,
Prasad
From India, Hyderabad
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Leave Procedures and Eligibility
Actually, companies follow two types of leave procedures. If leaves are calculated on a calendar year basis:
1. For every employee who has completed 1 year of service and has 240 working days, including holidays and weekly offs, the company will provide 15 earned leaves (ELs) directly. For example, in your case, as he has completed one year of service, he is eligible for 15 ELs encashment.
2. In the second case, the company will give leave on a prorated basis for the first year (i.e., May to Dec) and for the second year (Jan to Dec), the employee will receive 15 days of ELs in January 2006. Therefore, in your case, he will be eligible to encash only 8 days.
Regards,
Prasad
From India, Hyderabad
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Actually, companies follow two types of leave procedures. If leaves are calculated on a calendar year basis:
1. For every employee who has completed 1 year of service and has 240 working days, including holidays and weekly offs, the company will provide 15 earned leaves (ELs) directly. For example, in your case, as he has completed one year of service, he is eligible for 15 ELs encashment.
2. In the second case, the company will give leave on a prorated basis for the first year (i.e., May to Dec) and for the second year (Jan to Dec), the employee will receive 15 days of ELs in January 2006. Therefore, in your case, he will be eligible to encash only 8 days.
Regards,
Prasad
From India, Hyderabad
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